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

<div>
<p><a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> plans to raise around US$2.2bn in a primary follow-on offering. The stock is up 4x this year and has risen 10x since its IPO in 2017. </p>
<p>We have covered the company since listing, links to our previous notes are below. In this note, I'll talk about the deal dynamics and run the deal through our ECM framework.</p>
<p>Links to our prior SEA coverage:</p>
<ul>
<li><a href="https://www.smartkarma.com/insights/sea-ltd-trade-idea-time-to-shine-market-discounting-e-commerce-to-almost-zero" target="_blank" rel="noopener">Sea Ltd Trade Idea - Time to Shine - Market Discounting E-Commerce to Almost Zero</a></li>
<li>
<a href="https://www.smartkarma.com/insights/sea-ltd-placement-capitalizing-on-momentum" target="_blank" data-smartkarma-citation="insights:28366" rel="noopener">Sea Ltd Placement - Capitalizing on Momentum</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/sea-ltd-ipo-review-e-commerce-constitutes-64-of-sotp-valuation" target="_blank" data-smartkarma-citation="insights:14375" rel="noopener">Sea Ltd IPO Review - E-Commerce Constitutes 64% of SOTP Valuation</a> </li>
<li><a href="https://www.smartkarma.com/insights/sea-ltd-ipo-review-a-pure-exposure-to-se-asia-s-e-commerce-gaming-despite-stiff-competition" target="_blank" data-smartkarma-citation="insights:13958" rel="noopener">Sea Ltd IPO Review - A Pure Exposure to SE Asia's E-Commerce &amp; Gaming Despite Stiff Competition</a></li>
</ul>
</div>


Sea Ltd (SE US) plans to raise around US$2.2bn in a primary follow-on offering. The stock is up 4x this year and has risen 10x since its IPO in 2017. 
We have covered the company since listing, links to our previous notes are below. In this note, I'll talk about the deal dynamics and run the deal through our ECM framework.
Links to our prior SEA coverage:

Sea Ltd Trade Idea - Time to Shine - Market Discounting E-Commerce to Almost Zero

Sea Ltd Placement - Capitalizing on Momentum 

Sea Ltd IPO Review - E-Commerce Constitutes 64% of SOTP Valuation 
Sea Ltd IPO Review - A Pure Exposure to SE Asia's E-Commerce &amp; Gaming Despite Stiff Competition



SEA Ltd Placement - New Business Needs New Money

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

JD Health International  / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/jd-health-international" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a> is the largest online healthcare platform and the largest online retail pharmacy by revenue in China in 2019, according to Frost &amp; Sullivan. JD Health will commence trading on Tuesday, 8 December. JD Health priced its IPO at HK$70.58 and <a href="http://www.aastocks.com/en/stocks/news/aafn-con/NOW.1061472/ipo-news" target="_blank" rel="noopener">opened 19% higher</a> at HK$84.00 in the grey market and last stood at $89.05, up 26%.</p></div><div>
<p>In <a href="https://www.smartkarma.com/insights/jd-health-ipo-initiation-e-ppointments" target="_blank" data-smartkarma-citation="insights:45106" rel="noopener">JD Health IPO Initiation: E-Ppointments</a>, we opined that JD Health’s fundamentals suggest that it is an attractive play on China’s online healthcare platform industry. In <a href="https://www.smartkarma.com/insights/jd-health-ipo-phip-new-data-points-and-peer-comparison" target="_blank" data-smartkarma-citation="insights:45377" rel="noopener">JD Health IPO: PHIP New Data Points and Peer Comparison</a>, we stated that the new data points disclosed in the PHIP along with our peer analysis reinforce our view that JD Health has attractive fundamentals. In <a href="https://www.smartkarma.com/insights/jd-health-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:45703" rel="noopener">JD Health IPO: Valuation Insights</a>, we noted that IPO price range is attractive.</p>
<div class="content-highlight"><p>Our base-case DCF derived price target of HK$78.79 per share. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis shows that the IPO price continues to provide good upside potential. </p></div>
</div>

JD Health (6618 HK) is the largest online healthcare platform and the largest online retail pharmacy by revenue in China in 2019, according to Frost &amp; Sullivan. JD Health will commence trading on Tuesday, 8 December. JD Health priced its IPO at HK$70.58 and opened 19% higher at HK$84.00 in the grey market and last stood at $89.05, up 26%.
In JD Health IPO Initiation: E-Ppointments, we opined that JD Health’s fundamentals suggest that it is an attractive play on China’s online healthcare platform industry. In JD Health IPO: PHIP New Data Points and Peer Comparison, we stated that the new data points disclosed in the PHIP along with our peer analysis reinforce our view that JD Health has attractive fundamentals. In JD Health IPO: Valuation Insights, we noted that IPO price range is attractive.
Our base-case DCF derived price target of HK$78.79 per share. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis shows that the IPO price continues to provide good upside potential. 


