Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

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

<p>Since 2017 we have written various insights on <a href="https://www.smartkarma.com/entities/vivendi-sa" target="_blank" data-smartkarma-citation="entities:21076:1" rel="noopener">Vivendi SA (VIV FP) and Chairman Bollore.</a></p><p><em><a href="https://www.smartkarma.com/insights/vivendi-coming-ipo-of-universal-music-group-umg-gives-best-exposure-to-growth-in-streaming-music" target="_blank" data-smartkarma-citation="insights:14102" rel="noopener">Vivendi: Coming IPO of Universal Music Group (UMG) Gives Best Exposure to Growth in Streaming Music</a> in October 2017</em></p><p><em><a href="https://www.smartkarma.com/insights/vivendi-50-trade-sale-of-universal-music-will-receive-strong-interest-17-2-2022-is-coming-closer" target="_blank" data-smartkarma-citation="insights:24640" rel="noopener">Vivendi: 50%Trade Sale of Universal Music Will Receive Strong Interest; 17/2/2022 Is Coming Closer</a> in October 2018</em></p><p><em><a href="https://www.smartkarma.com/insights/vivendi-viv-fp-equity-all-about-umg-bet-on-vincent-bollore-to-create-maximum-value-by-17-02-22" target="_blank" data-smartkarma-citation="insights:33243" rel="noopener">Vivendi (VIV FP Equity): All About UMG. Bet on Vincent Bollore to Create Maximum Value by 17/02/22</a> in October 2019</em></p><p>The crown jewel of Vivendi has been UMG and news over the weekend has come out that 60% of UMG will be listed in Amsterdam. Recall, 20% of UMG is already owned by <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> which increased its stake from 10% to 20% in late December 2020. The remaining 20% will stay with Vivendi.</p><p>Vivendi's share price rallied 19.6% on the news and as it is digested <strong>all eyes should now be on 17/02/2022.</strong> This is the official retirement date of Vincent Bollore. As we have predicted over the years (see previous insights) he will want to leave the group on a high note.</p><p>We, therefore, expect more value-enhancing moves for Vivendi shareholders by Vincent Bollore. Vivendi remains a solid large-cap European story with anticipation for UMG's IPO surely building in 2Q and 3Q. The question that has been posed since 2017 remains the same: would you rather own <a href="https://www.smartkarma.com/entities/spotify-technology-sa" target="_blank" data-smartkarma-citation="entities:26772:1" rel="noopener">Spotify Technology SA (SPOT US)</a> (65 billion USD market cap), which is the distributor of music, <em><strong>OR</strong></em> would you rather own the largest music catalog owner?</p><p>Our bet is that once this understanding gets out in the market valuation expectations for UMG will be ramped up aggressively from the minimum 30 billion EUR valuation. Over the coming six months Wall Street banks will be falling over each other to help investors understand the opportunity we have been writing about since 2017. Better late than never.</p>

Since 2017 we have written various insights on Vivendi SA (VIV FP) and Chairman Bollore.Vivendi: Coming IPO of Universal Music Group (UMG) Gives Best Exposure to Growth in Streaming Music in October 2017Vivendi: 50%Trade Sale of Universal Music Will Receive Strong Interest; 17/2/2022 Is Coming Closer in October 2018Vivendi (VIV FP Equity): All About UMG. Bet on Vincent Bollore to Create Maximum Value by 17/02/22 in October 2019The crown jewel of Vivendi has been UMG and news over the weekend has come out that 60% of UMG will be listed in Amsterdam. Recall, 20% of UMG is already owned by Tencent Holdings (700 HK) which increased its stake from 10% to 20% in late December 2020. The remaining 20% will stay with Vivendi.Vivendi's share price rallied 19.6% on the news and as it is digested all eyes should now be on 17/02/2022. This is the official retirement date of Vincent Bollore. As we have predicted over the years (see previous insights) he will want to leave the group on a high note.We, therefore, expect more value-enhancing moves for Vivendi shareholders by Vincent Bollore. Vivendi remains a solid large-cap European story with anticipation for UMG's IPO surely building in 2Q and 3Q. The question that has been posed since 2017 remains the same: would you rather own Spotify Technology SA (SPOT US) (65 billion USD market cap), which is the distributor of music, OR would you rather own the largest music catalog owner?Our bet is that once this understanding gets out in the market valuation expectations for UMG will be ramped up aggressively from the minimum 30 billion EUR valuation. Over the coming six months Wall Street banks will be falling over each other to help investors understand the opportunity we have been writing about since 2017. Better late than never.

Vivendi: IPO of UMG Late '21 to Benefit Tencent; Still Watching 17/02/22 For Final Bollore Fireworks

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

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<p>This week in StubWorld ...</p>
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<p>Ahead of the three-year anniversary lock-up expiring next month, enabling <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a>/<a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> to sell more shares of <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>,  Naspers' look-thru discount of 55% compares with 34% at the time of the Prosus spin-off in September 2019. </p>
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<p>Preceding my comments on Naspers/Prosus/Tencent <em>and </em><a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a>, are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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<p>As always, more below the fold.</p>
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This week in StubWorld ...




Ahead of the three-year anniversary lock-up expiring next month, enabling Prosus (PRX NA)/Naspers (NPN SJ) to sell more shares of Tencent Holdings (700 HK),  Naspers' look-thru discount of 55% compares with 34% at the time of the Prosus spin-off in September 2019. 




Preceding my comments on Naspers/Prosus/Tencent and PCCW Ltd (8 HK), are the weekly setup/unwind tables for Asia-Pacific Holdcos.



These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.



As always, more below the fold.


