Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<ul>
<li>Both Alibaba (-6%) and Didi (-12% pre-market) are down on regulatory pressure </li>
<li>Vision Fund valuation losses are approaching $20bn for Q4 and the current (unrealized) portfolio has turned negative</li>
<li>NAV/Share and the share price are at two-year lows and gains from the post-Covid tech run are largely gone</li>
</ul>


Both Alibaba (-6%) and Didi (-12% pre-market) are down on regulatory pressure 
Vision Fund valuation losses are approaching $20bn for Q4 and the current (unrealized) portfolio has turned negative
NAV/Share and the share price are at two-year lows and gains from the post-Covid tech run are largely gone


Softbank Group - China Worries Re-Surface as Alibaba, Didi Under Pressure

<ul>
<li>Valuation losses in the public portfolio have increased by $6bn over two days on weakness at Coupang, Grab, DoorDash and WeWork.  Total losses for the quarter stand at $17bn.</li>
<li>With Alibaba shares still weak, NAV/share has moved decisively below ¥10,000/share and is back to where it in May/June 2020 when tech was first rebounding from the Covid shock.</li>
<li>The discount to NAV stands at 49% but is likely to expand when markets in Japan have a chance to respond to how stocks traded in the US on Friday.</li>
</ul>


Valuation losses in the public portfolio have increased by $6bn over two days on weakness at Coupang, Grab, DoorDash and WeWork.  Total losses for the quarter stand at $17bn.
With Alibaba shares still weak, NAV/share has moved decisively below ¥10,000/share and is back to where it in May/June 2020 when tech was first rebounding from the Covid shock.
The discount to NAV stands at 49% but is likely to expand when markets in Japan have a chance to respond to how stocks traded in the US on Friday.


Softbank Group - Tough Week for VF as Public Portfolio Falls $6bn over Two Days

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

<ul>
<li>On 25 February, E Mart Inc (139480 KS) announced that it will buy back 1 million shares, representing 3.6% of its outstanding shares. Currently, Emart has 87,464 treasury shares.</li>
<li>We believe Emart's share price is well positioned to continue to outperform the market in the next several months, driven by the large buyback program. </li>
<li>Emart is currently trading at 0.4x P/B (38% lower than the historical valuation multiples). One could argue that Emart is valued at an excessive discount to the historical valuations.</li>
</ul>


On 25 February, E Mart Inc (139480 KS) announced that it will buy back 1 million shares, representing 3.6% of its outstanding shares. Currently, Emart has 87,464 treasury shares.
We believe Emart's share price is well positioned to continue to outperform the market in the next several months, driven by the large buyback program. 
Emart is currently trading at 0.4x P/B (38% lower than the historical valuation multiples). One could argue that Emart is valued at an excessive discount to the historical valuations.


Emart Announces A Major Share Buyback Program

<ul>
<li>
<a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> shares have fallen 46% since 31 March v a 52% decline for <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> with little daylight between the two since August</li>
<li>That reflects fading influence from Vision Fund which is shed $12bn in value Q4 to date and c. $30bn this fiscal year.</li>
<li>The discount remains in the 50% range as tailwinds from the share buyback depend on a successful IPO of ARM, where the magnitude and timing remain uncertain</li>
</ul>



Softbank Group (9984 JP) shares have fallen 46% since 31 March v a 52% decline for Alibaba Group (9988 HK) with little daylight between the two since August
That reflects fading influence from Vision Fund which is shed $12bn in value Q4 to date and c. $30bn this fiscal year.
The discount remains in the 50% range as tailwinds from the share buyback depend on a successful IPO of ARM, where the magnitude and timing remain uncertain


Softbank Group - Alibaba Remains the Key Share Price Driver as VF Diversification Stalls

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

<ul>
<li>With churn rates as high as 50% and wholesale customers declining by 27.7% in 9M21, we are not particularly interested in <a href="https://www.smartkarma.com/entities/huitongda" target="_blank" data-smartkarma-citation="entities:33789:1" rel="noopener">Huitongda (9878 HK)</a> over long term.</li>
<li>The valuation looks cheap compared to peers on the surface, but when compared after considering Huitongda’s 1P exposure its at a significant premium to peers.</li>
<li>Given that the market takes time to pick up similar mispricing situations, we think its advisable to wait and see where Huitongda opens, before arranging a short position.</li>
</ul>


With churn rates as high as 50% and wholesale customers declining by 27.7% in 9M21, we are not particularly interested in Huitongda (9878 HK) over long term.
The valuation looks cheap compared to peers on the surface, but when compared after considering Huitongda’s 1P exposure its at a significant premium to peers.
Given that the market takes time to pick up similar mispricing situations, we think its advisable to wait and see where Huitongda opens, before arranging a short position.


South Korea

Coupang, Inc. operates as an e-commerce company. The Company offers dynamic end-to-end e-commerce and logistic solutions. Coupang serves customers worldwide.

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Coupang (CPNG US)

Softbank Group - China Worries Re-Surface as Alibaba, Didi Under Pressure

Softbank shares have given up all the post-Covid gains, pressured most recently by further regulatory weakness at Alibaba and Didi. The latter is...

Kirk Boodry

Softbank Group - Tough Week for VF as Public Portfolio Falls $6bn over Two Days

Vision Fund's public portfolio has been hammered on weakness at Grab, Coupang and WeWork and QTD losses are approaching the record level from Q2...

Kirk Boodry

Huitongda IPO - Valuation

The valuation looks cheap compared to peers on the surface, but when compared after considering Huitongda’s 1P exposure its at a significant...

Oshadhi Kumarasiri

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Softbank Group - China Worries Re-Surface as Alibaba, Didi Under Pressure

Softbank shares have given up all the post-Covid gains, pressured most recently by further regulatory weakness at Alibaba and Didi. The latter is...

Kirk Boodry

Softbank Group - Tough Week for VF as Public Portfolio Falls $6bn over Two Days

Vision Fund's public portfolio has been hammered on weakness at Grab, Coupang and WeWork and QTD losses are approaching the record level from Q2...

Kirk Boodry

Emart Announces A Major Share Buyback Program

E Mart Inc announced that it will buy back 1 million shares, representing 3.6% of its outstanding shares. We believe Emart is well positioned to...

Douglas Kim

Softbank Group - Alibaba Remains the Key Share Price Driver as VF Diversification Stalls

Vision Fund, ARM and buybacks have grabbed headlines but Alibaba's share price has been the best predictor for Softbank's value, particularly over...

Kirk Boodry

Huitongda IPO - Valuation

The valuation looks cheap compared to peers on the surface, but when compared after considering Huitongda’s 1P exposure its at a significant...

Oshadhi Kumarasiri