Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Thematic (Sector/Industry)

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices. Companies mentioned this week:<a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a>, <a href="https://www.smartkarma.com/entities/new-oriental-education-tech-grp-adr" target="_blank" data-smartkarma-citation="entities:531:1" rel="noopener">New Oriental Education (EDU US)</a>, <a href="https://www.smartkarma.com/entities/tal-education-group" target="_blank" data-smartkarma-citation="entities:1124:1" rel="noopener">TAL Education (TAL US)</a>, <a href="https://www.smartkarma.com/entities/netease" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a>, <a href="https://www.smartkarma.com/entities/bilibili-inc" target="_blank" data-smartkarma-citation="entities:26793:1" rel="noopener">Bilibili Inc (BILI US)</a>, <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>, <a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a>

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices. Companies mentioned this week:SK Hynix (000660 KS), New Oriental Education (EDU US), TAL Education (TAL US), NetEase (9999 HK), Bilibili Inc (BILI US), Tencent Holdings (700 HK), Baidu (BIDU US)

Global Emerging Markets Weekly: 12 March 2021

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><a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a> plans to raise around US$3bn in its secondary listing in Hong Kong. I have covered most aspects of the deal in my earlier note, <a href="https://www.smartkarma.com/insights/baidu-secondary-listing-early-look-will-be-one-of-the-largest-secondary-listings-this-year" target="_blank" rel="noopener">Baidu Secondary Listing Early Look - Will Be One of the Largest Secondary Listings This Year</a>.</div><div>In this note, I'll only touch upon the updates since my last note.</div>

Baidu (BIDU US) plans to raise around US$3bn in its secondary listing in Hong Kong. I have covered most aspects of the deal in my earlier note, Baidu Secondary Listing Early Look - Will Be One of the Largest Secondary Listings This Year.In this note, I'll only touch upon the updates since my last note.

Baidu Secondary Listing - Smaller than Expected, Doing the Bare Minimum

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

Indonesia e-commerce player Bukalapak, which counts <a href="https://www.smartkarma.com/entities/elang-mahkota-teknologi-tbk" target="_blank" data-smartkarma-citation="entities:7752:1" rel="noopener">Emtek (EMTK IJ)</a> as its largest local backer but also has <a href="https://www.smartkarma.com/entities/microsoft-corp" target="_blank" data-smartkarma-citation="entities:15273:1" rel="noopener">Microsoft Corp (MSFT US)</a>, <a href="https://www.smartkarma.com/entities/standard-chartered-plc" target="_blank" data-smartkarma-citation="entities:193:1" rel="noopener">Standard Chartered (STAN LN)</a>, GIC, and Naver Corp is investors in reportedly in talks to list through a SPAC with a valuation of US$4bn-US$5bn, with a local listing of part of the business in Jakarta first. The timing suggests a target transaction date in 3Q2021.
Bukalapak is the No.4 e-commerce player in Indonesia with 13.5m online sellers and 100m monthly active users, competing with players such as <a href="https://www.smartkarma.com/entities/tokopedia-pt" target="_blank" data-smartkarma-citation="entities:24239:1" rel="noopener">Tokopedia PT (1087142D IJ)</a>, Shopee (<a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US))</a>, and <a href="https://www.smartkarma.com/entities/lazada-group" target="_blank" data-smartkarma-citation="entities:26148:1" rel="noopener">Lazada Group (LAZADA SP)</a> but with an edge providing fulfillment and logistics for around 5.4m warungs (mom&amp;pop stores) in Indonesia.
The company recently saw <a href="https://www.smartkarma.com/entities/standard-chartered-plc" target="_blank" data-smartkarma-citation="entities:193:1" rel="noopener">Standard Chartered (STAN LN)</a> come in as part of a US$200m funding round, with a view of helping to build financial services through the platform and offer to its sellers and customers financial services.
<a href="https://www.smartkarma.com/entities/elang-mahkota-teknologi-tbk" target="_blank" data-smartkarma-citation="entities:7752:1" rel="noopener">Emtek (EMTK IJ)</a> is the most direct beneficiary of a listing for Bukalapak, even through a SPAC, given that it will crystallize a market value for the company. <a href="https://www.smartkarma.com/entities/elang-mahkota-teknologi-tbk" target="_blank" data-smartkarma-citation="entities:7752:1" rel="noopener">Emtek (EMTK IJ)</a>approved a stock split in December and the company has become more liquid and it may look at a further restructuring at a later stage to bring all its digital and media assets under one roof.
The IDX (Indonesia Stock Exchange) is already talking about both allowing SPACs to list in Indonesia but also more importantly to allow main-board listings for high-growth companies that may not be profitable, as well as allowing dual-class shares.

