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

<ul>
<li>Alipay aims to raise around US$386m via selling around 3.3% of outstanding shares of Kakao Pay.</li>
<li>The stock more than doubled on listing, providing one of the best first day returns in 2021. However, its performance since then hasn’t been all that great.</li>
<li>In this note, we will talk about the deal dynamics and run the deal through our ECM framework.</li>
</ul>


Alipay aims to raise around US$386m via selling around 3.3% of outstanding shares of Kakao Pay.
The stock more than doubled on listing, providing one of the best first day returns in 2021. However, its performance since then hasn’t been all that great.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.


Kakao Pay Placement - Discount Is Enticing, That's It

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.

Equity Bottom-Up

<ul>
<li>Our negative recommendations from December – especially Paytm – worked better than our positive ones, given 1Q22 market conditions; we see much value in payment companies but we remain selective</li>
<li>Based on our screens, we continue to favour Mastercard in the megacaps, we stick with PagSeguro and Getnet, adding Nexi which looks very oversold, despite its fundamental headwinds</li>
<li>We take Paytm off the sell list, but we remain negative on DLocal on its very demanding valuations, and we add Kakao Pay to the negative list</li>
</ul>


Our negative recommendations from December – especially Paytm – worked better than our positive ones, given 1Q22 market conditions; we see much value in payment companies but we remain selective
Based on our screens, we continue to favour Mastercard in the megacaps, we stick with PagSeguro and Getnet, adding Nexi which looks very oversold, despite its fundamental headwinds
We take Paytm off the sell list, but we remain negative on DLocal on its very demanding valuations, and we add Kakao Pay to the negative list


Payment Companies – Thoughts on Screen Snapshots 1Q22

Event-Driven

<ul>
<li>On 13th Apr 2021, Grab (0967655D SP) announced that it plans to go public in the US in partnership with Altimeter Growth Corp (AGC US) at an equity valuation of US$39.6bn.</li>
<li>The merger and listing will be completed on 2nd Dec 2021.</li>
<li>In this note, we will talk about valuations and the lock-up release schedule.</li>
</ul>


On 13th Apr 2021, Grab (0967655D SP) announced that it plans to go public in the US in partnership with Altimeter Growth Corp (AGC US) at an equity valuation of US$39.6bn.
The merger and listing will be completed on 2nd Dec 2021.
In this note, we will talk about valuations and the lock-up release schedule.


Grab SPAC Listing - Thoughts on Valuation, Lock-Up Release

Telco/Internet specialist

Kirk Boodry

Redex Research

<p>By year-end we expect there will be two newly minted public fintech companies in Asia as IPOs for Kakao Pay (August) and PayTM (Q4-ish) move ahead. These are both potential comparables for Softbank Group’s PayPay of which Z Holdings is the leading shareholder. Comparatively, proposed valuations for Kakao Pay ($7-11bn) and PayTM ($24-25bn) are much higher but these are also later stage businesses with established track records and offer some insight into what PayPay can turn into over time. We currently value PayPay at its carry value of $500mn but as monetization starts, we expect management aspirations for a unicorn valuation can be reached. This report includes forecasts updated for Q4 results, guidance, and the acquisition of Yahoo trademark rights from Verizon.</p>

By year-end we expect there will be two newly minted public fintech companies in Asia as IPOs for Kakao Pay (August) and PayTM (Q4-ish) move ahead. These are both potential comparables for Softbank Group’s PayPay of which Z Holdings is the leading shareholder. Comparatively, proposed valuations for Kakao Pay ($7-11bn) and PayTM ($24-25bn) are much higher but these are also later stage businesses with established track records and offer some insight into what PayPay can turn into over time. We currently value PayPay at its carry value of $500mn but as monetization starts, we expect management aspirations for a unicorn valuation can be reached. This report includes forecasts updated for Q4 results, guidance, and the acquisition of Yahoo trademark rights from Verizon.

Z Holdings (Buy) - Asian Fintech App IPOs Highlight Potential PayPay Upside

<ul>
<li>We update Klarna’s and Stripe’s IPO valuations based on recent share transactions; Indian payments company Pine Labs is also reported to be looking to IPO</li>
<li>Our 2Q24 recommended shares performance was very mixed, with it being a mainly challenging quarter for long investors in payment companies</li>
<li>We retain Visa as a core holding and also keep PagSeguro and Shift4 as buys, replacing PayPal with European value play Nexi; we keep our sell rating on Affirm</li>
</ul>


We update Klarna’s and Stripe’s IPO valuations based on recent share transactions; Indian payments company Pine Labs is also reported to be looking to IPO
Our 2Q24 recommended shares performance was very mixed, with it being a mainly challenging quarter for long investors in payment companies
We retain Visa as a core holding and also keep PagSeguro and Shift4 as buys, replacing PayPal with European value play Nexi; we keep our sell rating on Affirm


Payment Companies – Updated Sector Overview and Potential IPOs

India

One 97 Communications Limited provides payment solutions. The Company provides online services such as hotel booking, top ups, data processing, games, mobile content, and bill payments. One 97 Communications Limited serves customers worldwide.

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Paytm (PAYTM IN)

Kakao Pay Placement - Discount Is Enticing, That's It

Alipay aims to raise around US$386m via selling around 3.3% of outstanding shares of Kakao Pay. This is the first selldown by Alipay which owns...

Sumeet Singh

Payment Companies – Thoughts on Screen Snapshots 1Q22

We favour Mastercard, PagSeguro and Getnet, adding Nexi which looks very oversold; we take Paytm off the sell list, but stay negative on DLocal due...

Victor Galliano

Grab SPAC Listing - Thoughts on Valuation, Lock-Up Release

On 13th Apr 21, Grab announced that it plans to go public in the US in partnership with Altimeter Growth Corp at an equity val of US$39.6bn. In...

Sumeet Singh

Z Holdings (Buy) - Asian Fintech App IPOs Highlight Potential PayPay Upside

Upcoming IPOs for two Asian fintech companies provide some insight on what Z Holdings PayPay can become once it starts to monetize its business....

Kirk Boodry

Payment Companies – Updated Sector Overview and Potential IPOs

Mixed 2Q24 shares performance, challenging for long investors in payment companies. Visa retained as core holding, with buys PagSeguro and Shift4;...

Victor Galliano

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