Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

*No Substance: HDFC Bank (HDFCB.IN) [HDFCB] provided an investor update for FY 1Q22 ahead of its official scheduled July 17, 2021 earnings release. Many of the highlights related to growth of lending and deposits; and*Where Have All The Flowers Gone: Nothing was discussed regarding HDFCB’s abysmal credit quality nor its quite suspect insider transaction with HDFC ERGO General Insurance (ERGO). For FY 4Q21, net new NPLs actually increased INR 49.2 bn or 130.4% on an annualized basis which is quite worrisome.  We would also be more comfortable if HDFCB was a bit more aggressive with its provisions. By our calculation, reserves are currently short by nearly INR 242 bn or nearly a half year of core operating results.

*No Substance: HDFC Bank (HDFCB.IN) [HDFCB] provided an investor update for FY 1Q22 ahead of its official scheduled July 17, 2021 earnings release. Many of the highlights related to growth of lending and deposits; and*Where Have All The Flowers Gone: Nothing was discussed regarding HDFCB’s abysmal credit quality nor its quite suspect insider transaction with HDFC ERGO General Insurance (ERGO). For FY 4Q21, net new NPLs actually increased INR 49.2 bn or 130.4% on an annualized basis which is quite worrisome.  We would also be more comfortable if HDFCB was a bit more aggressive with its provisions. By our calculation, reserves are currently short by nearly INR 242 bn or nearly a half year of core operating results. 

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

For our next Smartkarma Webinar, we are thrilled to welcome back Insight Provider <a href="https://www.smartkarma.com/profiles/kyle-rudden" target="_blank" data-smartkarma-citation="accounts:4495" rel="noopener">Kyle Rudden</a> , who will be sharing insights on the trending issue of Environmental, Social, and Governance Investing. ESG investing is widely seen as a way of investing “sustainably” where investments are made with consideration of the environment and human well-being, as well as the economy. Kyle believes global sustainability is imperative and views private-sector capital as its cornerstone. As such, he supports the various impact-oriented strategies typically associated with ESG investing. However, his views on ESG and investing lean more pragmatic than idealistic, and his research focuses on applying ESG analysis to general investing rather than to "ESG investing" per se. Kyle subscribes to the Triple Bottom Line view of sustainability, where economic and financial metrics are deemed as important as ESG factors.This webinar is organised jointly by Smartkarma and SGX.<h3>The webinar will be hosted on Wednesday, 14 July 2021, 17:00 SGT/HKT.</h3><div class="content-highlight"><h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=86937019742" target="_blank" rel="noopener">Register for the Webinar here</a></h2></div>Kyle Rudden is an ESG (Environmental, Social, Governance) analyst with an alpha-centric approach to ESG research. After all, ESG investing is, first and foremost, investing. "Alpha-centric" does not mean apathetic, however. Quite the contrary. Kyle believes global sustainability – i.e., environmental stewardship, social equality, and economic prosperity – is imperative, and private-sector capital is its cornerstone. Private-sector capital still has fiduciary responsibilities. Profitability is necessary for sustained impact. The Triple Bottom Line. People, Planet, AND Profit.

For our next Smartkarma Webinar, we are thrilled to welcome back Insight Provider Kyle Rudden , who will be sharing insights on the trending issue of Environmental, Social, and Governance Investing. ESG investing is widely seen as a way of investing “sustainably” where investments are made with consideration of the environment and human well-being, as well as the economy. Kyle believes global sustainability is imperative and views private-sector capital as its cornerstone. As such, he supports the various impact-oriented strategies typically associated with ESG investing. However, his views on ESG and investing lean more pragmatic than idealistic, and his research focuses on applying ESG analysis to general investing rather than to "ESG investing" per se. Kyle subscribes to the Triple Bottom Line view of sustainability, where economic and financial metrics are deemed as important as ESG factors.This webinar is organised jointly by Smartkarma and SGX.The webinar will be hosted on Wednesday, 14 July 2021, 17:00 SGT/HKT.Register for the Webinar hereKyle Rudden is an ESG (Environmental, Social, Governance) analyst with an alpha-centric approach to ESG research. After all, ESG investing is, first and foremost, investing. "Alpha-centric" does not mean apathetic, however. Quite the contrary. Kyle believes global sustainability – i.e., environmental stewardship, social equality, and economic prosperity – is imperative, and private-sector capital is its cornerstone. Private-sector capital still has fiduciary responsibilities. Profitability is necessary for sustained impact. The Triple Bottom Line. People, Planet, AND Profit.

