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>Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.</li>
<li>There was a marked pickup in IPO activity with a number of smaller deals, along with two large deals being launched.</li>
<li>There were no major placements last week. In addition, Prosus single handedly took out two prospective large placements.</li>
</ul>


Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
There was a marked pickup in IPO activity with a number of smaller deals, along with two large deals being launched.
There were no major placements last week. In addition, Prosus single handedly took out two prospective large placements.


ECM Weekly (3rd Jul 2022) - Tianqi, Thai Life, Prosus/Naspers, Tencent, SEA, Soosan, SoCar, Carsales

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>Tencent’s share price is down 6.5% over the last five days as largest shareholder Prosus sais that it would sell down Tencent shares to fund the buyback of Prosus/Naspers shares.</li>
<li>Though Chinese regulators removed the ban on new game approval in April this year, none of Tencent’s new game titles received approvals in over the last two months.</li>
<li>Tencent’s 1Q2022 earnings were weak and we expect 2Q2022E earnings to further decelerate with resurgence of Covid cases in China alongside weak macroeconomy.</li>
</ul>


Tencent’s share price is down 6.5% over the last five days as largest shareholder Prosus sais that it would sell down Tencent shares to fund the buyback of Prosus/Naspers shares.
Though Chinese regulators removed the ban on new game approval in April this year, none of Tencent’s new game titles received approvals in over the last two months.
Tencent’s 1Q2022 earnings were weak and we expect 2Q2022E earnings to further decelerate with resurgence of Covid cases in China alongside weak macroeconomy.


Tencent: End of Another Quarter with No New Game Approval and Prosus Selling

Event-Driven

<ul>
<li>Tencent sold US$3bn worth of SEA shares in Jan 22. The rest of its stake was locked up for six months.</li>
<li>The initial stake sale by Tencent didn’t go down too well and the stock is now trading over 63% below the deal price.</li>
<li>In this note, we will talk about the lock-up dynamics and recent updates.</li>
</ul>


Tencent sold US$3bn worth of SEA shares in Jan 22. The rest of its stake was locked up for six months.
The initial stake sale by Tencent didn’t go down too well and the stock is now trading over 63% below the deal price.
In this note, we will talk about the lock-up dynamics and recent updates.


SEA Lock-Up - Tencent Is once Again About to Be Free to Trim Its US$8bn Stake

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<ul>
<li>South African allocations have fallen to record lows among active GEM investors.  Over the last 6-months, weights have fallen by 0.77% to just 2.82% after fund outflows of $2.78bn.</li>
<li>Naspers was the driver following the Prosus exchange offer.  28 of the 126 pre-existing holders of Naspers sold down their positions , totalling $2.45bn in combined outflows</li>
<li>Strip out Naspers and South Africa looks to be bottoming out.  Selected stocks are starting to attract interest from active EM managers, led by FirstRand, MTN and Capitec.</li>
</ul>


South African allocations have fallen to record lows among active GEM investors.  Over the last 6-months, weights have fallen by 0.77% to just 2.82% after fund outflows of $2.78bn.
Naspers was the driver following the Prosus exchange offer.  28 of the 126 pre-existing holders of Naspers sold down their positions , totalling $2.45bn in combined outflows
Strip out Naspers and South Africa looks to be bottoming out.  Selected stocks are starting to attract interest from active EM managers, led by FirstRand, MTN and Capitec.


Naspers Drives South Africa Positioning to All-Time Lows, but Bright Spots Emerge

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<p>This summer saw the <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> Offer for <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> complete in early August, with Prosus now owning just under 50% of Naspers and Naspers owning ~38% of Prosus in what <a href="https://www.smartkarma.com/profiles/david-blennerhassett" target="_blank" data-smartkarma-citation="accounts:840" rel="noopener">David Blennerhassett</a> called the new <a href="https://www.smartkarma.com/insights/naspers-prosus-south-african-keswicks" target="_blank" data-smartkarma-citation="insights:51401" rel="noopener"><em>South African "Keswicks"</em></a> (a reference to the circular relationship of the Jardines complex, recently unwound, where for years/decades it just went on as the Keswick family thought was in their own interests.</p>
<p>Pre-Offer results, I reco'd going long the Naspers-Prosus spread where it was trading ex-Offer at 670bp or so in <a href="https://www.smartkarma.com/insights/naspers-deal-done-flex-participation-and-pro-ration-misunderstandings-and-index-changes-galore" target="_blank" data-smartkarma-citation="insights:56011" rel="noopener">Naspers Deal Done - Flex Participation and Pro-Ration, Misunderstandings, and INDEX CHANGES GALORE!</a> </p>
<p>Just after the offer results were out and the initial index changes were made, the spread between Naspers and Prosus widened significantly to near (and briefly above) 20% against Offer Terms. I recommended unwinding the spread-widening trade and putting on a spread-narrowing trade in <a href="https://www.smartkarma.com/insights/naspers-prosus-initial-index-changes-done-now-to-reverse-the-trade" target="_blank" data-smartkarma-citation="insights:56256" rel="noopener">Naspers/Prosus Initial Index Changes Done, Now To Reverse the Trade</a>.</p>
<section class="figure">
<section class="figure">
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/232/375/original/Screenshot+2021-09-28+at+6.27.38+PM.png?1632826281" class="editor-image img-responsive" data-smartkarma-image-id="232375"></figure>
<p></p>
</section>
</section>
<p><em>So what next? </em></p>

This summer saw the Prosus (PRX NA) Offer for Naspers (NPN SJ) complete in early August, with Prosus now owning just under 50% of Naspers and Naspers owning ~38% of Prosus in what David Blennerhassett called the new South African "Keswicks" (a reference to the circular relationship of the Jardines complex, recently unwound, where for years/decades it just went on as the Keswick family thought was in their own interests.
Pre-Offer results, I reco'd going long the Naspers-Prosus spread where it was trading ex-Offer at 670bp or so in Naspers Deal Done - Flex Participation and Pro-Ration, Misunderstandings, and INDEX CHANGES GALORE! 
Just after the offer results were out and the initial index changes were made, the spread between Naspers and Prosus widened significantly to near (and briefly above) 20% against Offer Terms. I recommended unwinding the spread-widening trade and putting on a spread-narrowing trade in Naspers/Prosus Initial Index Changes Done, Now To Reverse the Trade.






So what next? 

China

Prosus N.V. provides internet based services. The Company focuses on investments in internet, digital media, e-commerce retailing, and consumer internet companies. Prosus serves customers worldwide.

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Prosus NV (PRX SJ)

ECM Weekly (3rd Jul 2022) - Tianqi, Thai Life, Prosus/Naspers, Tencent, SEA, Soosan, SoCar, Carsales

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.

Sumeet Singh

Tencent: End of Another Quarter with No New Game Approval and Prosus Selling

The second quarter of 2022 has not been any great for Tencent as none of its new game titles were included in the approved list while Prosus...

Shifara Samsudeen, ACMA, CGMA

SEA Lock-Up - Tencent Is once Again About to Be Free to Trim Its US$8bn Stake

Tencent sold US$3bn worth of SEA shares in Jan 22. The rest of its stake was locked up for six months, which will soon be over.

Sumeet Singh

Naspers Drives South Africa Positioning to All-Time Lows, but Bright Spots Emerge

Heavy selling in Naspers has driven South Africa exposure to record lows following the Prosus exchange offer. EM active managers turn instead to...

Steven Holden

Naspers/Prosus Spread - What Next?

The Naspers/Prosus reorg/Offer/Crossholding Structure was completed in early August. Index changes in mid-August, buyback program on Prosus started...

Travis Lundy

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