Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Equity Bottom-Up

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<h2>About India Channel Insight</h2>
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<p>Our objective with India Channel Insight is to share snippets from our channel interactions that are part of our research process. These snippets can potentially be signals for larger themes/ideas emerging out of these interactions.  </p>
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<p>For this insight, we focus on <a href="https://www.smartkarma.com/entities/easemytrip" target="_blank" data-smartkarma-citation="entities:28897:1" rel="noopener">EaseMyTrip (0896537D IN)</a> with an objective to understand it's on-ground competitiveness; <a href="https://www.smartkarma.com/entities/matrimony-com" target="_blank" data-smartkarma-citation="entities:22922:1" rel="noopener">Matrimony.com (MATRIM IN)</a> where Q3 is hinting at a change in stance compared to our earlier view and a sourcing channel of <a href="https://www.smartkarma.com/entities/trent-ltd" target="_blank" data-smartkarma-citation="entities:8410:1" rel="noopener">Trent Ltd (TRENT IN) </a>to understand the growth prospects ahead. </p>
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About India Channel Insight


Our objective with India Channel Insight is to share snippets from our channel interactions that are part of our research process. These snippets can potentially be signals for larger themes/ideas emerging out of these interactions.  


For this insight, we focus on EaseMyTrip (0896537D IN) with an objective to understand it's on-ground competitiveness; Matrimony.com (MATRIM IN) where Q3 is hinting at a change in stance compared to our earlier view and a sourcing channel of Trent Ltd (TRENT IN) to understand the growth prospects ahead. 


India Channel Insight | Easemytrip, Matrimony.com, Trent

Indian Accounting Research Analyst, Trudence Capital Advisors

Nitin Mangal

Indian Accounting Research Analyst

Equity Capital Markets

Easy Trip Planners  / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/easemytrip" target="_blank" data-smartkarma-citation="entities:28897:1" rel="noopener">EaseMyTrip (0896537D IN)</a> or Easy Trip Planners Ltd is the third largest player in the Indian Online Travel Agency (OTA) space behind <a href="https://www.smartkarma.com/entities/makemytrip-ltd" target="_blank" data-smartkarma-citation="entities:23580:1" rel="noopener">Makemytrip Ltd (MMYT US)</a> and <a href="https://www.smartkarma.com/entities/yatra-online-inc" target="_blank" data-smartkarma-citation="entities:25997:1" rel="noopener">Yatra Online (YTRA US); </a>in fact it has surpassed Yatra in the number of gross booking volumes (air ticketing) for F20.</p>
<p>The company has planned to come up with an IPO of INR 5.1 bn this week; the IPO does not entail fresh issue of shares but rather only comprises of offer for sale by the promoters. Similar to our previous coverages on IPO, we will not dwell on the valuation aspect, but instead put forward certain aspects with respect to governance and balance sheet checks which one must know about. </p>

EaseMyTrip (0896537D IN) or Easy Trip Planners Ltd is the third largest player in the Indian Online Travel Agency (OTA) space behind Makemytrip Ltd (MMYT US) and Yatra Online (YTRA US); in fact it has surpassed Yatra in the number of gross booking volumes (air ticketing) for F20.
The company has planned to come up with an IPO of INR 5.1 bn this week; the IPO does not entail fresh issue of shares but rather only comprises of offer for sale by the promoters. Similar to our previous coverages on IPO, we will not dwell on the valuation aspect, but instead put forward certain aspects with respect to governance and balance sheet checks which one must know about. 

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

<p><a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> gives you deeply discounted exposure to one of the highest quality companies listed in the Emerging Markets, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>. Should you back out the estimated fair values of all investments outside of Prosus’ 31% holding in Tencent from the current Naspers market cap, you are effectively buying exposure to Tencent for only 16.2x 2021F earnings.</p>
<p>Often overlooked, Naspers also gives exposure to a diverse range of online businesses, in differing stages of development, which are likely to structurally benefited from lasting changes to consumer behaviour in the wake of the COVID-19 pandemic.</p>
<p>Further, Management has signalled their focus on meaningfully reducing its discount to listed net asset value by implementing a $5bn share buyback program, during November 2020, which should also support the share price through volatility in the near term. </p>
<p>The key risk to the investment thesis regards the newly proposed Anti-Monopoly Compliance Guidelines for the Platform Economy released by China’s State Administration for Market Regulation (SAMR), a clear signal of tougher antitrust regulations going forward. Tencent should, however, be able to manage through these better than the large eCommerce players.</p>

Naspers (NPN SJ) gives you deeply discounted exposure to one of the highest quality companies listed in the Emerging Markets, Tencent Holdings (700 HK). Should you back out the estimated fair values of all investments outside of Prosus’ 31% holding in Tencent from the current Naspers market cap, you are effectively buying exposure to Tencent for only 16.2x 2021F earnings.
Often overlooked, Naspers also gives exposure to a diverse range of online businesses, in differing stages of development, which are likely to structurally benefited from lasting changes to consumer behaviour in the wake of the COVID-19 pandemic.
Further, Management has signalled their focus on meaningfully reducing its discount to listed net asset value by implementing a $5bn share buyback program, during November 2020, which should also support the share price through volatility in the near term. 
The key risk to the investment thesis regards the newly proposed Anti-Monopoly Compliance Guidelines for the Platform Economy released by China’s State Administration for Market Regulation (SAMR), a clear signal of tougher antitrust regulations going forward. Tencent should, however, be able to manage through these better than the large eCommerce players.

