Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Thematic (Sector/Industry)

<p>This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.  </p><p><strong><em>Companies mentioned this week:</em></strong></p><p><a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ)</a>, <a href="https://www.smartkarma.com/entities/tokopedia-pt" target="_blank" data-smartkarma-citation="entities:24239:1" rel="noopener">Tokopedia PT (1087142D IJ)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a>, <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/bytedance-technology" target="_blank" data-smartkarma-citation="entities:27936:1" rel="noopener">ByteDance (1460967D CH)</a></p>

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.  Companies mentioned this week:Gojek (1379371D IJ), Tokopedia PT (1087142D IJ), JD.com Inc. (9618 HK), JD Logistics (2618 HK), Alibaba Group (9988 HK), ByteDance (1460967D CH)

Global Emerging Markets Weekly: 21 May 2021

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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.

<p>Softbank announced a reshuffling of its board of directors today with Ronald D. Fisher, Simon Segars and Yuko Kawamoto resigning and Kentaro Kawabe, Keiko Erikawa and Kenneth Siegel being newly proposed.</p>

Softbank announced a reshuffling of its board of directors today with Ronald D. Fisher, Simon Segars and Yuko Kawamoto resigning and Kentaro Kawabe, Keiko Erikawa and Kenneth Siegel being newly proposed.

Softbank – Governance Director Out the Door

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

<p>Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.</p><ul><li><a href='#lucror-entity-18561'>JSW Steel Ltd</a></li><li><a href='#lucror-entity-315'>Softbank Group</a></li><li><a href='#lucror-entity-20934'>Tata Steel Ltd</a></li></ul>

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.JSW Steel LtdSoftbank GroupTata Steel Ltd

Morning Views Asia: JSW Steel Ltd, Softbank Group, Tata Steel Ltd

Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

<p>In the run-up to results last week, we said that tech weakness could push Softbank closer to a buyback renewal but it is tech gains that highlight market disappointment. A return to tech on Friday boosted Vision Fund’s public portfolio by $5.2bn (¥571bn equal to ¥158/share @48% VF equity and 1.7bn S/O) but SBG shares are down today as the discount has widened to 34% from 32% on Friday and 21% a week ago. In recent years, shares have traded in the range of 40-50% of the underlying public value until the Vision Fund IPO parade kicked into higher gear even as an unprecedented buyback plan provided additional support. With tech weakness, a return to that level seems more likely and the Friday valuation rebound underscores the importance of returns to shareholders too.</p>

In the run-up to results last week, we said that tech weakness could push Softbank closer to a buyback renewal but it is tech gains that highlight market disappointment. A return to tech on Friday boosted Vision Fund’s public portfolio by $5.2bn (¥571bn equal to ¥158/share @48% VF equity and 1.7bn S/O) but SBG shares are down today as the discount has widened to 34% from 32% on Friday and 21% a week ago. In recent years, shares have traded in the range of 40-50% of the underlying public value until the Vision Fund IPO parade kicked into higher gear even as an unprecedented buyback plan provided additional support. With tech weakness, a return to that level seems more likely and the Friday valuation rebound underscores the importance of returns to shareholders too.

Softbank Group - The Market Is Sending a Message

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.

Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/jd-logistics" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a> is the largest player in China’s integrated supply chain logistics services market, with a 2.2% revenue market share in 2019, according to CIC. JD Logistics was founded with the formation of <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a>’s in-house logistics department in 2007.</p></div><div><p>At the proposed IPO price range of HK$39.36-43.36 per share, JD Logistics will have a market cap of HK$239,766-264,132 million ($30.9-34.0 billion). At the mid-point of the IPO price range, the net proceeds are HK$24,713 million ($3.2 billion). Seven cornerstone investors will purchase $1.5 billion worth of the offer shares (47.16% of the offer shares at the mid-point of the IPO price range). The cornerstone investors are <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a>, Temasek, Tiger Global, China Structural Reform Fund, Blackstone,  Matthews Funds and Oaktree. </p></div><div><p>In <a href="https://www.smartkarma.com/insights/jd-logistics-ipo-initiation-the-flow-of-things" target="_blank" data-smartkarma-citation="insights:48279" rel="noopener">JD Logistics IPO Initiation: The Flow of Things</a>, we stated that JD Logistics is an indirect play on the shift of some customer behaviour permanently to online shopping, particularly in fast-moving consumer goods. We concluded that JD Logistics fundamentals are attractive and it remains well-placed to address consumers demand faster and more flexible supply chain logistics services.</p></div><div><p>In <a href="https://www.smartkarma.com/insights/jd-logistics-ipo-prioritizing-market-share-gains-over-margins" target="_blank" data-smartkarma-citation="insights:50976" rel="noopener">JD Logistics IPO: Prioritizing Market Share Gains over Margins</a>,  we noted that the PHIP which discloses the 2020 results and recent developments underscore the positives which are strong growth, rising margin and cash generation. However, the outlook is mixed as JD Logistics cautions that it will pursue market share gains at the cost of profitability over the medium term. We opined that JD Logistics has the right ingredients to ride out the industry’s current price-competitive dynamics and deliver good shareholder returns over the medium term. </p></div><div><div><div class="content-highlight"><p>Overall, based on valuation analysis, we think that the IPO price range is attractive, particularly in the context of JD Logistics' positioning and higher than peers forecasted growth. </p></div></div></div>

JD Logistics (2618 HK) is the largest player in China’s integrated supply chain logistics services market, with a 2.2% revenue market share in 2019, according to CIC. JD Logistics was founded with the formation of JD.com Inc (ADR) (JD US)’s in-house logistics department in 2007.At the proposed IPO price range of HK$39.36-43.36 per share, JD Logistics will have a market cap of HK$239,766-264,132 million ($30.9-34.0 billion). At the mid-point of the IPO price range, the net proceeds are HK$24,713 million ($3.2 billion). Seven cornerstone investors will purchase $1.5 billion worth of the offer shares (47.16% of the offer shares at the mid-point of the IPO price range). The cornerstone investors are Softbank Group (9984 JP), Temasek, Tiger Global, China Structural Reform Fund, Blackstone,  Matthews Funds and Oaktree. In JD Logistics IPO Initiation: The Flow of Things, we stated that JD Logistics is an indirect play on the shift of some customer behaviour permanently to online shopping, particularly in fast-moving consumer goods. We concluded that JD Logistics fundamentals are attractive and it remains well-placed to address consumers demand faster and more flexible supply chain logistics services.In JD Logistics IPO: Prioritizing Market Share Gains over Margins,  we noted that the PHIP which discloses the 2020 results and recent developments underscore the positives which are strong growth, rising margin and cash generation. However, the outlook is mixed as JD Logistics cautions that it will pursue market share gains at the cost of profitability over the medium term. We opined that JD Logistics has the right ingredients to ride out the industry’s current price-competitive dynamics and deliver good shareholder returns over the medium term. Overall, based on valuation analysis, we think that the IPO price range is attractive, particularly in the context of JD Logistics' positioning and higher than peers forecasted growth. 

Japan

SoftBank Group Corp provides telecommunication services.  The Company also operates ADSL (Asymmetric Digital Subscriber Line) and fiber optic high-speed Internet connection, e-Commerce businesses, and Internet based advertising and auction businesses.

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Softbank Group (ADR) (SFTBY US)

Global Emerging Markets Weekly: 21 May 2021

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity...

Wium Malan, CFA

Softbank – Governance Director Out the Door

Softbank just announced a spate of board changes and Yuko Kawamoto who was brought in to improve governance is departing before a year is up... and...

Mio Kato

Morning Views Asia: JSW Steel Ltd, Softbank Group, Tata Steel Ltd

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region,...

Lucror Analytics

Softbank Group - The Market Is Sending a Message

Even with a record one-day performance for Vision Fund's public portfolio, the discount to fair value has widened to 34% from c. 20% last week...

Kirk Boodry

JD Logistics IPO: Valuation Insights

The net proceeds are $3.2 billion at the mid-point of the IPO price range. We think that the IPO price range is attractive due to JD Logistics'...

Arun George

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