Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Capital Markets

Unisound AI Technology / Equity Capital Markets

<ul>
<li>Unisound AI Technology, a Beijing-based AI unicorn, filed to go public in Hong Kong. I used a diverse peer group of domestic AI companies to come up with IPO valuation. </li>
<li>From a peer group perspective, I arrived at an IPO valuation close to ~RMB12b (or ~$1.7B), using a ~15x EV/CY22 Revenue to my 2023 revenue estimate of RMB780m (+30% y/y).</li>
<li>However, I believe SaaS valuation multiples may appear rich for the stock, keeping in mind non-recurring revenue and the high hardware cost in the total cost of sales and services.</li>
</ul>


Unisound AI Technology, a Beijing-based AI unicorn, filed to go public in Hong Kong. I used a diverse peer group of domestic AI companies to come up with IPO valuation. 
From a peer group perspective, I arrived at an IPO valuation close to ~RMB12b (or ~$1.7B), using a ~15x EV/CY22 Revenue to my 2023 revenue estimate of RMB780m (+30% y/y).
However, I believe SaaS valuation multiples may appear rich for the stock, keeping in mind non-recurring revenue and the high hardware cost in the total cost of sales and services.


Unisound AI Technology IPO Valuation Analysis: SaaS Valuation Multiples Appear Rich For The Stock

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Macroeconomics

<ul><li>China’s top decision-making body on Monday highlighted the need to boost domestic demand and for policies to prop up the country’s private economy.</li><li>The July Politburo meeting is closely watched for signs of measures Beijing will implement to shore up growth, as the country’s post-pandemic economic recovery has lost momentum over the past few months.</li><li>“At the moment, the economy is facing new difficulties and challenges — mainly insufficient domestic demand, difficulties in the operations of some enterprises, risks and hidden dangers in key areas, and a complex and severe external environment,” stated the readout of the meeting chaired by President Xi Jinping.</li></ul>

China’s top decision-making body on Monday highlighted the need to boost domestic demand and for policies to prop up the country’s private economy.The July Politburo meeting is closely watched for signs of measures Beijing will implement to shore up growth, as the country’s post-pandemic economic recovery has lost momentum over the past few months.“At the moment, the economy is facing new difficulties and challenges — mainly insufficient domestic demand, difficulties in the operations of some enterprises, risks and hidden dangers in key areas, and a complex and severe external environment,” stated the readout of the meeting chaired by President Xi Jinping.

China Politburo Targets Boosting Domestic Demand, Private Sector

<ul>
<li>Founded in 2012, Unisound AI Technology is a Beijing-based pioneer in Artificial General Intelligence (AGI). The company offers easy-to-deploy AI products and solutions in China. </li>
<li>Unisound AI Technology seeks to raise capital for R&amp;D activities, international expansion, and general working capital purposes. The company chose CICC and Haitong to tap capital markets with HK IPO. </li>
<li>I like growing brand recognition, in-house 60B-parameter LLM UniGPT, high growth in the Smart Life segment, and the opportunity to sell self-developed proprietary AI chips in China.</li>
</ul>


Founded in 2012, Unisound AI Technology is a Beijing-based pioneer in Artificial General Intelligence (AGI). The company offers easy-to-deploy AI products and solutions in China. 
Unisound AI Technology seeks to raise capital for R&amp;D activities, international expansion, and general working capital purposes. The company chose CICC and Haitong to tap capital markets with HK IPO. 
I like growing brand recognition, in-house 60B-parameter LLM UniGPT, high growth in the Smart Life segment, and the opportunity to sell self-developed proprietary AI chips in China.


