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

*RBA Speech – A Positive For Aussie BNPL: The Reserve Bank of Australia (RBA) indicated that the status-quo for the buy-now, pay-later (BNPL) sector is likely to continue into the foreseeable future – which is a significant positive for Tencent Holding’s (700.HK) [Tencent] Afterpay Touch (APT.AU) [Afterpay]. Specifically, BNPL operators can still prevent merchants from passing on transaction fees;*Strong Momentum As We Head Into Holiday Season: Just as we head into the holiday season, Tencent’s Afterpay provided some strong key metrics in its latest media release as discussed in “Tencent Holdings – Father Christmas” note dated December 3, 2020.  What a magnificent six months this has been for Afterpay, and the next six months look to be even more transformational with operations beginning in the European Union, launches of banking products, and potentially the launch of the business in Asia (likely under the tutelage of Tencent); and*More Magic Fairy Dust: Tencent continues to hit it out of the park with its Afterpay stake. In addition to a superb return on investment of 400% over the past six months since the stake announcement, this alliance with Australia’s premier financial technology Buy Now Pay Later (BNPL) company is paying dividends to Tencent in numerous other ways.

*RBA Speech – A Positive For Aussie BNPL: The Reserve Bank of Australia (RBA) indicated that the status-quo for the buy-now, pay-later (BNPL) sector is likely to continue into the foreseeable future – which is a significant positive for Tencent Holding’s (700.HK) [Tencent] Afterpay Touch (APT.AU) [Afterpay]. Specifically, BNPL operators can still prevent merchants from passing on transaction fees;*Strong Momentum As We Head Into Holiday Season: Just as we head into the holiday season, Tencent’s Afterpay provided some strong key metrics in its latest media release as discussed in “Tencent Holdings – Father Christmas” note dated December 3, 2020.  What a magnificent six months this has been for Afterpay, and the next six months look to be even more transformational with operations beginning in the European Union, launches of banking products, and potentially the launch of the business in Asia (likely under the tutelage of Tencent); and*More Magic Fairy Dust: Tencent continues to hit it out of the park with its Afterpay stake. In addition to a superb return on investment of 400% over the past six months since the stake announcement, this alliance with Australia’s premier financial technology Buy Now Pay Later (BNPL) company is paying dividends to Tencent in numerous other ways.

*Decent Operating Results: Lufax Holdings (LU.US) [Lufax] reported 3Q20 results of CNY 2.2 bn, declining CNY 929 mn (30.1%) on a linked quarter basis. However, when we exclude the CNY 1.3 bn restructuring charge and gains of CNY 144 mn, Lufax’ operating results amounted to CNY 3.3 bn – increasing CNY 228 mn (7.3%) over the same period;  and*Regulatory Risk Is Prevalant: An evolution of the regulatory environment remains a significant challenge to Lufax, and more likely than not will require further business adjustments and ad pressure to the bottom-line, including: lower interest rate caps;  higher capital requirements; improved risk-taking controls; along with other consumer protection measures. That being said, much of the regulatory uncertainty is more from policy window guidance rather than from new regulations themselves.

*Decent Operating Results: Lufax Holdings (LU.US) [Lufax] reported 3Q20 results of CNY 2.2 bn, declining CNY 929 mn (30.1%) on a linked quarter basis. However, when we exclude the CNY 1.3 bn restructuring charge and gains of CNY 144 mn, Lufax’ operating results amounted to CNY 3.3 bn – increasing CNY 228 mn (7.3%) over the same period;  and*Regulatory Risk Is Prevalant: An evolution of the regulatory environment remains a significant challenge to Lufax, and more likely than not will require further business adjustments and ad pressure to the bottom-line, including: lower interest rate caps;  higher capital requirements; improved risk-taking controls; along with other consumer protection measures. That being said, much of the regulatory uncertainty is more from policy window guidance rather than from new regulations themselves. 

Lufax Holdings – Good Number Right Out Of The Gate

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

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

Yatsen Holding Ltd / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/yatsen-holding-ltd" target="_blank" data-smartkarma-citation="entities:29719:1" rel="noopener">Yatsen Holding (YSG US)</a> , the owner of the Perfect Diary cosmetic and skin-care brand in China has filed for an IPO to list its shares in the US and has a placeholder indication to raise US$100m.
The company has launched three cosmetic brands in China, Perfect Diary, Little Ondine and Abby’s Choice, and sells these products through third-party e-commerce platforms, offline experience stores and social and content platforms.
In this insight, we examine Yatsen’s business model, business segments, revenues and margins.

Yatsen Holding (YSG US) , the owner of the Perfect Diary cosmetic and skin-care brand in China has filed for an IPO to list its shares in the US and has a placeholder indication to raise US$100m.
The company has launched three cosmetic brands in China, Perfect Diary, Little Ondine and Abby’s Choice, and sells these products through third-party e-commerce platforms, offline experience stores and social and content platforms.
In this insight, we examine Yatsen’s business model, business segments, revenues and margins.