<p>Airbnb aims to raise around US$2.5bn in its US listing. Airbnb is a global short-stay offering platform. To put it simply, iIt connects hosts, who post available accommodation on Airbnb, with guests, who make bookings for the accommodation. It charges a fee for this service.</p><p>As of 9M20, it had 4 million hosts in more than 220 countries and regions around the world. Since inception, its hosts have welcomed over 825m guest arrivals and have cumulatively earned over $110bn. In 2019, it had 54m active bookers worldwide, who booked 327m nights and experiences on Airbnb.</p><p>Over 2017-19, the company reported steady growth in earnings led by an increase in the number of bookings. Its overall number of guests and hosts have been growing as well, with most metrics heading in the right direction. </p><p>While COVID-19 did take a harsh toll on the company, its quarterly results paint a better picture as compared to its 9M20 numbers. Even during COVID, there have been certain pockets, like domestic and long stay travel which have continued to grow, thus, highlighting the company’s resilience. </p><p>Having said that, Airbnb has failed to explain the reason for the downwards pressure on its 2019 margins. At the same time, the cohorts data highlights the ample other options available to its guests and the severe competition in the industry. </p>

Airbnb aims to raise around US$2.5bn in its US listing. Airbnb is a global short-stay offering platform. To put it simply, iIt connects hosts, who post available accommodation on Airbnb, with guests, who make bookings for the accommodation. It charges a fee for this service.As of 9M20, it had 4 million hosts in more than 220 countries and regions around the world. Since inception, its hosts have welcomed over 825m guest arrivals and have cumulatively earned over $110bn. In 2019, it had 54m active bookers worldwide, who booked 327m nights and experiences on Airbnb.Over 2017-19, the company reported steady growth in earnings led by an increase in the number of bookings. Its overall number of guests and hosts have been growing as well, with most metrics heading in the right direction. While COVID-19 did take a harsh toll on the company, its quarterly results paint a better picture as compared to its 9M20 numbers. Even during COVID, there have been certain pockets, like domestic and long stay travel which have continued to grow, thus, highlighting the company’s resilience. Having said that, Airbnb has failed to explain the reason for the downwards pressure on its 2019 margins. At the same time, the cohorts data highlights the ample other options available to its guests and the severe competition in the industry. 

Airbnb IPO - Time for a Good Break - Even from the Share Lock-Up

IPO and L/S equity, 2015 Starmine top stock picker, Global Equity Research Ltd

Rickin Thakrar

IPO and L/S equity, 2015 Starmine top stock picker

Alibaba Group Holding  / Equity Capital Markets

<p>Late Wednesday evening, the US Congress unanimously passed the 'Holding Foreign Companies Accountable Act' which is a bill that could block Chinese companies from listing or raising funds in the US. </p><p>This bill has already passed by the Senate and will go to President Trump for the bill to be signed. We believe this is likely and while this bill impacts all foreign companies listed in the US, this could lead to the delisting of numerous Chinese companies listed in the US over the next three years. More details below. </p>

Late Wednesday evening, the US Congress unanimously passed the 'Holding Foreign Companies Accountable Act' which is a bill that could block Chinese companies from listing or raising funds in the US. This bill has already passed by the Senate and will go to President Trump for the bill to be signed. We believe this is likely and while this bill impacts all foreign companies listed in the US, this could lead to the delisting of numerous Chinese companies listed in the US over the next three years. More details below. 

US Congress Passes Bill that Could Lead to the Delisting of Chinese Companies on US Exchanges

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

Equity Bottom-Up

<ul>
<li>The revenue growth rate continued to recover to 29% YoY in 3Q20.</li>
<li>However, the stock price has risen by 180% in the past 7 months.</li>
<li>The operating margin decreased if deducting a value change in investment.</li>
<li>The aggressively expanding business, “Meituan Insta-shopping” (美团闪购), is competing with Alibaba (BABA) and JD.com (JD).</li>
</ul>


The revenue growth rate continued to recover to 29% YoY in 3Q20.
However, the stock price has risen by 180% in the past 7 months.
The operating margin decreased if deducting a value change in investment.
The aggressively expanding business, “Meituan Insta-shopping” (美团闪购), is competing with Alibaba (BABA) and JD.com (JD).


Meituan (3690 HK): Good News, Recovery Continued in 3Q20, Bad News, Overvalued

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 (9618 HK)

SEA Ltd Placement - New Business Needs New Money

Sea Ltd (SE US) plans to raise around US$2.2bn in a primary follow-on offering. The stock is up 4x this year and has risen 10x since its IPO in 2017.

Sumeet Singh

JD Health IPO: Trading Debut

JD Health priced its IPO at HK$70.58 and opened 19% higher at HK$84.00 in the grey market. Our DCF sensitivity analysis shows that the IPO price...

Arun George

US Congress Passes Bill that Could Lead to the Delisting of Chinese Companies on US Exchanges

Late Wednesday evening, the US Congress unanimously passed the 'Holding Foreign Companies Accountable Act' which is a bill that could block Chinese...

Rickin Thakrar

Meituan (3690 HK): Good News, Recovery Continued in 3Q20, Bad News, Overvalued

The revenue growth rate continued to recover to 29% YoY in 3Q20. However, the stock price has risen by 180% in the past 7 months.

Ming Lu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

SEA Ltd Placement - New Business Needs New Money

Sea Ltd (SE US) plans to raise around US$2.2bn in a primary follow-on offering. The stock is up 4x this year and has risen 10x since its IPO in 2017.

Sumeet Singh

JD Health IPO: Trading Debut

JD Health priced its IPO at HK$70.58 and opened 19% higher at HK$84.00 in the grey market. Our DCF sensitivity analysis shows that the IPO price...

Arun George

Airbnb IPO - Time for a Good Break - Even from the Share Lock-Up

Airbnb aims to raise around US$2.5bn in its US listing. There is lots to like about the company, apart from it lack of lock-up on some shareholders.

Sumeet Singh

US Congress Passes Bill that Could Lead to the Delisting of Chinese Companies on US Exchanges

Late Wednesday evening, the US Congress unanimously passed the 'Holding Foreign Companies Accountable Act' which is a bill that could block Chinese...

Rickin Thakrar

Meituan (3690 HK): Good News, Recovery Continued in 3Q20, Bad News, Overvalued

The revenue growth rate continued to recover to 29% YoY in 3Q20. However, the stock price has risen by 180% in the past 7 months.

Ming Lu