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

SenseTime Group  / Equity Capital Markets

<ul>
<li>SenseTime is Asia’s largest AI software company and China’s largest computer vision software provider. The company has filed for an IPO to list on the Hong Kong Stock Exchange. </li>
<li>The “Smart City” and “Smart Business” segments together account for over 80% of revenues. The two segments have grown strongly over the past few years.   </li>
<li>China’s vision software industry has strong entry barriers and there is potential for SenseTime’s gross margins to improve. However, the company is yet to generate any operating profits.</li>
</ul>


SenseTime is Asia’s largest AI software company and China’s largest computer vision software provider. The company has filed for an IPO to list on the Hong Kong Stock Exchange. 
The “Smart City” and “Smart Business” segments together account for over 80% of revenues. The two segments have grown strongly over the past few years.   
China’s vision software industry has strong entry barriers and there is potential for SenseTime’s gross margins to improve. However, the company is yet to generate any operating profits.


SenseTime Group IPO: Strong Top Line Growth but Profitability Remains a Concern

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/sensetime-group" target="_blank" data-smartkarma-citation="entities:34319:1" rel="noopener">SenseTime Group (1475539D HK)</a> is the largest AI software company in Asia as measured by revenue in 2020. It has launched an HKEx IPO to raise up to US$767 million.  </li>
<li>In <a href="https://www.smartkarma.com/insights/sensetime-ipo-initiation-big-brother" target="_blank" data-smartkarma-citation="insights:62104" rel="noopener">SenseTime IPO Initiation: Big Brother</a>, we stated that the negatives outweigh the positives and we would give the IPO a pass. </li>
<li>Our valuation analysis suggests that the IPO price is unattractive. We would give the IPO a pass. Pricing is expected on 10 December with a listing on 17 December.</li>
</ul>



SenseTime Group (1475539D HK) is the largest AI software company in Asia as measured by revenue in 2020. It has launched an HKEx IPO to raise up to US$767 million.  
In SenseTime IPO Initiation: Big Brother, we stated that the negatives outweigh the positives and we would give the IPO a pass. 
Our valuation analysis suggests that the IPO price is unattractive. We would give the IPO a pass. Pricing is expected on 10 December with a listing on 17 December.


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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sensetime-group" target="_blank" data-smartkarma-citation="entities:34319:1" rel="noopener">SenseTime Group (1475539D HK)</a> (STG) is looking to raise about US$768m in its Hong Kong IPO.</li>
<li>We think that STG’s fast growth masks the volatile nature of STG’s business. 50% of principal pre-IPO investors are not locked up and they are sitting on neat gains.</li>
<li>Based on our assumptions, we think STG should be valued around US$10.5bn based on the low-end of the peer multiple range.</li>
</ul>



SenseTime Group (1475539D HK) (STG) is looking to raise about US$768m in its Hong Kong IPO.
We think that STG’s fast growth masks the volatile nature of STG’s business. 50% of principal pre-IPO investors are not locked up and they are sitting on neat gains.
Based on our assumptions, we think STG should be valued around US$10.5bn based on the low-end of the peer multiple range.


SenseTime Group (商汤集团) IPO - Regulatory Risks + Overhang + Poor Sentiment

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sensetime-group" target="_blank" data-smartkarma-citation="entities:34319:1" rel="noopener">SenseTime Group (1475539D HK)</a> is the largest AI software company in Asia as measured by revenue in 2020. It is set to launch an HKEx IPO to raise US$770 million.  </li>
<li>The fundamentals are mixed as high growth is accompanied by high customer concentration, an uncertain path to profitability, cash burn and moral concerns around “ethnic profiling software”. </li>
<li>Overall, we believe the negatives outweigh the positives and we would give the IPO a pass. </li>
</ul>



SenseTime Group (1475539D HK) is the largest AI software company in Asia as measured by revenue in 2020. It is set to launch an HKEx IPO to raise US$770 million.  
The fundamentals are mixed as high growth is accompanied by high customer concentration, an uncertain path to profitability, cash burn and moral concerns around “ethnic profiling software”. 
Overall, we believe the negatives outweigh the positives and we would give the IPO a pass. 


<ul>
<li>
<a href="https://www.smartkarma.com/entities/sensetime-group" target="_blank" data-smartkarma-citation="entities:34319:1" rel="noopener">SenseTime Group (1475539D HK)</a> is looking to raise about US$2bn in its upcoming Hong Kong IPO. </li>
<li>STG was the market leading computer vision software provider in China in various industries for FY2020. But, the company has been losing market share over the past few years.</li>
<li>We think STG should be valued somewhere between US$11.1 - US$15bn.</li>
</ul>



SenseTime Group (1475539D HK) is looking to raise about US$2bn in its upcoming Hong Kong IPO. 
STG was the market leading computer vision software provider in China in various industries for FY2020. But, the company has been losing market share over the past few years.
We think STG should be valued somewhere between US$11.1 - US$15bn.


SenseTime Group (商汤集团) Pre-IPO - Tough Sell

China

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)

SenseTime Group IPO: Strong Top Line Growth but Profitability Remains a Concern

China’s vision software industry has strong entry barriers and there is potential for SenseTime’s gross margins to improve. However, the company is...

Shifara Samsudeen, ACMA, CGMA

SenseTime IPO: Valuation Insights

Our valuation analysis suggests that the IPO price is unattractive. We would give the IPO a pass. Pricing is expected on 10 December with a listing...

Arun George

SenseTime Group (商汤集团) IPO - Regulatory Risks + Overhang + Poor Sentiment

We think that STG’s fast growth masks the volatile nature of STG’s business. 50% of principal pre-IPO investors are not locked up and they are...

Sumeet Singh

SenseTime IPO Initiation: Big Brother

SenseTime is set to launch an HKEx IPO to raise US$770 million. Overall, we believe the negatives outweigh the positives and we would give the IPO...

Arun George

SenseTime Group (商汤集团) Pre-IPO - Tough Sell

SenseTime Group (1475539D HK) is looking to raise about US$2bn in its upcoming Hong Kong IPO. We think STG should be valued somewhere between...

Sumeet Singh

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