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

<p><strong><em>*Decent Operating Results: </em></strong>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</p><p><strong><em>*Regulatory Risk Is Prevalant:</em></strong> 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. </p>

*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

<p><strong><em>*Strong Momentum As We Head Into Holiday Season: </em></strong>Just as we head into the holiday season, Tencent Holdings’ (700.HK) [Tencent] Afterpay Touch (APT.AU) [Afterpay] provided some strong key metrics in its latest media release;  </p><p><strong><em>*More Transformation To Come:</em></strong> What a magnificent amazing six months this has been for Tencent’s 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</p><p><strong><em>*More Magic Fairy Dust:</em></strong> 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.</p>

*Strong Momentum As We Head Into Holiday Season: Just as we head into the holiday season, Tencent Holdings’ (700.HK) [Tencent] Afterpay Touch (APT.AU) [Afterpay] provided some strong key metrics in its latest media release;  *More Transformation To Come: What a magnificent amazing six months this has been for Tencent’s 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.

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

GoTo Gojek Tokopedia Tbk PT / Equity Bottom-Up

<p>The talk that <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (0967655D SP)</a> and <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ)</a> are in the advanced stage of merger talks seems to be a reiteration of the earlier chatter and certainly some wishful thinking from the <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (0967655D SP)</a> and its shareholders perspective in my view. Certainly, <a href="https://www.smartkarma.com/entities/softbank-corp" target="_blank" data-smartkarma-citation="entities:27445:1" rel="noopener">Softbank Corp (9434 JP)'</a>s Masayoshi Son has made it known that he would like to see a merger happen.</p>
<p>Not a great surprise, given that <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (0967655D SP)</a> is burning more cash than <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ) </a>to stand still. It also operates on a higher cost base with its headquarters in Singapore. There are sure to be Investment Banks in the background pushing for a deal but this does not mean it will happen.</p>
<p>The amazing performance of <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a>, which is up by +880% over the last year and now South East Asia's largest market cap stock at US$90.8bn makes a future listing enticing to realize future value. </p>
<p>The key will be Indonesia, which is after all the region's largest internet market and <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ)</a>'s largest market. Surely we should also consider <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ)</a> shareholders in this? They may not be so willing to relinquish control? </p>
<p>The overriding battle will continue to be between the Chinese behemoths <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> and <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US),</a> which hold stakes in <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ)</a> and <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (0967655D SP)</a> respectively. These two companies are engaged in an ongoing land grab in the digital space in South East Asia, and more especially in Indonesia and it seems unlikely that they would be in cahoots with each other.  </p>
<p>It would seem unlikely that <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ)</a> would relinquish ultimate management control to <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (0967655D SP)</a> given the dominance in its home market. It has also been quietly rebranding in the region, which could spell a more aggressive approach outside Indonesia is in the offing. </p>

The talk that Grab (0967655D SP) and Gojek (1379371D IJ) are in the advanced stage of merger talks seems to be a reiteration of the earlier chatter and certainly some wishful thinking from the Grab (0967655D SP) and its shareholders perspective in my view. Certainly, Softbank Corp (9434 JP)'s Masayoshi Son has made it known that he would like to see a merger happen.
Not a great surprise, given that Grab (0967655D SP) is burning more cash than Gojek (1379371D IJ) to stand still. It also operates on a higher cost base with its headquarters in Singapore. There are sure to be Investment Banks in the background pushing for a deal but this does not mean it will happen.
The amazing performance of Sea Ltd (SE US), which is up by +880% over the last year and now South East Asia's largest market cap stock at US$90.8bn makes a future listing enticing to realize future value. 
The key will be Indonesia, which is after all the region's largest internet market and Gojek (1379371D IJ)'s largest market. Surely we should also consider Gojek (1379371D IJ) shareholders in this? They may not be so willing to relinquish control? 
The overriding battle will continue to be between the Chinese behemoths Tencent Holdings (700 HK) and Alibaba Group (BABA US), which hold stakes in Gojek (1379371D IJ) and Grab (0967655D SP) respectively. These two companies are engaged in an ongoing land grab in the digital space in South East Asia, and more especially in Indonesia and it seems unlikely that they would be in cahoots with each other.  
It would seem unlikely that Gojek (1379371D IJ) would relinquish ultimate management control to Grab (0967655D SP) given the dominance in its home market. It has also been quietly rebranding in the region, which could spell a more aggressive approach outside Indonesia is in the offing. 

