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

<a href="https://www.smartkarma.com/entities/pinduoduo-inc" target="_blank" data-smartkarma-citation="entities:27250:1" rel="noopener">Pinduoduo (PDD US)</a> plans to raise around US$5bn via a mix of issuing shares and convertible bonds.The stock has been a one-way street since listing and has risen by 27% since it announced its 3Q20 results on 12th Nov 2020. In this insight, we will run the deal through our ECM framework and talk about valuations.

Pinduoduo (PDD US) plans to raise around US$5bn via a mix of issuing shares and convertible bonds.The stock has been a one-way street since listing and has risen by 27% since it announced its 3Q20 results on 12th Nov 2020. In this insight, we will run the deal through our ECM framework and talk about valuations. 

Pinduoduo Placement - Should Do Well If, It Corrects Beforehand

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

JD Health International  / Equity Capital Markets

This Insight discusses the assumptions required to justify JD Health's reportedly target valuation of US$20 billion. Our analysis indicates that the online pharmacy business could be worth US$10 billion assuming some degree of margin improvement. Further, the online healthcare services business will have to penetrate roughly 2% of healthcare services spending to justify the balance (US$10 billion) valuation, which we think is achievable.

This Insight discusses the assumptions required to justify JD Health's reportedly target valuation of US$20 billion. Our analysis indicates that the online pharmacy business could be worth US$10 billion assuming some degree of margin improvement. Further, the online healthcare services business will have to penetrate roughly 2% of healthcare services spending to justify the balance (US$10 billion) valuation, which we think is achievable.  

JD Health: Framing the Valuation Discussion

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Event-Driven

<a href="https://www.smartkarma.com/entities/best-inc" target="_blank" data-smartkarma-citation="entities:25494:1" rel="noopener">BEST Inc (BEST US)</a> announced it will wind down its money-losing Store+ business line. The company had been considering strategic alternatives for Store+ for several quarters. In the US session on Monday, shares traded as high as US$3.65 before falling to US$3.18 at the close. The decision to close Store+ is positive at the margin, in our view. The unit was responsible for outsized adjusted EBITDA losses and added little to growth. The change should free up some working capital and allow management to focus on the Chinese express and freight segments. More importantly, eliminating Store+ (and its losses) makes Best more attractive to potential suitors. Best is likely to disclose operating losses when it reports Q3 results on November 19th. We believe any near-term weakness in the share price could provide an opportunity to add to positions on the expectation of M&amp;A activity in the next 12-18 months. Retain BUY

BEST Inc (BEST US) announced it will wind down its money-losing Store+ business line. The company had been considering strategic alternatives for Store+ for several quarters. In the US session on Monday, shares traded as high as US$3.65 before falling to US$3.18 at the close. The decision to close Store+ is positive at the margin, in our view. The unit was responsible for outsized adjusted EBITDA losses and added little to growth. The change should free up some working capital and allow management to focus on the Chinese express and freight segments. More importantly, eliminating Store+ (and its losses) makes Best more attractive to potential suitors. Best is likely to disclose operating losses when it reports Q3 results on November 19th. We believe any near-term weakness in the share price could provide an opportunity to add to positions on the expectation of M&amp;A activity in the next 12-18 months. Retain BUY

Best Inc. Is Closing Its Money-Losing 'Store+' Business, a Small but Positive Step Forward

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Thematic (Sector/Industry)

