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.

Event-Driven

On 22nd March 2018, after market close in Hong Kong one of the largest overnight placements was launched. On that day, <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> reluctantly sold US$10bn worth of <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a> shares. I say reluctantly because Naspers provided a three year lock-up at the time of the deal. That lock-up will expire next month. We have covered the previous placement in our earlier note, <a href="https://www.smartkarma.com/insights/tencent-placement-huge-deal-in-size-small-in-relative-terms-succumbing-to-the-holdco-discount" target="_blank" rel="noopener">Tencent Placement - Huge Deal in Size, Small in Relative Terms - Succumbing to the HoldCo Discount</a>. In this note, I’ll talk about the upcoming lock-up expiry, its implications and the updates since then.

On 22nd March 2018, after market close in Hong Kong one of the largest overnight placements was launched. On that day, Naspers (NPN SJ) reluctantly sold US$10bn worth of Tencent Holdings (700 HK) shares. I say reluctantly because Naspers provided a three year lock-up at the time of the deal. That lock-up will expire next month. We have covered the previous placement in our earlier note, Tencent Placement - Huge Deal in Size, Small in Relative Terms - Succumbing to the HoldCo Discount. In this note, I’ll talk about the upcoming lock-up expiry, its implications and the updates since then.

Tencent Placement Lock-Up Expiry - US$10bn+ Block and Buyback Linked Holdco Trade

Global Special Situations & Strategy, SR Services Ltd

David Lepper

Global Special Situations & Strategy

SR Services Ltd

SR Services provides Strategic Knowledge and Solutions services for Family Offices and Corporate Business. 

We deliver this via advisory services, strategic planning, opportunity analysis/sourcing, as well as solution implementation. 

Whilst, we create intellectual discipline and operational leverage for your projects or daily activities, our ultimate objective is to empower whilst enhancing your decision making. 

Strategic Knowledge and Solutions

Cross Asset Strategy

2020 saw Asia Pacific activist campaigns down 9.7% YoY. Considering the issues which played out over the year this is a better than expected result. What is key is that Asia remained resilient compared to Europe which saw a 16% YoY decline, in activism campaigns respectively. Sifting through the data highlights some interesting and share price impactful trends when looking at how Activism may play out in 2021.

2020 saw Asia Pacific activist campaigns down 9.7% YoY. Considering the issues which played out over the year this is a better than expected result. What is key is that Asia remained resilient compared to Europe which saw a 16% YoY decline, in activism campaigns respectively. Sifting through the data highlights some interesting and share price impactful trends when looking at how Activism may play out in 2021.

Notes from the Silk Road: Activism - 2020 Review Reveals Some Interesting Trends

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

<a href="https://www.smartkarma.com/entities/coupang" target="_blank" data-smartkarma-citation="entities:28425:1" rel="noopener">Coupang (CPNG KS)</a> is the largest e-commerce platform in South Korea, according to Euromonitor. Coupang is best known for Rocket Delivery, which provides free, next-day delivery for orders placed any time of the day. It also offers the Rocket WOW membership program, a grocery offering (Rocket Fresh), a logistics food delivery offering (Coupang Eats) and digital financial services (Coupang Pay). Coupang, which is backed by <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>, has filed for an NYSE IPO to raise up to $2 billion, according to press reports.<div class="content-highlight">Coupang was a beneficiary of the COVID-19 pandemic resulting in a strong 2020. It is likely that the COVID-19 pandemic has a shifted some customer behaviour permanently in favour of Coupang’ business. Coupang's fundamentals tick all the right boxes and worth a look, in our view.</div>

Coupang (CPNG KS) is the largest e-commerce platform in South Korea, according to Euromonitor. Coupang is best known for Rocket Delivery, which provides free, next-day delivery for orders placed any time of the day. It also offers the Rocket WOW membership program, a grocery offering (Rocket Fresh), a logistics food delivery offering (Coupang Eats) and digital financial services (Coupang Pay). Coupang, which is backed by Softbank Group (9984 JP), has filed for an NYSE IPO to raise up to $2 billion, according to press reports.Coupang was a beneficiary of the COVID-19 pandemic resulting in a strong 2020. It is likely that the COVID-19 pandemic has a shifted some customer behaviour permanently in favour of Coupang’ business. Coupang's fundamentals tick all the right boxes and worth a look, in our view.

