TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Equity Bottom-Up

Palantir Technologies  / Equity Bottom-Up

<p>Palantir’s earnings call was a master class in obfuscation.</p><p><strong>Since 4Q20 earnings on February 16, 2021, five C-Suite executives from Palantir have sold $250MM (!!) in stock, with CEO Alex Karp selling $137MM in just the past 3 months. Luckily for them, Cathie Wood and ARK has bought 20M shares for $480MM! </strong></p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</p></div>

Palantir’s earnings call was a master class in obfuscation.Since 4Q20 earnings on February 16, 2021, five C-Suite executives from Palantir have sold $250MM (!!) in stock, with CEO Alex Karp selling $137MM in just the past 3 months. Luckily for them, Cathie Wood and ARK has bought 20M shares for $480MM! Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

Palantir 1Q21 Earnings: ARK’s Buying What They’re Selling

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

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

<p><a href="https://www.smartkarma.com/entities/linklogis" target="_blank" data-smartkarma-citation="entities:31126:1" rel="noopener">Linklogis (9959 HK)</a> had a rather subdued debut compared to other recent SaaS IPOs. The company’s share price appreciated by 9.9% on 9<sup>th</sup> April 2021, compared to an average first day gain of 133% for recent SaaS IPOs <a href="https://www.smartkarma.com/entities/ming-yuan-cloud-group" target="_blank" data-smartkarma-citation="entities:29268:1" rel="noopener">Ming Yuan Cloud Group (909 HK)</a>, <a href="https://www.smartkarma.com/entities/snowflake-inc" target="_blank" data-smartkarma-citation="entities:29254:1" rel="noopener">Snowflake Inc (SNOW US)</a>, and <a href="https://www.smartkarma.com/entities/cloopen-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:31315:1" rel="noopener">Cloopen Group Holding Ltd (RAAS US)</a>.</p>
<p>Over the last couple of weeks, the share price moved up by another HK$ 3.70 to HK$ 23.00 per share, up 31% from the IPO price.</p>
<p>In <a href="https://www.smartkarma.com/insights/linklogis-ipo-first-day-trading" target="_blank" rel="noopener">Linklogis IPO: First Day Trading</a>, we predicted that shares could open trading near HK$ 26.0 per share. We also said that we would be looking to sell at or near the open if shares open trading near HK$ 25.0-26.0 range.</p>
<p>After a two-week delay, it appears that Linklogis is slowly reaching our target exit range.</p>
<p>We like the company’s long-term prospects, but at 20.2x FY+2 EV/Sales with 35% revenue CAGR, the company is fundamentally overvalued.</p>

Linklogis (9959 HK) had a rather subdued debut compared to other recent SaaS IPOs. The company’s share price appreciated by 9.9% on 9th April 2021, compared to an average first day gain of 133% for recent SaaS IPOs Ming Yuan Cloud Group (909 HK), Snowflake Inc (SNOW US), and Cloopen Group Holding Ltd (RAAS US).
Over the last couple of weeks, the share price moved up by another HK$ 3.70 to HK$ 23.00 per share, up 31% from the IPO price.
In Linklogis IPO: First Day Trading, we predicted that shares could open trading near HK$ 26.0 per share. We also said that we would be looking to sell at or near the open if shares open trading near HK$ 25.0-26.0 range.
After a two-week delay, it appears that Linklogis is slowly reaching our target exit range.
We like the company’s long-term prospects, but at 20.2x FY+2 EV/Sales with 35% revenue CAGR, the company is fundamentally overvalued.

