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.

Forensic Accounting

<p><a href="https://www.smartkarma.com/entities/seek-ltd" target="_blank" data-smartkarma-citation="entities:676:1" rel="noopener">Seek Ltd (SEK AU)</a>  operates an international portfolio of employment and education businesses across Australia, New Zealand, China, Hong Kong, South-East Asia, Brazil and Mexico. The company operates an online marketplace that offers employment classifieds in Australia and internationally. In addition, Seek also offers advice in relation to education courses.</p><p>The company has been accused by Blue Orca Capital (<a href="https://static1.squarespace.com/static/5a81b554be42d6b09e19fc09/t/5f99f9ba94399006bdb5f02c/1603926464878/Blue+Orca+Short+SEEK+Ltd+%28ASX+SEK%29.pdf" target="_blank" rel="noopener">https://static1.squarespace.com/static/5a81b554be42d6b09e19fc09/t/5f99f9ba94399006bdb5f02c/1603926464878/Blue+Orca+Short+SEEK+Ltd+%28ASX+SEK%29.pdf</a>) and some of the accusations laid out by Blue Orca include fake job postings on the company’s website, misrepresentation of its market share and inflated profits.</p><div class="content-highlight"><p><em>We think Zhaopin’s platform is rotten, which is devastating for Seek’s prospects. Seek has historically paid a dividend, giving the false impression that its business produces healthy profits and cash flows. But these payments have been largely funded by debt. A serial acquirer, Seek has repeatedly tapped the capital markets to fund acquisitions, raising its Net Debt-to-reported EBITDA to 3.2x. By our calculation, Seek’s true leverage is much higher</em></p></div><p>In this insight, we attempt to examine some of these allegations and have assessed the merits of those claims using the company’s financials.</p>

Seek Ltd (SEK AU)  operates an international portfolio of employment and education businesses across Australia, New Zealand, China, Hong Kong, South-East Asia, Brazil and Mexico. The company operates an online marketplace that offers employment classifieds in Australia and internationally. In addition, Seek also offers advice in relation to education courses.The company has been accused by Blue Orca Capital (https://static1.squarespace.com/static/5a81b554be42d6b09e19fc09/t/5f99f9ba94399006bdb5f02c/1603926464878/Blue+Orca+Short+SEEK+Ltd+%28ASX+SEK%29.pdf) and some of the accusations laid out by Blue Orca include fake job postings on the company’s website, misrepresentation of its market share and inflated profits.We think Zhaopin’s platform is rotten, which is devastating for Seek’s prospects. Seek has historically paid a dividend, giving the false impression that its business produces healthy profits and cash flows. But these payments have been largely funded by debt. A serial acquirer, Seek has repeatedly tapped the capital markets to fund acquisitions, raising its Net Debt-to-reported EBITDA to 3.2x. By our calculation, Seek’s true leverage is much higherIn this insight, we attempt to examine some of these allegations and have assessed the merits of those claims using the company’s financials.

Seek Ltd: Some of the Outrageous Claims by Blue Orca Look Irrefutable

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>Education Australia Ltd, plans to raise around US$153m (A$225m) via selling a 5.1% stake in <a href="https://www.smartkarma.com/entities/idp-education-ltd" target="_blank" data-smartkarma-citation="entities:1098:1" rel="noopener">IDP Education (IEL AU)</a>. </p>
<p>The company itself had raised a similar amount in Apr 2020, which I covered in <a href="https://www.smartkarma.com/insights/idp-education-placement-testing-times-but-it-will-pass-probably-with-flying-colours" target="_blank" rel="noopener">IDP Education Placement: Testing Times but It Will Pass, Probably with Flying Colours.</a></p>
<p>That deal did exceptionally well. This one won't nearly be as good.</p>
</div><div><p>We have followed the company since it listed in Nov 2015. You can find our coverage for the listing here, <a href="https://www.smartkarma.com/insights/ipo-preview-growing-market-and-strategic-co-owner-combined-with-a-global-brand-means-its-set-to-fly" target="_blank" rel="noopener">IPO Preview:Growing market and strategic co-owner combined with a global brand means its set to fly, </a>  <a href="https://www.smartkarma.com/insights/quick-note-global-brand-at-an-attractive-price" target="_blank" rel="noopener">Quick Note: Global brand at an attractive price</a> and <a href="https://www.smartkarma.com/insights/idp-education-first-test-them-then-place-them" target="_blank" rel="noopener">IDP Education: First Test Them, Then Place Them.</a></p></div>


Education Australia Ltd, plans to raise around US$153m (A$225m) via selling a 5.1% stake in IDP Education (IEL AU). 
The company itself had raised a similar amount in Apr 2020, which I covered in IDP Education Placement: Testing Times but It Will Pass, Probably with Flying Colours.
That deal did exceptionally well. This one won't nearly be as good.
We have followed the company since it listed in Nov 2015. You can find our coverage for the listing here, IPO Preview:Growing market and strategic co-owner combined with a global brand means its set to fly,   Quick Note: Global brand at an attractive price and IDP Education: First Test Them, Then Place Them.

IDP Education Placement - Last Deal Was a Smash Hit, This One Won't Be as Lucky

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.

