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>Kakao Pay (KP), one of South Korea’s largest payment and financial services apps, aims to raise up to US$1.3bn in its South Korean IPO. Kakao held a 55% stake prior to listing, with Ant Financial holding the balance 45% stake.</p></div><div><p>We have covered most aspects of the deal in our earlier notes:</p></div><div><ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/kakao-pay-ipo-guided-by-ant-financial-to-be-a-mini-ant" target="_blank" rel="noopener">Kakao Pay IPO - Guided by Ant Financial to be a mini Ant,</a></li>
<li><a href="https://www.smartkarma.com/insights/kakao-pay-ipo-peer-comparison-local-and-international" target="_blank" rel="noopener">Kakao Pay IPO - Peer comparison - local and international, and</a></li>
</ul></div><div><ul style="list-style-type: disc;"><li><a href="https://www.smartkarma.com/insights/kakao-pay-ipo-valuation-and-likely-impact-of-latest-announcement" target="_blank" rel="noopener">Kakao Pay IPO - Valuation and Likely Impact of Latest Announcement</a></li></ul></div><ul><li><a href="https://www.smartkarma.com/insights/kakao-pay-ipo-low-end-still-appear-reasonable-but-stock-will-more-likely-be-driven-by-sentiment" target="_blank" rel="noopener">Kakao Pay IPO - Low-End Still Appear Reasonable but Stock Will More Likely Be Driven by Sentiment</a></li></ul><div><p>In this note we will compare KP with its sister company, Kakao Bank.</p></div>

Kakao Pay (KP), one of South Korea’s largest payment and financial services apps, aims to raise up to US$1.3bn in its South Korean IPO. Kakao held a 55% stake prior to listing, with Ant Financial holding the balance 45% stake.We have covered most aspects of the deal in our earlier notes:
Kakao Pay IPO - Guided by Ant Financial to be a mini Ant,
Kakao Pay IPO - Peer comparison - local and international, and
Kakao Pay IPO - Valuation and Likely Impact of Latest AnnouncementKakao Pay IPO - Low-End Still Appear Reasonable but Stock Will More Likely Be Driven by SentimentIn this note we will compare KP with its sister company, Kakao Bank.

Kakao Pay IPO - Comparison with Kakao Bank and an Alternate Look at Valuation

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Thematic (Sector/Industry)

<p>There were four new<a href="http://www.koreaherald.com/view.php?ud=20211013001007" target="_blank" rel="noopener"> metaverse related ETFs</a> were launched in Korea on 13 October for the first time ever in the Korean stock market. The first three ETFs (KBSTAR iSelect Metaverse, Hanaro Fn K-Metaverse MZ, and Tiger Fn Metaverse) are passive funds. KODEX K-Metaverse Active is an active fund. These four new ETFs are as follows:</p><p><strong>1) Tiger Fn Metaverse</strong> (managed by Mirae Asset Global Investment)</p><p><strong>2) KBSTAR iSelect Metaverse</strong> (managed by KB Asset Management)</p><p><strong>3) Hanaro Fn K-Metaverse MZ</strong> (managed by NH Amundi Asset Management)</p><p><strong>4) KODEX K-Metaverse Active</strong>  (managed by Samsung Asset Management)</p><p>The stocks that are included in these metaverse related names also tend to be higher beta ones that could perform much better in a rising market environment. However, because these stocks tend to be higher beta stocks with high valuation multiples, it could be challenging for these stocks to outperform the market when the market downturn occurs. </p>

There were four new metaverse related ETFs were launched in Korea on 13 October for the first time ever in the Korean stock market. The first three ETFs (KBSTAR iSelect Metaverse, Hanaro Fn K-Metaverse MZ, and Tiger Fn Metaverse) are passive funds. KODEX K-Metaverse Active is an active fund. These four new ETFs are as follows:1) Tiger Fn Metaverse (managed by Mirae Asset Global Investment)2) KBSTAR iSelect Metaverse (managed by KB Asset Management)3) Hanaro Fn K-Metaverse MZ (managed by NH Amundi Asset Management)4) KODEX K-Metaverse Active  (managed by Samsung Asset Management)The stocks that are included in these metaverse related names also tend to be higher beta ones that could perform much better in a rising market environment. However, because these stocks tend to be higher beta stocks with high valuation multiples, it could be challenging for these stocks to outperform the market when the market downturn occurs. 