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mercadolibre-inc" target="_blank" data-smartkarma-citation="entities:27954:1" rel="noopener">MercadoLibre Inc (MELI US)</a> shares have continued to re-rate, supported by positive 3Q20 results</li>
<li>E-commerce and payments growth rates are accelerating, as MELI is a key LatAm beneficiary of the pandemic shift to e-commerce and digital payments</li>
<li>Consensus estimate revisions are positive, as shown in the chart, and this has powered share price momentum</li>
<li>On valuations, however, we believe that these are stretched; the 2021 revenue multiple is double that of <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a> </li>
<li>Even on our generous assumptions for a simple SOTP valuation, MELI valuations look stretched</li>
<li>In the light of the positive vaccine news, we believe that tech pandemic beneficiaries, including MELI, are exposed to sentiment-driven investor rotation out of high valuation tech names and into value stocks</li>
<li>Risks to our cautious view on MELI include a continued fast pace of e-commerce and digital payments activity in LatAm driving revenue, EBITDA and net profit higher</li>
</ul>



MercadoLibre Inc (MELI US) shares have continued to re-rate, supported by positive 3Q20 results
E-commerce and payments growth rates are accelerating, as MELI is a key LatAm beneficiary of the pandemic shift to e-commerce and digital payments
Consensus estimate revisions are positive, as shown in the chart, and this has powered share price momentum
On valuations, however, we believe that these are stretched; the 2021 revenue multiple is double that of Alibaba Group (BABA US) 
Even on our generous assumptions for a simple SOTP valuation, MELI valuations look stretched
In the light of the positive vaccine news, we believe that tech pandemic beneficiaries, including MELI, are exposed to sentiment-driven investor rotation out of high valuation tech names and into value stocks
Risks to our cautious view on MELI include a continued fast pace of e-commerce and digital payments activity in LatAm driving revenue, EBITDA and net profit higher


Mercado Libre (MELI US): Share Momentum Driven by Fundamentals, but Exposed to Stretched Valuations

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/ant-financial-services-group" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial (1051260D CH)</a> has almost raised around USD35bn via a dual listing on both Hong Kong Exchange and Shanghai STAR board. </p></div><div><p>We have covered various aspects of the deal in our earlier notes, link to which are below.</p></div><div><p>In this note, I'll talk about the latest updates coming out about the STAR market listing.</p></div><div><div><h3>Our previous coverage on Ant Group</h3></div></div><div><ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/ant-financial-ipo-early-thought-what-s-new-about-the-listing-news" target="_blank" rel="noopener">Ant Financial IPO Early Thought: Understand the Fintech Empire, Growth and Risk Factors</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-financial-ipo-early-thought-understand-the-fintech-empire-growth-and-risk-factors" target="_blank" rel="noopener">Ant Financial (蚂蚁金服) IPO Early Thought: What’s New About the Listing News</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-ipo-first-take-no-1-fintech-from-all-angles" target="_blank" rel="noopener">Ant Group (蚂蚁集团) IPO First-Take: No. 1 Fintech from All Angles</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-ipo-numbers-suggest-it-s-more-tech-than-financials" target="_blank" rel="noopener">Ant Group (蚂蚁集团) IPO: Numbers Suggest It’s More Tech than Financials</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-things-to-clarify-questions-to-ask-falling-fees-margins-cash-flow" target="_blank" rel="noopener">Ant Group (蚂蚁集团) Pre-IPO: Things to Clarify/​Questions to Ask - Falling Fees, Margins, Cash Flow</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-dual-listing-makes-early-index-inclusion-tricky" target="_blank" rel="noopener">Ant Group (蚂蚁集团) Pre-IPO: Dual Listing Makes Early Index Inclusion Tricky</a></li>
<li><a href="https://www.smartkarma.com/insights/alipay-s-advantage-over-wechat-pay-in-physical-stores" target="_blank" rel="noopener">AliPay’s Advantage over WeChat Pay in Physical Stores</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-running-neck-and-neck-with-tencent-in-direct-financial-services" target="_blank" rel="noopener">Ant Group (蚂蚁集团) Running Neck and Neck with Tencent in Direct Financial Services</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-impact-assessment-of-the-new-rule-for-financial-holding-companies" target="_blank" rel="noopener">Ant Group (蚂蚁集团) Pre-IPO: Impact Assessment of the New Rule for Financial Holding Companies</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-peer-comparison-payments-baffling-scale-small-tweaks-for-large-profits" target="_blank" rel="noopener">Ant Group Pre-IPO: Peer Comparison - Payments - Baffling Scale, Small Tweaks for Large Profits</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-peer-comparison-credittech-larger-scale-similar-growth-lower-credit-risk" target="_blank" rel="noopener">Ant Group Pre-IPO: Peer Comparison - CreditTech - Larger Scale, Similar Growth, Lower Credit Risk</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-first-stab-at-valuation" target="_blank" rel="noopener">Ant Group Pre-IPO: First Stab at Valuation</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-quick-take-on-ftse-and-msci-s-clearer-guidelines" target="_blank" rel="noopener">Ant Group Pre-IPO: Quick Take on FTSE and MSCI’s Clearer Guidelines</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-deal-structure-phip-updates-short-term-trades" target="_blank" rel="noopener">Ant Group Pre-IPO: Deal Structure, PHIP Updates, Short-Term Trades</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-updated-valuation-it-s-going-higher" target="_blank" rel="noopener">Ant Group Pre-IPO: Updated Valuation. It’s Going Higher.</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-ipo-final-say-strategics-index-impact" target="_blank" rel="noopener">Ant Group IPO: Final Say. Strategics, Index Impact</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-ipo-star-market-trading-stats-a-h-spread" target="_blank" rel="noopener">Ant Group IPO:  STAR Market Trading Stats, A/​H Spread</a></li>
</ul></div>