<ul>
<li>The effect of the COVID pandemic saw an unprecedented level of sector rotation among EM active portfolios in 2020.</li>
<li>Banking stocks were hit the hardest, with Semiconductor, Internet Retail and Interactive Media industry groups the beneficiaries.</li>
<li>Banking exposure is at its lowest levels in over a decade, EM active investors at highest ever weights in Tech related Consumer Discretionary and Communication Services stocks.</li>
<li>Improving outlook for banking stocks, vaccine hopes, plus potential regulation in the Tech sector point to a potential unwind.  </li>
<li>'Beaten Up' banking stocks include <a href="https://www.smartkarma.com/entities/itau-unibanco-holding-sa-9d47d196-e503-471b-a84e-ca4401033062" target="_blank" data-smartkarma-citation="entities:24550:1" rel="noopener">Itau Unibanco Holding Sa (ITUB4 BZ)</a> , <a href="https://www.smartkarma.com/entities/kasikornbank-pcl" target="_blank" data-smartkarma-citation="entities:293:1" rel="noopener">Kasikornbank PCL (KBANK TB)</a> and <a href="https://www.smartkarma.com/entities/standard-bank-group-ltd" target="_blank" data-smartkarma-citation="entities:24988:1" rel="noopener">Standard Bank (SBK SJ)</a> </li>
<li>Fully owned Tech related stocks include <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> , <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a> and <a href="https://www.smartkarma.com/entities/mercadolibre-inc" target="_blank" data-smartkarma-citation="entities:27954:1" rel="noopener">MercadoLibre Inc (MELI US)</a> </li>
</ul>


The effect of the COVID pandemic saw an unprecedented level of sector rotation among EM active portfolios in 2020.
Banking stocks were hit the hardest, with Semiconductor, Internet Retail and Interactive Media industry groups the beneficiaries.
Banking exposure is at its lowest levels in over a decade, EM active investors at highest ever weights in Tech related Consumer Discretionary and Communication Services stocks.
Improving outlook for banking stocks, vaccine hopes, plus potential regulation in the Tech sector point to a potential unwind.  
'Beaten Up' banking stocks include Itau Unibanco Holding Sa (ITUB4 BZ) , Kasikornbank PCL (KBANK TB) and Standard Bank (SBK SJ) 
Fully owned Tech related stocks include Meituan (3690 HK) , JD.com Inc (ADR) (JD US) and MercadoLibre Inc (MELI US) 


GEM Fund Positioning Update:  The COVID Unwind.

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

Equity Bottom-Up

<ul>
<li>This is the first time we conclude a downside for the stock price.</li>
<li>JD’s stock price has risen by 161% year to date, while the NASDAQ Composite Index has increased by only 32% in the same period.</li>
<li>Our pro forma P/S band suggests a downside of 8%.</li>
<li>Revenue grew strongly in 3Q20.</li>
<li>The gross margin of direct sales continued to decline, but operating expenses were controlled well.</li>
</ul>


This is the first time we conclude a downside for the stock price.
JD’s stock price has risen by 161% year to date, while the NASDAQ Composite Index has increased by only 32% in the same period.
Our pro forma P/S band suggests a downside of 8%.
Revenue grew strongly in 3Q20.
The gross margin of direct sales continued to decline, but operating expenses were controlled well.


JD.com (JD): Stock Price Concern for First Time After Excellent 3Q20 Result

China

JD.com Inc is an online direct sales company in China.  The Company offers a wide selection of products through its website and mobile applications.  JD.com sells appliances, computers, digital products, communication products, garments, books, and household items to consumers and vendors.

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JD.com Inc (ADR) (JD US)

Pinduoduo Placement - Should Do Well If, It Corrects Beforehand

Pinduoduo (PDD US) plans to raise around US$5bn via a mix of issuing shares and convertible bonds. The stock has been a one-way street since listing.

Sumeet Singh

JD Health: Framing the Valuation Discussion

This Insight discusses the assumptions required to justify JD Health's reportedly target valuation of US$20 billion with a buildup by each business...

Kemp Dolliver, CFA

Best Inc. Is Closing Its Money-Losing 'Store+' Business, a Small but Positive Step Forward

By closing its money-losing Store+ business, Best makes itself more attractive to a potential acquirer. Any weakness around its release of Q3...

Tracking Traffic

GEM Fund Positioning Update: The COVID Unwind.

How did Emerging Market managers react to the COVID-19 pandemic? Unprecedented rotation out of Bank stocks and in to Tech. How are managers now...

Steven Holden

JD.com (JD): Stock Price Concern for First Time After Excellent 3Q20 Result

This is the first time we conclude a downside for the stock price. JD’s stock price has risen by 161% year to date, while the NASDAQ Composite...

Ming Lu

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