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 Capital Markets

<ul>
<li>4Paradigm has announced the terms for its IPO. The company plans to raise gross proceeds of $131-144m through issuing 18.4m shares at an indicative price range of HK$55.6-61.16 per shares.</li>
<li>The company’s IPO is timed perfectly when AI adoption is expected to expand on a large scale with the popularity of ChatGPT and other AI applications.</li>
<li>Though we liked <a href="https://www.smartkarma.com/entities/4paradigm" target="_blank" data-smartkarma-citation="entities:34465:1" rel="noopener">4Paradigm (1764934D HK)</a> for its improving financials and growth prospects, our analysis suggests that the IPO is expensive.</li>
</ul>


4Paradigm has announced the terms for its IPO. The company plans to raise gross proceeds of $131-144m through issuing 18.4m shares at an indicative price range of HK$55.6-61.16 per shares.
The company’s IPO is timed perfectly when AI adoption is expected to expand on a large scale with the popularity of ChatGPT and other AI applications.
Though we liked 4Paradigm (1764934D HK) for its improving financials and growth prospects, our analysis suggests that the IPO is expensive.


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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/4paradigm" target="_blank" data-smartkarma-citation="entities:34465:1" rel="noopener">4Paradigm (1764934D HK)</a>, a leader in enterprise artificial intelligence (AI) in China, has launched an HKEx IPO to raise up to US$144 million.</li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/4paradigm-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:112776" rel="noopener">4Paradigm IPO: The Bull Case</a> and <a href="https://www.smartkarma.com/insights/4paradigm-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:112894" rel="noopener">4Paradigm IPO: The Bear Case</a>. </li>
<li>In this note, we discuss forecasts and valuation. Our analysis suggests that the IPO price range of HK$55.60-61.16 per share is unattractive. We would give the IPO a pass.</li>
</ul>



4Paradigm (1764934D HK), a leader in enterprise artificial intelligence (AI) in China, has launched an HKEx IPO to raise up to US$144 million.
We previously discussed the IPO in 4Paradigm IPO: The Bull Case and 4Paradigm IPO: The Bear Case. 
In this note, we discuss forecasts and valuation. Our analysis suggests that the IPO price range of HK$55.60-61.16 per share is unattractive. We would give the IPO a pass.


<ul>
<li>
<a href="https://www.smartkarma.com/entities/4paradigm" target="_blank" data-smartkarma-citation="entities:34465:1" rel="noopener">4Paradigm (1764934D HK)</a>, a leader in enterprise artificial intelligence (AI) in China, is pre-marketing a US$150-200 million HKEx IPO.</li>
<li>In <a href="https://www.smartkarma.com/insights/4paradigm-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:112776" rel="noopener">4Paradigm IPO: The Bull Case</a>, we highlighted the key elements of the bull case. In this note, we outline the bear case.</li>
<li>The bear case rests on Sage Platform’s rapid slowdown, high customer concentration risk, recent gross margin pressure, FCF burn, rising cash collection cycle and BIS entity list designation. </li>
</ul>



4Paradigm (1764934D HK), a leader in enterprise artificial intelligence (AI) in China, is pre-marketing a US$150-200 million HKEx IPO.
In 4Paradigm IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
The bear case rests on Sage Platform’s rapid slowdown, high customer concentration risk, recent gross margin pressure, FCF burn, rising cash collection cycle and BIS entity list designation. 


<ul>
<li>
<a href="https://www.smartkarma.com/entities/4paradigm" target="_blank" data-smartkarma-citation="entities:34465:1" rel="noopener">4Paradigm (1764934D HK)</a>, a leader in enterprise artificial intelligence (AI) in China, is pre-marketing a US$150-200 million HKEx IPO.  </li>
<li>4Paradigm was the largest player by revenue in China’s platform-centric decision-making AI market with a market share of 22.6% in 2022, according to CIC. </li>
<li>The bull case rests on the success in increasing key account customer numbers, net dollar expansion rates, improving revenue visibility, strong growth in application development services and reducing loss margin.</li>
</ul>



4Paradigm (1764934D HK), a leader in enterprise artificial intelligence (AI) in China, is pre-marketing a US$150-200 million HKEx IPO.  
4Paradigm was the largest player by revenue in China’s platform-centric decision-making AI market with a market share of 22.6% in 2022, according to CIC. 
The bull case rests on the success in increasing key account customer numbers, net dollar expansion rates, improving revenue visibility, strong growth in application development services and reducing loss margin.


Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of September 8th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We highlight flows for ICBC, CNOOC, CCB, HKEx, China Petroleum &amp; Chemical.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of September 8th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We highlight flows for ICBC, CNOOC, CCB, HKEx, China Petroleum &amp; Chemical.


Hong Kong Connect Flows (Sep 8th): ICBC, CNOOC, CCB, HKEx, China Petroleum & Chemical

China

Qingdao AInnovation Technology Group is an AI solutions provider offering full-stack AI-based products and solutions. According to Frost & Sullivan (F&S), the firm was the third largest AI technology driven solution provider in the enterprise AI solutions market in China in terms of 2020 revenue.

Qingdao Ainnovation Technology Group (2121 HK)

Price Gauge
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Qingdao Ainnovation Technology Group (2121 HK)

4Paradigm IPO: Forecasts and Valuation

4Paradigm's IPO is timed perfectly for the expected expansion of AI adoption. Though we liked the company for improving financials and growth...

Shifara Samsudeen, ACMA, CGMA

4Paradigm IPO: Valuation Insights

4Paradigm has launched an HKEx IPO to raise up to US$144m. Our analysis suggests that the IPO price range is unattractive. We would give the IPO a...

Arun George

4Paradigm IPO: The Bear Case

The bear case rests on Sage Platform’s rapid slowdown, high customer concentration risk, recent gross margin pressure, FCF burn, rising cash...

Arun George

4Paradigm IPO: The Bull Case

The bull case rests on the success in increasing key customer numbers, net dollar expansion rates, improving visibility, strong growth in...

Arun George

Hong Kong Connect Flows (Sep 8th): ICBC, CNOOC, CCB, HKEx, China Petroleum & Chemical

We analyzed the Hong Kong Connect Scheme for last week and highlight flows for ICBC, CNOOC, CCB, HKEx, China Petroleum & Chemical.

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

4Paradigm IPO: Forecasts and Valuation

​4Paradigm's IPO is timed perfectly for the expected expansion of AI adoption. Though we liked the company for improving financials and growth...

Shifara Samsudeen, ACMA, CGMA

4Paradigm IPO: Valuation Insights

4Paradigm has launched an HKEx IPO to raise up to US$144m. Our analysis suggests that the IPO price range is unattractive. We would give the IPO a...

Arun George

4Paradigm IPO: The Bear Case

The bear case rests on Sage Platform’s rapid slowdown, high customer concentration risk, recent gross margin pressure, FCF burn, rising cash...

Arun George

4Paradigm IPO: The Bull Case

The bull case rests on the success in increasing key customer numbers, net dollar expansion rates, improving visibility, strong growth in...

Arun George

Hong Kong Connect Flows (Sep 8th): ICBC, CNOOC, CCB, HKEx, China Petroleum & Chemical

We analyzed the Hong Kong Connect Scheme for last week and highlight flows for ICBC, CNOOC, CCB, HKEx, China Petroleum & Chemical.

Ke Yan, CFA, FRM

4Paradigm's IPO is timed perfectly for the expected expansion of AI adoption. Though we liked the company for improving financials and growth...