Linklogis Post-IPO Trading & Valuation: Time to Get Out

<p><a href="https://www.smartkarma.com/entities/linklogis" target="_blank" data-smartkarma-citation="entities:31126:1" rel="noopener">Linklogis (9959 HK)</a> priced its IPO at HK$17.58 per share, 2% above the midpoint of the offer price range despite generating significant interest from both retail and institutional investors. The Hong Kong offer was oversubscribed 98.46x while the international offer was oversubscribed by 14.83x.</p><p>At 14.1x FY+2 EV/Sales with 35% revenue CAGR, Linklogis does not appear overly cheap compared peer multiples. However, the first day performance of recent SaaS IPOs like <a href="https://www.smartkarma.com/entities/ming-yuan-cloud-group" target="_blank" data-smartkarma-citation="entities:29268:1" rel="noopener">Ming Yuan Cloud Group (909 HK)</a>, <a href="https://www.smartkarma.com/entities/snowflake-inc" target="_blank" data-smartkarma-citation="entities:29254:1" rel="noopener">Snowflake Inc (SNOW US)</a> and <a href="https://www.smartkarma.com/entities/cloopen-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:31315:1" rel="noopener">Cloopen Group Holding Ltd (RAAS US)</a> suggests that Linklogis could open reasonably strong on trading debut.</p>

Linklogis (9959 HK) priced its IPO at HK$17.58 per share, 2% above the midpoint of the offer price range despite generating significant interest from both retail and institutional investors. The Hong Kong offer was oversubscribed 98.46x while the international offer was oversubscribed by 14.83x.At 14.1x FY+2 EV/Sales with 35% revenue CAGR, Linklogis does not appear overly cheap compared peer multiples. However, the first day performance of recent SaaS IPOs like Ming Yuan Cloud Group (909 HK), Snowflake Inc (SNOW US) and Cloopen Group Holding Ltd (RAAS US) suggests that Linklogis could open reasonably strong on trading debut.

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.

<div><p><a href="https://www.smartkarma.com/entities/bairong" target="_blank" data-smartkarma-citation="entities:31486:1" rel="noopener">Bairong (1569395D CH)</a> is a leading independent AI-powered technology platform in China serving the financial services industry. Biarong will commence trading on Wednesday, 31 March. Bairong priced its IPO at HK$31.80 and <a href="https://inews.hket.com/article/2920642/%E3%80%90%E6%96%B0%E8%82%A1IPO%E3%80%91%E7%99%BE%E8%9E%8D%E9%9B%B2%E5%89%B56608%E6%9A%97%E7%9B%A4%E6%BD%9B%E6%B0%B4%E3%80%80%E4%B8%80%E6%89%8B%E5%B8%B3%E9%9D%A2%E8%9D%951400%E5%85%83?mtc=40001&amp;srkw=IPO%E6%9C%80%E5%BF%AB%E6%9C%80%E9%BD%8A" target="_blank" rel="noopener">opened around -9% lower</a> at HK$29 in the grey market. The poor grey market performance is perhaps unsurprisingly in light of the choppy market conditions and declining market sentiment on Chinese tech names. </p></div><div><p>In <a href="https://www.smartkarma.com/insights/bairong-ipo-initiation-creditworthy" target="_blank" data-smartkarma-citation="insights:49249" rel="noopener">Bairong IPO Initiation: Creditworthy</a>, we opined that the good 4Q20 revenue growth exit rate points to recovery. We noted that Bairong has the potential to combine solid growth with profitability and cash generation. We concluded that Bairong is worth a closer look. In <a href="https://www.smartkarma.com/insights/bairong-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:49418" rel="noopener">Bairong IPO: Valuation Insights</a>, we noted that the IPO price range is reasonable.</p></div><div><div><div class="content-highlight"><p>Updating for the final IPO net raise, our base-case DCF derived price target of HK$35.79 per share. Our DCF sensitivity analysis shows that the IPO price remains reasonable and the grey market factors in conservative market share and margin forecasts. For investors with a longer-term horizon, we think that the grey market price represents good value. </p></div></div></div>

Bairong (1569395D CH) is a leading independent AI-powered technology platform in China serving the financial services industry. Biarong will commence trading on Wednesday, 31 March. Bairong priced its IPO at HK$31.80 and opened around -9% lower at HK$29 in the grey market. The poor grey market performance is perhaps unsurprisingly in light of the choppy market conditions and declining market sentiment on Chinese tech names. In Bairong IPO Initiation: Creditworthy, we opined that the good 4Q20 revenue growth exit rate points to recovery. We noted that Bairong has the potential to combine solid growth with profitability and cash generation. We concluded that Bairong is worth a closer look. In Bairong IPO: Valuation Insights, we noted that the IPO price range is reasonable.Updating for the final IPO net raise, our base-case DCF derived price target of HK$35.79 per share. Our DCF sensitivity analysis shows that the IPO price remains reasonable and the grey market factors in conservative market share and margin forecasts. For investors with a longer-term horizon, we think that the grey market price represents good value. 