Listing of 4 New Metaverse Related ETFs in Korea

<div><p>Kakao Pay (KP), one of South Korea’s largest payment and financial services apps, aims to raise up to US$1.3bn in its South Korean IPO. Kakao held a 55% stake prior to listing, with Ant Financial holding the balance 45% stake.</p></div><div></div><div>
<p>We have covered most aspects of the deal in our earlier notes:</p>
<ul>
<li><a href="https://www.smartkarma.com/insights/kakao-pay-ipo-guided-by-ant-financial-to-be-a-mini-ant" target="_blank" rel="noopener">Kakao Pay IPO - Guided by Ant Financial to be a mini Ant, </a></li>
<li><a href="https://www.smartkarma.com/insights/kakao-pay-ipo-peer-comparison-local-and-international" target="_blank" rel="noopener">Kakao Pay IPO - Peer comparison - local and international, and</a></li>
</ul>
</div><ul><li><a href="https://www.smartkarma.com/insights/kakao-pay-ipo-valuation-and-likely-impact-of-latest-announcement" target="_blank" rel="noopener">Kakao Pay IPO - Valuation and Likely Impact of Latest Announcement</a></li></ul><div><p>As the company is slated to be in front of investors again and finally launch its bookbuilding next week, in this note we will talk about the updates from the refiled prospectus and have a relook at valuations.</p></div>

Kakao Pay (KP), one of South Korea’s largest payment and financial services apps, aims to raise up to US$1.3bn in its South Korean IPO. Kakao held a 55% stake prior to listing, with Ant Financial holding the balance 45% stake.
We have covered most aspects of the deal in our earlier notes:

Kakao Pay IPO - Guided by Ant Financial to be a mini Ant, 
Kakao Pay IPO - Peer comparison - local and international, and

Kakao Pay IPO - Valuation and Likely Impact of Latest AnnouncementAs the company is slated to be in front of investors again and finally launch its bookbuilding next week, in this note we will talk about the updates from the refiled prospectus and have a relook at valuations.

Kakao Pay IPO - Low-End Still Appear Reasonable but Stock Will More Likely Be Driven by Sentiment

<div class="content-highlight">
<p>In this insight, we provide 8 examples of how metaverse is revolutionizing numerous businesses in Korea. We also provide a list of Korean companies that are actively trying to expand their metaverse businesses. Because metaverse is in the initial stages of growth for many of these businesses, their contributions to their companies' sales and profits may not be meaningful right now. However, they are experiencing a significant popularity. Metaverse is certainly one of the key industry trends that is likely to have a multi-years impact on the companies mentioned in this insight.</p>
<p>The term "metaverse" was first coined by the writer Neal Stephenson in his 1992 science fiction novel <a href="https://digiday.com/marketing/wtf-is-the-metaverse/" target="_blank" rel="noopener"><em>Snow Crash </em></a>where metaverse refers to a popular virtual world where the main characters are equipped with augmented technologies. </p>
<p>Metaverse refers to a computerized domain where the users can share their virtual encounters. Still in the beginning phases of advancement, metaverse has become more important in key industries industries including technology, media, and telecom. In addition, metaverse is also impacting other major industries such as retail, gaming, and fashion. </p>
<p>Metaverse will empower its users to be more engaged in online shopping, web-based media, entertainment, and share virtual encounters. Metaverse is often considered as a "coming together" of numerous technologies including augmented reality (AR), virtual reality (VR), 5G, smartphones, and distributed computing. Up until recently, the gaming industry has been driving the demand for metaverse. However, greater improvements in technologies have allowed metaverse to flourish in other industries as well. </p>
<p>South Korea is one of the key countries driving the metaverse industry globally. This is one of the leaders in this area and there will be numerous, interesting opportunities involving metaverse in Korea. </p>
</div>


In this insight, we provide 8 examples of how metaverse is revolutionizing numerous businesses in Korea. We also provide a list of Korean companies that are actively trying to expand their metaverse businesses. Because metaverse is in the initial stages of growth for many of these businesses, their contributions to their companies' sales and profits may not be meaningful right now. However, they are experiencing a significant popularity. Metaverse is certainly one of the key industry trends that is likely to have a multi-years impact on the companies mentioned in this insight.
The term "metaverse" was first coined by the writer Neal Stephenson in his 1992 science fiction novel Snow Crash where metaverse refers to a popular virtual world where the main characters are equipped with augmented technologies. 
Metaverse refers to a computerized domain where the users can share their virtual encounters. Still in the beginning phases of advancement, metaverse has become more important in key industries industries including technology, media, and telecom. In addition, metaverse is also impacting other major industries such as retail, gaming, and fashion. 
Metaverse will empower its users to be more engaged in online shopping, web-based media, entertainment, and share virtual encounters. Metaverse is often considered as a "coming together" of numerous technologies including augmented reality (AR), virtual reality (VR), 5G, smartphones, and distributed computing. Up until recently, the gaming industry has been driving the demand for metaverse. However, greater improvements in technologies have allowed metaverse to flourish in other industries as well. 
South Korea is one of the key countries driving the metaverse industry globally. This is one of the leaders in this area and there will be numerous, interesting opportunities involving metaverse in Korea. 