Yatsen IPO: Revenue Growth Comes at the Expense of Margins

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

<a href="https://www.smartkarma.com/entities/ant-financial-services-group" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Group (6688 HK)</a> almost raised US$35bn in the largest IPO in history. While the IPO may eventually proceed, we are unsure of the valuations the company could demand the next time around.Following the suspension of listing on the STAR Market by the Shanghai Stock Exchange due to a 'major event', <a href="https://www.smartkarma.com/entities/ant-financial-services-group" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Group (6688 HK)</a> announced the suspension of the H-share listing too. The company also said that the refund of the application monies will be made as soon as possible to Hong Kong retail investors.This 'major event' will have knock-on implications for a host of other trades/strategies as well. In this Insight, we take a look at some of them.

Ant Group (6688 HK) almost raised US$35bn in the largest IPO in history. While the IPO may eventually proceed, we are unsure of the valuations the company could demand the next time around.Following the suspension of listing on the STAR Market by the Shanghai Stock Exchange due to a 'major event', Ant Group (6688 HK) announced the suspension of the H-share listing too. The company also said that the refund of the application monies will be made as soon as possible to Hong Kong retail investors.This 'major event' will have knock-on implications for a host of other trades/strategies as well. In this Insight, we take a look at some of them.

APAC IPOs & Placements

Zhen Zhou, Toh

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.


Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs.




Ant Group (6688 HK) debuts this coming Thursday. It had a massive US$35bn (A+H) deal size and proportionately humongous demand of US$3 trillion (mostly from the STAR board tranche) from retail investors. Hong Kong books were also said to have been covered an hour after launch with multiple investors placing more than US$1bn of order. This week, we look at valuation at IPO price, index inclusion impacts, STAR board trading stats, and A/H spread.


Ant Group IPO - Index Inclusion Quick Note: Now HSCEI Wants to Gate Crash the Party 

Ant Group IPO:  STAR Market Trading Stats, A/H Spread 

Ant Group IPO: Final Say. Strategics, Index Impact 

Ant Group Pre-IPO: Updated Valuation. It’s Going Higher. 

For other upcoming IPOs, Remegen Ltd (1788976D CH) launched its IPO bookbuild this week and it is expected to list the week after, on November 9. The IPO boasts a long list of reputable, long-only cornerstone investors. Books closed early and were reported to be multiple times covered. As for secondary listings, New Oriental Education (EDU US) filed its PHIP and launched its US$1.44bn bookbuild. It will start trading on the 9th of November whereas GDS Holdings (ADR) (GDS US) which launched last week, will trade tomorrow.


RemeGen (荣昌生物) IPO: Pricing the R&amp;D Leadership 

New Oriental Hong Kong Secondary - Might Be Relatively Small 

GDS Holdings HK Secondary Trading- Strong Coverage but No Discount and Volatile Markets Won't Help 

This week's Property Management Services listings had been disappointing. They will likely set a weak tone for other upcoming IPOs, Jinke Smart Services (JKS HK) and Sunac Services Holdings (1820476D HK), which have both filed their PHIP with HKEX. Hopefully, we get to see the deals launch at more palatable valuation.


Sunac Services (融创服务) Pre-IPO -   Peer Comparison and PHIP Updates 

Jinke Smart Services (金科智慧服务) Pre-IPO - Peer Comparison and Early Thoughts on Valuation 

We also heard that Kuaishou will file its draft prospectus on HKEX in this week and Antengene (ANGENE HK) is looking to premarket its IPO next week. 


Antengene (德琪医药) Pre-IPO: Proven R&amp;D Track Record by Founder Matters 

For pipeline IPOs, there had been news reporting that PCCW Ltd (8 HK)'s Viu International OTT is working towards a US listing that could raise about US$200m. In Malaysia, Smart Glove hired banks to work towards a potential US$200 IPO whereas, in India, Gland Pharma plans to launch its US$900m in November. 
For other listings this week, Singapore finally got a win (considering a sea of red in global markets on Friday) with Nanofilm Technologies International (NANO SP) closing 12% above IPO price on its trading debut. Lufax Holdings (LU US), on the hand, closed 4% below IPO price.


Nanofilm Technologies IPO Trading - May Just Be the One that Stands Out 

Lufax IPO Trading - Possible FTSE Inclusion Might Help in the Short-Term 





Accuracy Rate:



Our overall accuracy rate is 73.4% for IPOs and 66.4% for Placements 


(Performance measurement criteria is explained at the end of the note)






No new IPO filings this week  




Below is a snippet of our IPO tool showing upcoming events for the next week. The IPO tool is designed to provide readers with timely information on all IPO related events (Book open/closing, listing, initiation, lock-up expiry, etc) for all the deals that we have worked on. You can access the tool here or through the tools menu.