Unisound AI Technology IPO: Speech Recognition AI Unicorn And Developer of LLM UniGPT

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>Hang Seng has announced the conclusions of the market consultation. Primary-listed foreign stocks will be eligible for inclusion in the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">HSI INDEX</a> and <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">HSTECH INDEX</a> from the December rebalance.</li>
<li>The coming week has the rebalances for the <a href="https://www.smartkarma.com/entities/nifty-index" target="_blank" data-smartkarma-citation="entities:23617:1" rel="noopener">NIFTY Index</a>, <a href="https://www.smartkarma.com/entities/nse-nifty-next-50-index" target="_blank" data-smartkarma-citation="entities:36053:1" rel="noopener">Nifty Next 50 Index</a>, <a href="https://www.smartkarma.com/entities/nse-nifty-bank-index" target="_blank" data-smartkarma-citation="entities:26811:1" rel="noopener">Nifty Bank Index</a> and <a href="https://www.smartkarma.com/entities/s-p-bse-sensex-index" target="_blank" data-smartkarma-citation="entities:31494:1" rel="noopener">SENSEX Index</a> as a result of the <a href="https://www.smartkarma.com/entities/housing-development-finance" target="_blank" data-smartkarma-citation="entities:252:1" rel="noopener">HDFC Limited</a>/ <a href="https://www.smartkarma.com/entities/hdfc-bank-ltd-4b6b7a92-9087-468d-9dbe-ab169e77f014" target="_blank" data-smartkarma-citation="entities:558:1" rel="noopener">HDFC Bank</a> merger.</li>
<li>There were inflows to <a href="https://www.smartkarma.com/entities/tracker-fund-of-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:29257:1" rel="noopener">Tracker Fund of Hong Kong Ltd (2800 HK)</a> and outflows from <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index-etf" target="_blank" data-smartkarma-citation="entities:25:1" rel="noopener">Hang Seng H Share Index ETF (2828 HK)</a> during the week.</li>
</ul>


Hang Seng has announced the conclusions of the market consultation. Primary-listed foreign stocks will be eligible for inclusion in the HSI INDEX and HSTECH INDEX from the December rebalance.
The coming week has the rebalances for the NIFTY Index, Nifty Next 50 Index, Nifty Bank Index and SENSEX Index as a result of the HDFC Limited/ HDFC Bank merger.
There were inflows to Tracker Fund of Hong Kong Ltd (2800 HK) and outflows from Hang Seng H Share Index ETF (2828 HK) during the week.


Index Rebalance & ETF Flow Recap: HSCI, HSCEI, HSI, CSI300, CSI500, SSE50, HDFC Bank, Sensex

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.

<ul>
<li>Mobvoi is a leading AI company with generative AI and voice interaction technologies at the core of its business. The company has filed for an IPO on the HKEx.</li>
<li>Unlike a lot of the AI start-ups, Mobvoi has already begun commercialising its products and services and the company has started generating operating profits in 2022.</li>
<li>The advent of ChatGPT and Midjourney have created a hype for AI. Mobvoi has taken the right decision to go public at the right time.</li>
</ul>


Mobvoi is a leading AI company with generative AI and voice interaction technologies at the core of its business. The company has filed for an IPO on the HKEx.
Unlike a lot of the AI start-ups, Mobvoi has already begun commercialising its products and services and the company has started generating operating profits in 2022.
The advent of ChatGPT and Midjourney have created a hype for AI. Mobvoi has taken the right decision to go public at the right time.


Mobvoi IPO: Right Decision at the Right Time

China

Kingsoft Corporation Ltd. develops and markets computer software.  The Company develops role-playing computer games and security, word processing, and spreadsheet software.

Hundsun Technologies Inc develops application software for security firms, commercial banks, fund management firms, and other industries.  The Company also sells computer hardware and provides system integration services.

Yonyou Network Technology Co., Ltd. develops and markets enterprise-wide business applications software, including financial, web-based, management, and security development software. The Company also offers training programs.

Kingdee International Software Group Company Limited, through its subsidiaries, develops and sells enterprise management software, e-commerce application software and middleware software.  The Company also provides internet-based services and setting up e-commerce platforms for enterprises. In addition, Kingdee provides solution consulting and technical support services.

Beijing Venustech Inc. provides a variety of information security products, information security services and information security solutions.  The Company's products and services are intrusion detection systems, intrusion prevention systems, firewalls, real-time monitoring and security management certification training services.

Jiangsu Hoperun Software Company Limited provides software outsourcing services for professional fields. The Company's main products include supply chain management software, intelligent terminal embedded software, and smart grid IT software outsourcing services.