<p><a href="https://www.smartkarma.com/entities/linklogis" target="_blank" data-smartkarma-citation="entities:31126:1" rel="noopener">Linklogis (LINK HK)</a> announced the indicative price range to its IPO on 26<sup>th</sup> March 2021 at HK$16.28-18.28 per share, which implies a market cap and EV range of HK$36.9-41.4bn and HK$29.0-32.7bn respectively.</p><p>Linklogis generated healthy revenue growth (63.9% CAGR through 2018-20) and the OP margin is already strong. Moreover, the OP margin trend is still on a improving trajectory. (OPM: 14.3%, 20.0% and 31.1% in 2018, 2019 and 2020 respectively).</p><p>While value investors would never describe 28.2-31.8x Trailing EV/Sales and 90.7-102.0x Trailing EV/OP as reasonable, the fact remains that compared to where most SaaS IPO EV/Sales multiples ended on trading debut, Linklogis IPO valuation multiples are still on the low side , especially considering that Linklogis allows access to both SaaS and Singapore Digital Banking trends.</p>

Linklogis (LINK HK) announced the indicative price range to its IPO on 26th March 2021 at HK$16.28-18.28 per share, which implies a market cap and EV range of HK$36.9-41.4bn and HK$29.0-32.7bn respectively.Linklogis generated healthy revenue growth (63.9% CAGR through 2018-20) and the OP margin is already strong. Moreover, the OP margin trend is still on a improving trajectory. (OPM: 14.3%, 20.0% and 31.1% in 2018, 2019 and 2020 respectively).While value investors would never describe 28.2-31.8x Trailing EV/Sales and 90.7-102.0x Trailing EV/OP as reasonable, the fact remains that compared to where most SaaS IPO EV/Sales multiples ended on trading debut, Linklogis IPO valuation multiples are still on the low side , especially considering that Linklogis allows access to both SaaS and Singapore Digital Banking trends.

Linklogis IPO Valuation: Offer Multiples Are Not Cheap, Still Room For Upside on Trading Debut

United States

Snowflake Inc. provides software solutions. The Company develops database architecture, data warehouses, query optimization, and parallelization solutions. Snowflake serves customers worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Snowflake (SNOW US)

Palantir 1Q21 Earnings: ARK’s Buying What They’re Selling

Since 4Q20 C-Suite executives from Palantir have sold $250MM (!!) in stock, with CEO Alex Karp selling $137MM in just the past 3 months. Luckily...

Aaron Gabin

Linklogis Post-IPO Trading & Valuation: Time to Get Out

After a two-week delay, it appears that Linklogis is slowly reaching our target exit range. We like the company’s long-term prospects, but at 20.2x...

Oshadhi Kumarasiri

Linklogis IPO: First Day Trading

At 14.1x FY+2 EV/Sales with 35% revenue CAGR, Linklogis does not appear overly cheap compared peer multiples. However, the first day performance of...

Oshadhi Kumarasiri

Bairong IPO: Trading Debut

Bairong priced its IPO at HK$31.80 and opened around -9% lower at HK$29 in the grey market. Our DCF sensitivity analysis shows that the grey market...

Arun George

Linklogis IPO Valuation: Offer Multiples Are Not Cheap, Still Room For Upside on Trading Debut

While value investors would never describe 28.2-31.8x Trailing EV/Sales as reasonable, compared to where most SaaS IPO EV/Sales multiples ended on...

Oshadhi Kumarasiri

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)