Smartkarma Webinar | Foundations of Sustainable/ESG Investing and Finance

*Recovery Continues: Oversea Chinese Banking Corp. (OCBC.SP) [OCBC] attended a competitor virtual conference last week, confirming that the positive trends in from 1Q21 are set to continue; and*Credit Improvement Re-Affirmed: We remain optimistic. According to management, credit quality trends remain quite favorable but still expects a gradual deterioration from loans under moratorium. Much of the anticipated deterioration in credit is likely to continue to come from Malaysia and Indonesia. For 1Q21, we calculated that net new NPL growth amounted to a very reasonable SGD 40 mn or 3.6% on an annualized basis for 1Q21 – which remains incredibly low.

*Recovery Continues: Oversea Chinese Banking Corp. (OCBC.SP) [OCBC] attended a competitor virtual conference last week, confirming that the positive trends in from 1Q21 are set to continue; and*Credit Improvement Re-Affirmed: We remain optimistic. According to management, credit quality trends remain quite favorable but still expects a gradual deterioration from loans under moratorium. Much of the anticipated deterioration in credit is likely to continue to come from Malaysia and Indonesia. For 1Q21, we calculated that net new NPL growth amounted to a very reasonable SGD 40 mn or 3.6% on an annualized basis for 1Q21 – which remains incredibly low.

Oversea Chinese Banking Corp. – Affirming Positive Trends

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

CTOS Digital (CTOS) aims to raise up to US$291m via its Malaysian IPO. It is majority owned by Creador, a PE firm. CTOS is an investment holding whose subsidiaries are principally involved in the business of credit reporting, digital software related services, software development, outsourcing and training services and investment holding. CTOS was the largest credit reporting agency (CRA) in Malaysia with an estimated market share in terms of revenue of 71.2% in 2020 according to the IMR Report. Its associate, Experian, was the second largest credit reporting agency (CRA) in Malaysia, with an estimated market share in terms of revenue of 17.5%.We covered most aspects of the deal in our earlier note, <a href="https://www.smartkarma.com/insights/ctos-digital-pre-ipo-credit-where-credit-s-due" target="_blank" rel="noopener">CTOS Digital Pre-IPO - Credit where credit’s due</a>.In this note, we will run the deal through our ECM framework and talk about the deal dynamics.

CTOS Digital (CTOS) aims to raise up to US$291m via its Malaysian IPO. It is majority owned by Creador, a PE firm. CTOS is an investment holding whose subsidiaries are principally involved in the business of credit reporting, digital software related services, software development, outsourcing and training services and investment holding. CTOS was the largest credit reporting agency (CRA) in Malaysia with an estimated market share in terms of revenue of 71.2% in 2020 according to the IMR Report. Its associate, Experian, was the second largest credit reporting agency (CRA) in Malaysia, with an estimated market share in terms of revenue of 17.5%.We covered most aspects of the deal in our earlier note, CTOS Digital Pre-IPO - Credit where credit’s due.In this note, we will run the deal through our ECM framework and talk about the deal dynamics.