StubWorld: Naspers' Unsustainable Look-Through

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

Alibaba Group Holding  / Equity Capital Markets

<p>2020 marked our second full year of operations as an Independent Research Company, and our fifth year covering Equity Capital Markets (ECM). While the year started off on a precarious note for ECM, it ended with very strong momentum. Even as IPOs have hogged the limelight in 2020, we actually ended up covering more than twice the number of placements as IPOs. </p><p>We ended 2020 with an accuracy rate of 72.7% across 88 IPOs that we covered and 70.1% across 174 placements. While our placements hit rate improved, our IPO hit rate took a dip from 2019.</p><p>For those not familiar with our coverage, we aim to cover all IPOs and placements with a minimum deal size of US$100m across Asia-Pacific (ex-Korea), including China ADRs.</p>

2020 marked our second full year of operations as an Independent Research Company, and our fifth year covering Equity Capital Markets (ECM). While the year started off on a precarious note for ECM, it ended with very strong momentum. Even as IPOs have hogged the limelight in 2020, we actually ended up covering more than twice the number of placements as IPOs. We ended 2020 with an accuracy rate of 72.7% across 88 IPOs that we covered and 70.1% across 174 placements. While our placements hit rate improved, our IPO hit rate took a dip from 2019.For those not familiar with our coverage, we aim to cover all IPOs and placements with a minimum deal size of US$100m across Asia-Pacific (ex-Korea), including China ADRs.

Aequitas 2020 IPOs and Placements Performance - IPOs in the Limelight but Placements Stole the Show

Event-Driven

<p>This week in StubWorld ...</p>
<p>Tech-giants such as <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> are under the hammer as investors second-guess whether Chinese regulators are targeting only <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> or a wider anti-trust mandate. </p>
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<p>Preceding my comments on <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> / <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> / Tencent are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
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<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
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This week in StubWorld ...
Tech-giants such as Tencent Holdings (700 HK) are under the hammer as investors second-guess whether Chinese regulators are targeting only Alibaba Group (9988 HK) or a wider anti-trust mandate. 


Preceding my comments on Naspers (NPN SJ) / Prosus (PRX NA) / Tencent are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


StubWorld: Tencent Under Pressure From Antitrust Push

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

<p><a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> gives you deeply discounted exposure to one of the highest quality companies listed in the Emerging Markets, <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>. Should you back out the estimated fair values of all investments outside of Prosus’ 31% holding in Tencent from the current Naspers market cap, you are effectively buying exposure to Tencent for only 16.2x 2021F earnings.</p>
<p>Often overlooked, Naspers also gives exposure to a diverse range of online businesses, in differing stages of development, which are likely to structurally benefited from lasting changes to consumer behaviour in the wake of the COVID-19 pandemic.</p>
<p>Further, Management has signalled their focus on meaningfully reducing its discount to listed net asset value by implementing a $5bn share buyback program, during November 2020, which should also support the share price through volatility in the near term. </p>
<p>The key risk to the investment thesis regards the newly proposed Anti-Monopoly Compliance Guidelines for the Platform Economy released by China’s State Administration for Market Regulation (SAMR), a clear signal of tougher antitrust regulations going forward. Tencent should, however, be able to manage through these better than the large eCommerce players.</p>

Naspers (NPN SJ) gives you deeply discounted exposure to one of the highest quality companies listed in the Emerging Markets, Tencent Holdings (700 HK). Should you back out the estimated fair values of all investments outside of Prosus’ 31% holding in Tencent from the current Naspers market cap, you are effectively buying exposure to Tencent for only 16.2x 2021F earnings.
Often overlooked, Naspers also gives exposure to a diverse range of online businesses, in differing stages of development, which are likely to structurally benefited from lasting changes to consumer behaviour in the wake of the COVID-19 pandemic.
Further, Management has signalled their focus on meaningfully reducing its discount to listed net asset value by implementing a $5bn share buyback program, during November 2020, which should also support the share price through volatility in the near term. 
The key risk to the investment thesis regards the newly proposed Anti-Monopoly Compliance Guidelines for the Platform Economy released by China’s State Administration for Market Regulation (SAMR), a clear signal of tougher antitrust regulations going forward. Tencent should, however, be able to manage through these better than the large eCommerce players.

2021 High Conviction: Naspers, Deeply Discounted Exposure to Accelerating Online Sales

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 NA)

Vivendi: IPO of UMG Late '21 to Benefit Tencent; Still Watching 17/02/22 For Final Bollore Fireworks

Vivendi popped 19.6% as plans for a listing of UMG on the Amsterdam exchange were announced. With Vincent Bollore's retirement coming up, expect...

Nicolas Van Broekhoven

StubWorld: Naspers' Unsustainable Look-Through

Long Naspers vs Tencent, is the obvious trade at the current look-through value. IF Naspers+Prosus decides to sell some more Tencent, expect...

David Blennerhassett

Aequitas 2020 IPOs and Placements Performance - IPOs in the Limelight but Placements Stole the Show

2020 marked our second year of operations as an Independent Research Company, and our fifth year covering ECM. In 2020 we had an accuracy rate of...

Sumeet Singh

StubWorld: Tencent Under Pressure From Antitrust Push

Stay long long Naspers vs Tencent. As we approach March, the likelihood that investors realise there could be another large offering increases,...

David Blennerhassett

2021 High Conviction: Naspers, Deeply Discounted Exposure to Accelerating Online Sales

Naspers: Deeply discounted exposure to Tencent, a diverse range of online businesses set to benefit from accelerated online activity post-COVID-19...

Wium Malan, CFA

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