Glodon Company Limited develops application softwares for basic construction industry. The Company's products include construction engineering cost management software and project cost management software. The Company also provides related training and consulting services.

China National Software & Service Co., Ltd designs, develops, and integrates application software used for the taxation, railway telecommunication, military, commercial aviation, and financial industries.  The Company also designs Chinasoft Linux operating system and develops language conversion software to support Chinese, English, and Japanese

Kingnet Network Co. Ltd. is a technology company involved in the development of social, browser, online games and mobile gaming.

YGSOFT Inc. develops financial and management software products for electricity industry. The company also provides computer software and hardware system integration and technology consulting services.

Technology One Limited is an Australian-based company that is engaged in the development, marketing, sales, implementation, support, and distribution of financial management and enterprise software solutions. The Company has operations in New Zealand, the United Kingdom, the South Pacific, and Malaysia.

International Games System Co., Ltd. plans, designs, develops, manufactures, and markets software and hardware for arcade games, PC games, and Internet on-line games.

Varonis Systems, Inc. designs and develops data security software solutions. The Company offers data management systems to organize, manage, and protect unstructured and semi-structured data such as documents, spreadsheets, presentations, media files, and other business data. Varonis Systems operates worldwide.

Blackbaud, Inc. provides software and related services designed specifically for non-profit organizations. The Company's products and services enable non-profit organizations to increase donations, reduce fundraising costs, improve communication with constituents, manage their finances, and optimize internal operations.

Qualys, Inc. provides information technology security risk and compliance management solutions. The Company offers products for vulnerability management, policy compliance, web application scanning, malware detection, and associated security products. Qualys conducts business in the United States.

CommVault Systems, Inc. provides data management software applications and related services. The Company develops, markets, and sells a suite of data management software applications designed to protect and manage data throughout its lifecycle.

Trend Micro Incorporated develops and markets anti-virus computer software and internet security software.  The Company also sells its products in the United States, Europe, and Asia.

Tata Elxsi Limited manufactures computers and workstations besides providing system design, software development and integration services. The Group supplies its products to a number of industries, including the automotive, metals, consumer products, finance, IT & Communications, energy, chemicals, engineering, pharmaceuticals, entertainment and agro industries.

ACI Worldwide, Inc. develops, markets, and supports software products for the global electronics funds transfer market.  The Company's products are used to process transactions involving credit cards, debit cards, smartcards, home banking services, checks, and automated clearing and settlement.

SQUARE ENIX HOLDINGS CO., LTD. develops and sells entertainment software for home video game consoles including Dragon Quest and Final Fantasy series. The Company also publishes books such as informational guide books for its game software, and comic magazines and books.  Additionally, Square Enix sells character goods and stationery items from its software products.

SenseTime Group Inc. offers information technology services. The Company develops artificial intelligence software products, computer vision software products, and other products. SenseTime Group provides its services throughout China.

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SenseTime Group (20 HK)

Unisound AI Technology IPO Valuation Analysis: SaaS Valuation Multiples Appear Rich For The Stock

I have a favorable view of the upcoming Unisound AI Technology IPO. However, valuation matters and investors should refrain from paying rich SaaS...

Andrei Zakharov

China Politburo Targets Boosting Domestic Demand, Private Sector

China’s top decision-making body on Monday highlighted the need to boost domestic demand and for policies to prop up the country’s private...

Caixin Global

Unisound AI Technology IPO: Speech Recognition AI Unicorn And Developer of LLM UniGPT

A promising AI unicorn has filed to go public in HK. Beijing-based Unisound AI Technology will benefit by expanding into new industry verticals...

Andrei Zakharov

Index Rebalance & ETF Flow Recap: HSCI, HSCEI, HSI, CSI300, CSI500, SSE50, HDFC Bank, Sensex

This recap highlights Insights covering Asian index rebalances (announcements/ forecasts/ IPO Fast Entry/ M&A driven changes). We also highlight...

Brian Freitas

Mobvoi IPO: Right Decision at the Right Time

Mobvoi's decision to go public is at the right time as the invent of ChatGPT has created a hype in the market. Unlike many AI startups, Mobvoi is...

Shifara Samsudeen, ACMA, CGMA

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