Renrui Human Resources / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/renrui-human-resources-techn" target="_blank" data-smartkarma-citation="entities:28134:1" rel="noopener">Renrui Human Resources (6919 HK)</a> is the largest company operating in China’s flexible staffing services market by revenue in 2018, accounting for a 2.5% market share. Renrui has launched a Hong Kong IPO to raise net proceeds of HK$971 million ($124 million) at the mid-point of the IPO price range.</p><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/renrui-hr-technology-ipo-initiation-not-the-perfect-candidate" target="_blank" rel="noopener">our initiation note</a>, we stated that on the surface, Renrui appears to be heading in the right direction as the 1H19 results demonstrated robust growth, margin progression and cash generation. However, a closer look reveals several areas of caution. Our valuation analysis shows that the IPO price range is unattractive. Consequently, we would not participate in the IPO. </p></div>

Renrui Human Resources (6919 HK) is the largest company operating in China’s flexible staffing services market by revenue in 2018, accounting for a 2.5% market share. Renrui has launched a Hong Kong IPO to raise net proceeds of HK$971 million ($124 million) at the mid-point of the IPO price range.In our initiation note, we stated that on the surface, Renrui appears to be heading in the right direction as the 1H19 results demonstrated robust growth, margin progression and cash generation. However, a closer look reveals several areas of caution. Our valuation analysis shows that the IPO price range is unattractive. Consequently, we would not participate in the IPO. 

Renrui HR Technology IPO: Valuation Unappealing

<p><a href="https://www.smartkarma.com/entities/renrui-human-resources-techn" target="_blank" data-smartkarma-citation="entities:28134:1" rel="noopener">Renrui Human Resources (6919 HK)</a> is the largest company operating in China’s flexible staffing services market by revenue in 2018, accounting for a 2.5% market share. Renrui has launched a Hong Kong IPO to raise net proceeds of HK$971 million ($124 million) at the mid-point of the IPO price range.</p><div class="content-highlight"><p>On the surface, Renrui appears to be heading in the right direction as the 1H19 results demonstrated robust growth, margin progression and cash generation. However, a closer look reveals several areas of caution. On balance, we are inclined to err on the side of caution by sitting out this IPO. </p></div>

Renrui Human Resources (6919 HK) is the largest company operating in China’s flexible staffing services market by revenue in 2018, accounting for a 2.5% market share. Renrui has launched a Hong Kong IPO to raise net proceeds of HK$971 million ($124 million) at the mid-point of the IPO price range.On the surface, Renrui appears to be heading in the right direction as the 1H19 results demonstrated robust growth, margin progression and cash generation. However, a closer look reveals several areas of caution. On balance, we are inclined to err on the side of caution by sitting out this IPO. 

Renrui HR Technology IPO Initiation: Not the Perfect Candidate

<p><a href="https://www.smartkarma.com/entities/propertyguru-ltd" target="_blank" data-smartkarma-citation="entities:28149:1" rel="noopener">PropertyGuru (PGU AH)</a> is an online property classifieds marketplace with presence in five countries across South East Asia – Singapore, Vietnam, Malaysia, Thailand and Indonesia. PropertyGuru's retail offer period opened today and will run to 22 October. The final price will be announced on 24 October.</p><p>In <a href="https://www.smartkarma.com/insights/propertyguru-ipo-initiation-rose-tinted-glasses-required" target="_blank" rel="noopener">our initiation note</a>, we stated that while PropertyGuru is a good company, we believe that the forecasts are based on a bull scenario, leaving little room for any setbacks. <a href="https://www.smartkarma.com/insights/propertyguru-ipo-valuation-guru-at-frothy-valuations" target="_blank" rel="noopener">Our valuation note</a> stated that the proposed IPO price range is unattractive. </p><div class="content-highlight"><p>We dug deeper into website traffic data to get a more balanced perspective on PropertyGuru’s competitive positioning in Singapore – the core geography, which accounts for most of the profit. Our analysis of website traffic data points to three areas of caution for the core Singapore business.</p></div>

PropertyGuru (PGU AH) is an online property classifieds marketplace with presence in five countries across South East Asia – Singapore, Vietnam, Malaysia, Thailand and Indonesia. PropertyGuru's retail offer period opened today and will run to 22 October. The final price will be announced on 24 October.In our initiation note, we stated that while PropertyGuru is a good company, we believe that the forecasts are based on a bull scenario, leaving little room for any setbacks. Our valuation note stated that the proposed IPO price range is unattractive. We dug deeper into website traffic data to get a more balanced perspective on PropertyGuru’s competitive positioning in Singapore – the core geography, which accounts for most of the profit. Our analysis of website traffic data points to three areas of caution for the core Singapore business.

PropertyGuru IPO: Website Traffic Analysis Undermines Premium Rating

Australia

Seek Limited operates an Internet website.  The Company offers online employment advertisements and online training in Australia and New Zealand, and offers online employment advertisements in the United Kingdom targeted at Australian and New Zealand job seekers.

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Seek Ltd (SEK AU)

Seek Ltd: Some of the Outrageous Claims by Blue Orca Look Irrefutable

Blue Orca Capital has published a short-sell report on Seek Ltd. We attempt to examine some of these allegations and have assessed the merits of...

Shifara Samsudeen, ACMA, CGMA

IDP Education Placement - Last Deal Was a Smash Hit, This One Won't Be as Lucky

Education Australia Ltd, plans to raise around US$153m (A$225m) via selling a 5.1% stake in IDP Education (IEL AU). The company itself had raised...

Sumeet Singh

Renrui HR Technology IPO: Valuation Unappealing

Renrui Human Resources (6919 HK) is the largest company operating in China’s flexible staffing services market by revenue in 2018, accounting for a...

Arun George

Renrui HR Technology IPO Initiation: Not the Perfect Candidate

Renrui Human Resources (6919 HK) is the largest company operating in China’s flexible staffing services market by revenue in 2018, accounting for a...

Arun George

PropertyGuru IPO: Website Traffic Analysis Undermines Premium Rating

PropertyGuru (PGU AH) is an online property classifieds marketplace with presence in five countries across South East Asia – Singapore, Vietnam,...

Arun George

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