CTOS Digital IPO - Market Leader, Strong PE Record and Cornerstone

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Cross Asset Strategy

The next 6-12 months are likely to see a rising tide of IPOs of Unicorns from South-East Asia in a race to market through a mixture of SPAC listings and straightforward IPOs.  Companies including <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a>, Traveloka, Carousell, and Tiket.com plan to list through SPACs.
Others are looking for a more traditional route, with Goto Group opting for a dual listing in Jakarta and the US but Bukalapak is likely to be the first unicorn to list in Jakarta.
The trends in the Indian ecosystem are often mirrored in South-East Asia and especially in Indonesia given similar demographics. There have also been a number of start-ups in Indonesia started by Indians taking the lead from Indian start-ups.
The online grocery market is also seeing a lot more focus, with <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a> through Lazada recently invested US$400m Vietnamese retail leader Masan Corp’s online grocery business There has also been increased activity in this space in Indonesia.
Indonesia has also seen ongoing investments from large listed local companies into the online space as they seek to increase digital exposure.
There is also an ongoing race to get exposure in digital banking with a number of smaller banks being taken over with the aim of transforming them into pure digital players. There are now a total of 15 banks that have declared their intention to become digital banks outlined within.
We also see logistics and digital travel as other areas with candidates for IPOs or SPAC listings for companies such as Traveloka and Tiket.com.

The next 6-12 months are likely to see a rising tide of IPOs of Unicorns from South-East Asia in a race to market through a mixture of SPAC listings and straightforward IPOs.  Companies including Grab, Traveloka, Carousell, and Tiket.com plan to list through SPACs.
Others are looking for a more traditional route, with Goto Group opting for a dual listing in Jakarta and the US but Bukalapak is likely to be the first unicorn to list in Jakarta.
The trends in the Indian ecosystem are often mirrored in South-East Asia and especially in Indonesia given similar demographics. There have also been a number of start-ups in Indonesia started by Indians taking the lead from Indian start-ups.
The online grocery market is also seeing a lot more focus, with Alibaba Group (BABA US) through Lazada recently invested US$400m Vietnamese retail leader Masan Corp’s online grocery business There has also been increased activity in this space in Indonesia.
Indonesia has also seen ongoing investments from large listed local companies into the online space as they seek to increase digital exposure.
There is also an ongoing race to get exposure in digital banking with a number of smaller banks being taken over with the aim of transforming them into pure digital players. There are now a total of 15 banks that have declared their intention to become digital banks outlined within.
We also see logistics and digital travel as other areas with candidates for IPOs or SPAC listings for companies such as Traveloka and Tiket.com. 

The Rising Tide of Digital IPOs and M&A in SE Asia's Digital Game of Thrones

Singapore

DBS Group Holdings Limited and its subsidiaries provide a variety of financial services.  The Company offers services including mortgage financing, lease and hire purchase financing, nominee and trustee, funds management, corporate advisory and brokerage .  DBS Group also acts as the primary dealer in Singapore government securities.

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DBS (DBS SP)

HDFC Bank – Spigots Are Now Off

HDFC BANK: HDFCB provided an investor update for FY 1Q22 ahead of its official scheduled July 17, 2021 earnings release. Highlights related to...

Thomas J. Monaco

Smartkarma Webinar | Foundations of Sustainable/ESG Investing and Finance

On 14 July, 5pm SGT, join our webinar with Kyle Rudden, who will be sharing his insights on the trending issue of ESG Investing and the Triple...

Smartkarma Research

Oversea Chinese Banking Corp. – Affirming Positive Trends

Oversea Chinese Banking Corp: OCBC confirmed that the positive trends are set to continue, and that credit quality remains favorable but with...

Thomas J. Monaco

CTOS Digital IPO - Market Leader, Strong PE Record and Cornerstone

CTOS Digital (CTOS) aims to raise up to US$291m via its Malaysian IPO. It is majority owned by Creador, a PE firm. CTOS is the largest credit...

Sumeet Singh

The Rising Tide of Digital IPOs and M&A in SE Asia's Digital Game of Thrones

We see a rising tide of new listings from the SEA Digital economy in 2H2021 and beyond, with some local listings and some taking the SPAC route.

Angus Mackintosh

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