Indonesia e-commerce player Bukalapak, which counts Emtek (EMTK IJ) as its largest local backer but also has Microsoft Corp (MSFT US), Standard Chartered (STAN LN), GIC, and Naver Corp is investors in reportedly in talks to list through a SPAC with a valuation of US$4bn-US$5bn, with a local listing of part of the business in Jakarta first. The timing suggests a target transaction date in 3Q2021.
Bukalapak is the No.4 e-commerce player in Indonesia with 13.5m online sellers and 100m monthly active users, competing with players such as Tokopedia PT (1087142D IJ), Shopee (Sea Ltd (SE US)), and Lazada Group (LAZADA SP) but with an edge providing fulfillment and logistics for around 5.4m warungs (mom&amp;pop stores) in Indonesia.
The company recently saw Standard Chartered (STAN LN) come in as part of a US$200m funding round, with a view of helping to build financial services through the platform and offer to its sellers and customers financial services.
Emtek (EMTK IJ) is the most direct beneficiary of a listing for Bukalapak, even through a SPAC, given that it will crystallize a market value for the company. Emtek (EMTK IJ)approved a stock split in December and the company has become more liquid and it may look at a further restructuring at a later stage to bring all its digital and media assets under one roof.
The IDX (Indonesia Stock Exchange) is already talking about both allowing SPACs to list in Indonesia but also more importantly to allow main-board listings for high-growth companies that may not be profitable, as well as allowing dual-class shares. 

Emtek (EMTK IJ) - Bukalapak Eyeing a SPAC Listing But Jakarta May Be First?

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

Alibaba Group Holding  / Equity Bottom-Up

<ul class="">
<li>The new law impacts Alibaba (BABA) and Tencent (700 HK) loan business.</li>
<li>Alibaba (BABA) is strengthening its “community group purchase” of fresh food.</li>
<li>Trip.com (TCOM) was still in stress in 4Q20.</li>
<li>Baidu (BIDU) set up an automobile joint venture.</li>
</ul>


The new law impacts Alibaba (BABA) and Tencent (700 HK) loan business.
Alibaba (BABA) is strengthening its “community group purchase” of fresh food.
Trip.com (TCOM) was still in stress in 4Q20.
Baidu (BIDU) set up an automobile joint venture.


China Internet Weekly (Mar 8): New Law Limits BABA & Tencent’s Loan Biz, BIDU Starts Car Production.

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.

Autohome Inc (Adr) / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/autohome-inc-adr" target="_blank" data-smartkarma-citation="entities:20234:1" rel="noopener">Autohome Inc (Adr) (ATHM US)</a> has launched a $1 billion secondary listing in Hong Kong. The primary/secondary spilt of the offer is 66.7%/33.3%. The selling shareholder is Yun Chen which is a non-wholly-owned subsidiary of <a href="https://www.smartkarma.com/entities/ping-an-insurance-group-co-of-china" target="_blank" data-smartkarma-citation="entities:24682:1" rel="noopener">Ping An Insurance Group Co Of China (601318 CH)</a>.In <a href="https://www.smartkarma.com/insights/autohome-secondary-listing-motoring-online" target="_blank" data-smartkarma-citation="insights:48751" rel="noopener">Autohome Secondary Listing: Motoring Online</a> outlined our views on Autohome’ fundamentals and valuation. The H shares will be priced on 9 March (Tuesday) and are scheduled for listing on 15 March.  <div class="content-highlight">In this note, we will look at Autohome’s potential HK-ADS premium/(discount). Autohome will price its H-shares at a discount to its ADSs to entice investors to participate in the secondary listing. Overall, we think that Autohome pricing its H-shares around a 2% discount to its ADSs will be reasonable.</div>

Autohome Inc (Adr) (ATHM US) has launched a $1 billion secondary listing in Hong Kong. The primary/secondary spilt of the offer is 66.7%/33.3%. The selling shareholder is Yun Chen which is a non-wholly-owned subsidiary of Ping An Insurance Group Co Of China (601318 CH).In Autohome Secondary Listing: Motoring Online outlined our views on Autohome’ fundamentals and valuation. The H shares will be priced on 9 March (Tuesday) and are scheduled for listing on 15 March.  In this note, we will look at Autohome’s potential HK-ADS premium/(discount). Autohome will price its H-shares at a discount to its ADSs to entice investors to participate in the secondary listing. Overall, we think that Autohome pricing its H-shares around a 2% discount to its ADSs will be reasonable.

Autohome Secondary Listing: HK-ADS Premium/(Discount) Views

China

NetEase, Inc. operates as an leading internet technology company providing online services including content, community, communication, and commerce. The Company develops and operates online games, electronic commerce, internet media, innovative business, and other businesses. NetEase expands its businesses to Japan, North American, and other other international markets.

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NetEase (9999 HK)

Global Emerging Markets Weekly: 12 March 2021

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity...

Wium Malan, CFA

Baidu Secondary Listing - Smaller than Expected, Doing the Bare Minimum

Baidu plans to raise around US$3bn in its secondary listing in Hong Kong. I have covered most aspects of the deal in my earlier note. In this note,...

Sumeet Singh

Emtek (EMTK IJ) - Bukalapak Eyeing a SPAC Listing But Jakarta May Be First?

Emtek is an interesting way to play the burgeoning digital economy in Indonesia and would be a key beneficiary should subsidiary Bukalapak choose...

Angus Mackintosh

China Internet Weekly (Mar 8): New Law Limits BABA & Tencent’s Loan Biz, BIDU Starts Car Production.

The new law impacts Alibaba and Tencent loan business. Alibaba is strengthening its “community group purchase” of fresh food. Trip.com was still in...

Ming Lu

Autohome Secondary Listing: HK-ADS Premium/(Discount) Views

Autohome will price its H-shares at a discount to its ADSs to entice investors to participate in the secondary listing. We think that a 2% discount...

Arun George

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