Coupang IPO Initiation: Delivering the Goods

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

Major global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE) continue to trend higher and are devoid of bearish inflections. Additionally, the US dollar (DXY) is likely headed lower, something we view as a positive risk-on signal for global equities. As a result, we remain bullish and we continue to recommend adding exposure on pullbacks.

Major global indexes (MSCI ACWI, ACWI ex-US, EM, and EAFE) continue to trend higher and are devoid of bearish inflections. Additionally, the US dollar (DXY) is likely headed lower, something we view as a positive risk-on signal for global equities. As a result, we remain bullish and we continue to recommend adding exposure on pullbacks.

Japan Breaking Out; EM Remains Leadership

Senior Credit Analyst, Lucror Analytics

Trung Nguyen

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

Softbank Group's (SBG) Q3/20-21 results were robust, with a large Softbank Vision Funds gain on the back of a highly bullish market. However, the NAV declined slightly during the quarter (but continued growing for 9M) due to the drop in Alibaba's share price following the failed IPO of Ant Financial. The financial risk profile remains robust, with the LTV low at 15% (12% at end-September 2020, 16% at FYE 2019-20). It is comforting to hear that SBG will prioritise private investments, instead of public securities where it does not have a track record or expertise. We find the negative outlook by Moody’s and S&P slightly harsh, considering the favourable operating environment for the investment holdco, with most assets having increased in value over the past 12 months. Moreover, Moody’s Ba3 rating is 1-2 notches lower than our own estimate based on the agency's methodology.

  Softbank Group's (SBG) Q3/20-21 results were robust, with a large Softbank Vision Funds gain on the back of a highly bullish market. However, the NAV declined slightly during the quarter (but continued growing for 9M) due to the drop in Alibaba's share price following the failed IPO of Ant Financial. The financial risk profile remains robust, with the LTV low at 15% (12% at end-September 2020, 16% at FYE 2019-20). It is comforting to hear that SBG will prioritise private investments, instead of public securities where it does not have a track record or expertise.   We find the negative outlook by Moody’s and S&P slightly harsh, considering the favourable operating environment for the investment holdco, with most assets having increased in value over the past 12 months. Moreover, Moody’s Ba3 rating is 1-2 notches lower than our own estimate based on the agency's methodology. 

Softbank Group - Earnings Flash - Q3 FY 2020-21 Results - Lucror Analytics

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)

Tencent Placement Lock-Up Expiry - US$10bn+ Block and Buyback Linked Holdco Trade

On 22nd March 2018, after market close, one of the largest overnight placements was launched. On that day, Naspers reluctantly sold US$10bn worth...

Sumeet Singh

Notes from the Silk Road: Activism - 2020 Review Reveals Some Interesting Trends

2020 activism numbers are in with some interesting underlying trends reflecting possibilities of how campaigns in 2021 & 2022 may evolve notably...

David Lepper

Coupang IPO Initiation: Delivering the Goods

Coupang, which is backed by Softbank, has filed for an NYSE IPO to raise up to $2 billion, according to press reports. Coupang's fundamentals tick...

Arun George

Japan Breaking Out; EM Remains Leadership

Major global indexes continue to trend higher and are devoid of bearish inflections. As a result, we remain bullish and we continue to recommend...

Vermilion Research

Softbank Group - Earnings Flash - Q3 FY 2020-21 Results - Lucror Analytics

Softbank Group's (SBG) Q3/20-21 results were robust, with a large Softbank Vision Funds gain on the back of a highly bullish market. However, the...

Lucror Analytics

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