News on Upcoming IPOs  





Hong Kong's windfall from poster boy Ant's impending IPO
Jack Ma’s Ant Plans Early Book Close for Hong Kong IPO
Sunac China’s property management arm seeks at least US$1 billion in Hong Kong IPO
Kuaishou Technology to file for Hong Kong IPO within two weeks




Analysis on Upcoming IPOs






Name
Insight


Hong Kong


Antengene

Antengene (德琪医药) Pre-IPO: Proven R&amp;D Track Record by Founder Matters 


Blue Moon

Blue Moon Group Pre-IPO - The Positives - Dominant Market Share, Strong Online Sales 



Blue Moon

Blue Moon Group Pre-IPO - The Negatives - Flagging Offline Sales, Not Really a Primary Raising 



Blue Moon

Blue Moon: No. 1 But No Exclusive Advantage, Observation on the Ground 



Blue Moon

Blue Moon Group Pre-IPO - Online Reviews and Peer Comparison 



ByteDance

ByteDance (字节跳动) IPO: How Jinri Toutiao Paves The Way for a Bigger Empire (Part 1)



ByteDance

ByteDance (字节跳动) Pre-IPO: Why Facebook Should Worry About TikTok 



ByteDance

ByteDance (字节跳动) IPO: Tiktok the No.1 Short Video App for a Good Reason (Part 2)



ByteDance

ByteDance (字节跳动) Pre-IPO: How Has It Done in 1H? 



ByteDance

ByteDance: The Unlisted Company’s Video Apps Leading the Market and Threatening Internet Giants 



ByteDance

ByteDance (字节跳动) Pre-IPO: Why Facebook Should Worry About TikTok 



ByteDance

ByteDance (字节跳动) Pre-IPO - Globally the Most Downloaded App for Jan 2020 Driven by India 



ByteDance

ByteDance (字节跳动) Pre-IPO: Global Ambition Meets Regulatory Challenges 



Dida

Dida Pre-IPO - Making Hay While Big Brother Retreats 



E-Star Comm

E-Star Commercial Management Pre-IPO - Better Disclosure in New Prospectus 



E-Star Comm

E-Star Commercial Management Pre-IPO - Still Largely Reliant on Galaxy, Poor Disclosure Doesn’t Help 



Jiayuan Svcs

Jiayuan Services (佳源服务) Pre-IPO - Another Small Property Management Company 



Jinke Svcs

Jinke Smart Services (金科智慧服务) Pre-IPO - GFA Growth at the Expense of Fees 



Jinke Svcs

Jinke Smart Services (金科智慧服务) Pre-IPO - Peer Comparison and Early Thoughts on Valuation 



Kilcoy

Kilcoy Global Foods Pre-IPO - Rapid Earnings Growth on the Back of Margin Improvement 



Kilcoy

Kilcoy Global Foods Pre-IPO - A Lot of Things Still Remain Unexplained 



Megvii

Megvii (旷视) Pre-IPO - Remarkable Growth (Part 1) 


Megvii

Megvii (旷视) Pre-IPO - A Bet on the Future - Segments, Revenue Drivers and Growth Potential 


Megvii

Megvii (旷视) Pre-IPO - The Real Race Is in Research - Founders' Profile and Talent 


Megvii

Megvii (旷视) Pre-IPO - Competitive Landscape and Peer Analysis 


Megvii

Megvii (旷视) Pre-IPO -  Initial Thoughts on Valuation 


Ocumension

Ocumension (欧康维视) Pre-IPO: All Ready for a Great Listing Except a Block Buster 


Pop Mart

Pop Mart Pre-IPO - The Negatives - Is It a Brand Owner or Just a Retailer? 


Pop Mart

Pop Mart Pre-IPO - The Positives - Expanding Portfolio+Wider Distribution= Explosive Earnings Growth 


Pop Mart

Pop Mart Pre-IPO - Peer Set and Valuation 


Pop Mart

Pop Mart Pre-IPO Quick Note - On the Ground - Pop-Up Stores Are Effective 


Sunac Svcs

Sunac Services (融创服务) Pre-IPO - Promising Growth &amp; Diversifying Away from Sunac Via Acquisitions 


Sunac Svcs

Sunac Services (融创服务) Pre-IPO -   Peer Comparison and PHIP Updates 


RemeGen

RemeGen (荣昌生物) Pre-IPO: Thoughts on Valuation of RC18 and RC48 


Simcere

Simcere (先声制药) Pre-IPO: Long History but Products Concentrated 


Toplist

Toplist China Pre-IPO - Overwhelmingly More Negatives than Positives 


Tasly

Tasly Biopharm (天士力生物) IPO: Visible Growth from Approved Drug but Lacks Blockbusters 