Ant Financial (1051260D CH) has almost raised around USD35bn via a dual listing on both Hong Kong Exchange and Shanghai STAR board. We have covered various aspects of the deal in our earlier notes, link to which are below.In this note, I'll talk about the latest updates coming out about the STAR market listing.Our previous coverage on Ant Group
Ant Financial IPO Early Thought: Understand the Fintech Empire, Growth and Risk Factors
Ant Financial (蚂蚁金服) IPO Early Thought: What’s New About the Listing News
Ant Group (蚂蚁集团) IPO First-Take: No. 1 Fintech from All Angles
Ant Group (蚂蚁集团) IPO: Numbers Suggest It’s More Tech than Financials
Ant Group (蚂蚁集团) Pre-IPO: Things to Clarify/​Questions to Ask - Falling Fees, Margins, Cash Flow
Ant Group (蚂蚁集团) Pre-IPO: Dual Listing Makes Early Index Inclusion Tricky
AliPay’s Advantage over WeChat Pay in Physical Stores
Ant Group (蚂蚁集团) Running Neck and Neck with Tencent in Direct Financial Services
Ant Group (蚂蚁集团) Pre-IPO: Impact Assessment of the New Rule for Financial Holding Companies
Ant Group Pre-IPO: Peer Comparison - Payments - Baffling Scale, Small Tweaks for Large Profits
Ant Group Pre-IPO: Peer Comparison - CreditTech - Larger Scale, Similar Growth, Lower Credit Risk
Ant Group Pre-IPO: First Stab at Valuation
Ant Group Pre-IPO: Quick Take on FTSE and MSCI’s Clearer Guidelines
Ant Group Pre-IPO: Deal Structure, PHIP Updates, Short-Term Trades
Ant Group Pre-IPO: Updated Valuation. It’s Going Higher.
Ant Group IPO: Final Say. Strategics, Index Impact
Ant Group IPO:  STAR Market Trading Stats, A/​H Spread


Ant Group IPO - Quick Note - Shanghai Suspends STAR Market Listing

United States

PayPal Holdings, Inc. operates as a technology platform company that enables digital and mobile payments on behalf of consumers and merchants. The Company offers online payment solutions. PayPal Holdings serves customers worldwide.

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Paypal Holdings (PYPL US)

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

Tencent Holdings – Father Christmas

TENCENT HOLDINGS: It's May 2020 Stake In Afterpay Keeps Paying Dividends. In It's Latest Release, Afterpay Announced Very Positive Momentum As We...

Thomas J. Monaco

Gojek and Grab Merger Wishful Thinking?

The talk that Grab and Gojek are in the advanced stage of merger talks seems to be a reiteration of the earlier chatter and some wishful thinking...

Angus Mackintosh

Ant Group IPO - Quick Note - Shanghai Suspends STAR Market Listing

Ant Group has almost raised around USD35bn via a dual listing in both Hong Kong and Shanghai. In this note, I'll talk about the latest updates...

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

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

Tencent Holdings – Father Christmas

TENCENT HOLDINGS: It's May 2020 Stake In Afterpay Keeps Paying Dividends. In It's Latest Release, Afterpay Announced Very Positive Momentum As We...

Thomas J. Monaco

Gojek and Grab Merger Wishful Thinking?

The talk that Grab and Gojek are in the advanced stage of merger talks seems to be a reiteration of the earlier chatter and some wishful thinking...

Angus Mackintosh

Mercado Libre (MELI US): Share Momentum Driven by Fundamentals, but Exposed to Stretched Valuations

Mercado Libre is a beneficiary of the pandemic-driven shift to e-commerce and e-payments, but its valuation is stretched, EPS revisions are fading...

Victor Galliano

Ant Group IPO - Quick Note - Shanghai Suspends STAR Market Listing

Ant Group has almost raised around USD35bn via a dual listing in both Hong Kong and Shanghai. In this note, I'll talk about the latest updates...

Sumeet Singh