2021 High Conviction: Naspers, Deeply Discounted Exposure to Accelerating Online Sales

<p>Between early-2018 and late-2019, <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> / <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> management took meaningful steps to attempt a narrowing of their discount to listed NAV, the most important of which was announcing the intended spin-off of all Naspers’ ex-South African internet assets into a new entity, Prosus, to be listed on Euronext Amsterdam, with a secondary listing on the JSE, which resulted in a narrowing of the discount from c.35% to c.25%. </p><p>However, in the year since the listing of Prosus, we have seen a “double” discount manifest given Prosus’ c. 27% discount to its listed NAV as well as Naspers’ c. 29% discount to its listed NAV (which entirely comprises its 73% shareholding in Prosus). Intuitively, this seems excessive and, in this insight, I take a closer look at, what I believe to be, the top reasons for this discount, to find catalysts which might unlock value. </p><p>I believe we will continue to see a c.25% holding company discount at Prosus, with another c.20% warranted at Naspers. I cannot, however, identify any catalysts that would cause the “double” discount to widen and have applied these values to my SOTP. I estimate fair value for Prosus at €101/share (31% upside) and Naspers at R4,404/share (47% upside).</p>

Between early-2018 and late-2019, Naspers (NPN SJ) / Prosus (PRX NA) management took meaningful steps to attempt a narrowing of their discount to listed NAV, the most important of which was announcing the intended spin-off of all Naspers’ ex-South African internet assets into a new entity, Prosus, to be listed on Euronext Amsterdam, with a secondary listing on the JSE, which resulted in a narrowing of the discount from c.35% to c.25%. However, in the year since the listing of Prosus, we have seen a “double” discount manifest given Prosus’ c. 27% discount to its listed NAV as well as Naspers’ c. 29% discount to its listed NAV (which entirely comprises its 73% shareholding in Prosus). Intuitively, this seems excessive and, in this insight, I take a closer look at, what I believe to be, the top reasons for this discount, to find catalysts which might unlock value. I believe we will continue to see a c.25% holding company discount at Prosus, with another c.20% warranted at Naspers. I cannot, however, identify any catalysts that would cause the “double” discount to widen and have applied these values to my SOTP. I estimate fair value for Prosus at €101/share (31% upside) and Naspers at R4,404/share (47% upside).

Naspers: “Double” Discount Warranted? The Search for a Catalyst Continues

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

<p>On July 28, several media sources speculated that <a href="https://www.smartkarma.com/entities/trip-com-group-ltd" target="_blank" data-smartkarma-citation="entities:180:1" rel="noopener">Trip.com (TCOM US)</a> was working to de-list from NASDAQ. Rising China-US political tensions and sluggish recent share performance are the likely drivers of this move.</p><p>A potential acquirer could emerge from a short list of existing strategic partners. Alternatively, new strategic investors or private equity firms could potentially join the bidding. </p><p>All suitors must face the same fundamental questions in developing a bid for Trip.com, namely:</p><ul>
<li>Can Trip.com re-ignite strong revenue growth in China's maturing online travel market?</li>
<li>Can the company generate value from the commoditized ticketing segment?</li>
<li>Can Trip.com fend off growing competition from smaller OTAs and internal efforts of airlines and hotel chains?</li>
<li>And lastly, how does Covid19 alter the company's long-term growth prospects?</li>
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On July 28, several media sources speculated that Trip.com (TCOM US) was working to de-list from NASDAQ. Rising China-US political tensions and sluggish recent share performance are the likely drivers of this move.A potential acquirer could emerge from a short list of existing strategic partners. Alternatively, new strategic investors or private equity firms could potentially join the bidding. All suitors must face the same fundamental questions in developing a bid for Trip.com, namely:
Can Trip.com re-ignite strong revenue growth in China's maturing online travel market?
Can the company generate value from the commoditized ticketing segment?
Can Trip.com fend off growing competition from smaller OTAs and internal efforts of airlines and hotel chains?
And lastly, how does Covid19 alter the company's long-term growth prospects?


In Effort to De-List from NASDAQ, Trip.com Unlikely to Find Many Eager Buyers

United States

Makemytrip Ltd. offers travel services over the Internet.  The Company operates websites that allow travelers to research and plan trips and book airline tickets, hotels, packages, rail tickets, bus tickets, and rental cars. Makemytrip also offers access to travel insurance.

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Makemytrip Ltd (MMYT US)

India Channel Insight | Easemytrip, Matrimony.com, Trent

Our objective with India Channel Insight is to share snippets from our channel interactions that are part of our research process. For this insight...

Pranav Bhavsar

EaseMyTrip IPO: Not so Easy on the Eye

While Easemytrip operations suggest short-mid term growth, our forensic checks do indicate some balance sheet and governance concerns as well which...

Nitin Mangal

2021 High Conviction: Naspers, Deeply Discounted Exposure to Accelerating Online Sales

Naspers: Deeply discounted exposure to Tencent, a diverse range of online businesses set to benefit from accelerated online activity post-COVID-19...

Wium Malan, CFA

Naspers: “Double” Discount Warranted? The Search for a Catalyst Continues

Since the listing of Prosus, we have seen a “double” discount to listed NAV manifest at Naspers. I take a closer look at the top reasons for this...

Wium Malan, CFA

In Effort to De-List from NASDAQ, Trip.com Unlikely to Find Many Eager Buyers

On July 28, several media sources speculated that Trip.com (TCOM US) was working to de-list from NASDAQ. Rising China-US political tensions and...

Tracking Traffic

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