WeDoctor

WeDoctor (微医) Pre-IPO -App Walk Through - The Online Medical Directory and More 


WeDoctor

WeDoctor (微医) Pre-IPO - A More Focused Online Medical Svc Provider than Ping An Good Doctor 


India


ASK

ASK Investment Managers Pre-IPO - Riding on a Wave of Wealth 


Anmol Ind
Anmol Industries Pre-IPO Quick Take - No Growth, Generous Payments to Founders


Bharat Hotel

Bharat Hotels Pre-IPO - Catching up with Peers 



Burger King

Burger King India Pre-IPO - Has Been Growing Fast and Plans to Grow Even Faster 



Burger King

Burger King India Pre-IPO - Peer Comparison Yields Interesting Nuggets on Profitability and Capex 



Bajaj En

Bajaj Energy Pre-IPO - Supposed to Deliver Steady Performance if Only Its Sole Client Would Let It 



CMS Info
CMS Info Systems Pre-IPO - When a PE Sells to Another PE... Only One Gets the Timing Right


Crystal Crop
Crystal Crop Protection Pre-IPO - DRHP Raises More Questions than in Answers


ESAF SFB

ESAF Small Finance Bank Pre-IPO - Growing Fast but Remains Highly Dependant on a Related Party 


Equitas SFB

Equitas Small Finance Bank Pre-IPO - Another Forced Small Finance Bank Listing 


Equitas SFB

Equitas Small Finance Bank Pre-IPO - Another Forced Small Finance Bank Listing 


Flemingo 
Flemingo Travel Retail Pre-IPO - Its a Different Business in Every Country


Emami Cem

Emami Cement Pre-IPO - Still in Ramp Up Phase but Shares Pledge Might Lead to an Early IPO 


IRFC

Indian Railway Finance Pre-IPO - Low Risk, Low Margin Business 


NSE
NSE IPO Preview- Not Only Fast..its Risky and Expensive


NSE
National Stock Exchange Pre-IPO Review - Bigger, Better, Stronger but a Little Too Fast for Some


Mrs. Bector
Mrs. Bectors Food Specialities Pre-IPO Quick Take - Sales for Its Main Segment Have Been Sta



LIC


Life Insurance Corporation of India Pre-IPO - Early Take on India's Largest IPO 



Lodha

Lodha Developers Pre-IPO - Second Time Lucky but Not Really that Much Affordable


Lodha
Lodha Developers IPO: Presence in Affordable Segment Saves Lodha the Blushes in a Sluggish Mkt


Penna Cem

Penna Cement - Aggressive Expansion Plans Even Though Past Performance Has Been Tepid 


PNB Met
PNB Metlife Pre-IPO Quick Take - Doesn't Stack up Well Versus Its Larger Peers


Samhi Hotels

Samhi Hotels Pre-IPO - Assets and Borrowings Are Growing, but Earnings Haven’t Kept Pace 


Malaysia


QSR
QSR Brands Pre-IPO - As Healthy as Fast Food


Thailand


PTTOR

PTT Oil and Retail IPO - F&amp;B Business Is the Profit Driver 


The U.S


CDP

CDP Holdings Pre-IPO Review - Highly Reliant on Best Inc. 


CloudMinds
CloudMinds Inc Early Thoughts - Still Nascent





ECM Weekly (1 November 2020) - Ant Group, Sunac Services, New Oriental HK, Bio-Thera

China

Lufax Holding Ltd operates technology-empowered personal financial services platform. The Company connects financial institutions to facilitate lending and wealth management products tailored to individual customer's needs and risk appetites.

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Lufax Holding (LU US)

Tencent Holdings – After The Speech

TENCENT HOLDINGS: Reserve Bank of Australia indicated that the status-quo for BNPL is likely to continue – which is a significant positive for...

Thomas J. Monaco

Lufax Holdings – Good Number Right Out Of The Gate

LUFAX HOLDINGS: Lufax operating results were solid. However, the regulatory environment remains a significant challenge.

Thomas J. Monaco

Yatsen IPO: Revenue Growth Comes at the Expense of Margins

Yatsen Holdings, the owner of the Perfect Diary cosmetic and skin-care brand in China has filed for an IPO to list its shares in the US and has a...

Shifara Samsudeen, ACMA, CGMA

Ant Group: IPO Suspension Implications

With Ant Group suspending the H-share listing following SSE's suspension of the A-share listing, there will be multiple implications for trades and...

Brian Freitas

ECM Weekly (1 November 2020) - Ant Group, Sunac Services, New Oriental HK, Bio-Thera

This week, much of the focus is on Ant whereas HK had a disappoint start with the poor debut of KWG Living and Shimao Services. On the other hand,...

Zhen Zhou, Toh

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