How Is Metaverse Revolutionizing Businesses in Korea? Virtual Humans Rozy & Lucy Are Just a Start

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Ebook Initiative Japan Co Ltd / Event-Driven

<p>Back in April I discussed how those looking at <a href="https://www.smartkarma.com/entities/softbank-corp" target="_blank" data-smartkarma-citation="entities:27445:1" rel="noopener">Softbank Corp (9434 JP)</a> on an EV/EBITDA basis would be measuring the company incorrectly. The insight was <a href="https://www.smartkarma.com/insights/softbank-corp-accounting-for-the-accounting-is-complicated" target="_blank" data-smartkarma-citation="insights:50684" rel="noopener">Softbank Corp - Accounting for The Accounting Is Complicated</a>.</p><p>Yeah... it was an accounting thing. </p><p>When you look at Softbank Corp and its consolidated revenues and EBITDA, you were looking at the parent co business of telecoms, then because Softbank Corp owned 50% of a company which owned 65% of <a href="https://www.smartkarma.com/entities/z-holdings-corp" target="_blank" data-smartkarma-citation="entities:19603:1" rel="noopener">Z Holdings (4689 JP)</a> which itself consolidated <a href="https://www.smartkarma.com/entities/ebook-initiative-japan-co-lt" target="_blank" data-smartkarma-citation="entities:10613:1" rel="noopener">Ebook Initiative Japan Co Lt (3658 JP)</a> because of the 43% it held, it meant that Softbank Corp consolidated 100% of the top line but only 14% of the bottom line. </p><p>That is about to get weirder as LINE Digital Frontier has just announced a Tender Offer to take out "minorities" in Ebook Initiative Japan at ¥4750/share. That takeout price is a lifetime high, a 4-bagger since covid-crash lows, 10x book, 550+x EBITDA and one could add more comments that suggest it is a superlative exit for investors. </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/232/841/original/Screenshot+2021-09-30+at+3.58.23+PM.png?1632988893" class="editor-image img-responsive" data-smartkarma-image-id="232841"></figure></section><p>Those things are nice, but....</p><p>But it is likely to tick off some people. I discuss why in more detail below but a summary can be...</p><p>This kind of transaction is yet another situation where the METI Fair M&amp;A Guidelines introduced in summer 2019 have been roundly ignored. There is a lack of good procedure and governance, the valuation is inadequate, the advise provided insufficient, the price manifestly too low, synergies explicitly unaccounted for, no fairness opinion, and the takeover premium is as low as I have seen. </p><p>And other than that Mrs Lincoln, how was the play?</p><p>This situation begs for some cowbell (and, obviously, <a href="https://www.smartkarma.com/insights/japan-needs-more-cowbell" target="_blank" data-smartkarma-citation="insights:41191" rel="noopener">Japan Needs More Cowbell</a>) </p><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/232/870/original/more+cowbell.gif?1632996696" class="editor-image img-responsive" data-smartkarma-image-id="232870"></figure></section><p>Much more below the fold. </p>

Back in April I discussed how those looking at Softbank Corp (9434 JP) on an EV/EBITDA basis would be measuring the company incorrectly. The insight was Softbank Corp - Accounting for The Accounting Is Complicated.Yeah... it was an accounting thing. When you look at Softbank Corp and its consolidated revenues and EBITDA, you were looking at the parent co business of telecoms, then because Softbank Corp owned 50% of a company which owned 65% of Z Holdings (4689 JP) which itself consolidated Ebook Initiative Japan Co Lt (3658 JP) because of the 43% it held, it meant that Softbank Corp consolidated 100% of the top line but only 14% of the bottom line. That is about to get weirder as LINE Digital Frontier has just announced a Tender Offer to take out "minorities" in Ebook Initiative Japan at ¥4750/share. That takeout price is a lifetime high, a 4-bagger since covid-crash lows, 10x book, 550+x EBITDA and one could add more comments that suggest it is a superlative exit for investors. Those things are nice, but....But it is likely to tick off some people. I discuss why in more detail below but a summary can be...This kind of transaction is yet another situation where the METI Fair M&amp;A Guidelines introduced in summer 2019 have been roundly ignored. There is a lack of good procedure and governance, the valuation is inadequate, the advise provided insufficient, the price manifestly too low, synergies explicitly unaccounted for, no fairness opinion, and the takeover premium is as low as I have seen. And other than that Mrs Lincoln, how was the play?This situation begs for some cowbell (and, obviously, Japan Needs More Cowbell) Much more below the fold. 

E-Book Initiative (3658 JP) Tender Offer Takeout - This One Needs Cowbell Too

South Korea

Naver Corp. provides Internet site with web portal services, such as search engine, online game and content development.  The Company also offers marketing service through text and banner advertisement.

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Naver Corp (035420 KS)

Kakao Pay IPO - Comparison with Kakao Bank and an Alternate Look at Valuation

Kakao Pay (KP), one of South Korea’s largest payment and financial services apps, aims to raise up to US$1.3bn in its South Korean IPO. In this...

Sumeet Singh

Kakao Pay IPO - Low-End Still Appear Reasonable but Stock Will More Likely Be Driven by Sentiment

Kakao Pay aims to raise up to US$1.3bn in its South Korean IPO. In this note, we will look at the recent updates and revisit our valuation.

Sumeet Singh

How Is Metaverse Revolutionizing Businesses in Korea? Virtual Humans Rozy & Lucy Are Just a Start

In this insight, we provide 8 examples of how metaverse is revolutionizing businesses in Korea. We also provide a list of Korean companies that are...

Douglas Kim

E-Book Initiative (3658 JP) Tender Offer Takeout - This One Needs Cowbell Too

This takeout of Ebook Initiatives "minorities" is a related party transaction which should have more procedural approval but governance here is a...

Travis Lundy

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