Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/22772" target="_blank" data-smartkarma-citation="entities:22772:1">LINE Corp</a> set the price for its IPO at 3,300 Yen per share today, which is at the top of its price range. The book building progressed well and the company is ready to complete the biggest tech IPO of 2016. Our base case one year valuation of the company is 3,676 Yen/share (11% upside to IPO price, based on estimated EBIT of 27 billion Yen in 2017, using 25.4x EV/EBIT) and high-end case valuation is 4,363 yen/share (32% upside to IPO price, based on estimated EBIT of 30 billion Yen in 2017…

LINE Corp set the price for its IPO at 3,300 Yen per share today, which is at the top of its price range. The book building progressed well and the company is ready to complete the biggest tech IPO of 2016. Our base case one year valuation of the company is 3,676 Yen/share (11% upside to IPO price, based on estimated EBIT of 27 billion Yen in 2017, using 25.4x EV/EBIT) and high-end case valuation is 4,363 yen/share (32% upside to IPO price, based on estimated EBIT of 30 billion Yen in 2017…

Differentiated global TMT & Internet Research

New Street Research Insights

New Street Research

Research is provided by our team of experienced analysts. Our work is idea driven, based on independence of thought, sector expertise, and firmly focused on fundamentals and valuation of telecoms and internet names globally. New Street is headquartered in London with offices in New York, Singapore and Australia. 

New Street Research is an independent, partner-owned, research firm specialising in equity and debt research. Our equity research embraces the following sectors:

Pan European Telecom Services and Cable
US Telecoms, Cable, Satellite and Towers
Global Emerging Market Telecoms
Japan Telecoms
Asian Internet
Pan European Healthcare
US Healthcare
Japanese Healthcare

We also provide debt research on:
Pan European Telecom Services and Cable

Equity Bottom-Up

The Chinese mobile game market is shifting towards hard-core genres. This is positive for revenue growth at both <a href="https://www.smartkarma.com/entities/26" target="_blank" data-smartkarma-citation="entities:26:1">Tencent</a> and <a href="https://www.smartkarma.com/entities/17203" target="_blank" data-smartkarma-citation="entities:17203:1">Netease</a> and may also raise barriers to competition. In recent quarters the two have expanded their  revenue share - they should account for 77% of sector sales this year.We are strong believers in the potential of mobile game monetization with Tencent and NetEase at the forefront of shifts. We are positive on the fundamentals for both companies and have modestly raised our…

The Chinese mobile game market is shifting towards hard-core genres. This is positive for revenue growth at both Tencent and Netease and may also raise barriers to competition. In recent quarters the two have expanded their  revenue share - they should account for 77% of sector sales this year.We are strong believers in the potential of mobile game monetization with Tencent and NetEase at the forefront of shifts. We are positive on the fundamentals for both companies and have modestly raised our…

China Online Games: Tencent and NetEase Increasingly Dominant.

Thematic (Sector/Industry)

In May, the China Securities Regulatory Commission (CSRC) issued draft regulations on back-door listings in an attempt to curb market volatility and speculation around shell companies. The rules extend the lock-up period for strategic shareholders from one to two or three years and include a ban on fundraising. This has put the brakes on privatisation plans by US-listed China companies as private equity investors need to contemplate longer holding periods in a volatile environment. We expect more privatisation plans to be withdrawn after recent moves from <a href="https://www.smartkarma.com/entities/21-vianet-group-inc-adr" target="_blank" data-smartkarma-citation="entities:8489:1">21 Vianet</a>  and <a href="https://www.smartkarma.com/entities/285" target="_blank" data-smartkarma-citation="entities:285:1">YY Inc</a>. <a href="https://www.smartkarma.com/entities/523" target="_blank" data-smartkarma-citation="entities:523">Qihoo</a> is the largest offer still in the mix and they have pushed closing back to August.  Some companies with existing privatisation plans have seen their share prices fall dramatically and may now offer interesting risk reward.

In May, the China Securities Regulatory Commission (CSRC) issued draft regulations on back-door listings in an attempt to curb market volatility and speculation around shell companies. The rules extend the lock-up period for strategic shareholders from one to two or three years and include a ban on fundraising. This has put the brakes on privatisation plans by US-listed China companies as private equity investors need to contemplate longer holding periods in a volatile environment. We expect more privatisation plans to be withdrawn after recent moves from 21 Vianet  and YY Inc. Qihoo is the largest offer still in the mix and they have pushed closing back to August.  Some companies with existing privatisation plans have seen their share prices fall dramatically and may now offer interesting risk reward. 

China Internet: Going Private Transactions at Risk

Global Asset Allocation, Politics & Governance, Ecstrat

John-Paul Smith

Global Asset Allocation, Politics & Governance

Ecstrat

Ecstrat is a consultancy advising on asset allocation between global equity markets, with a focus on the intersection of governments, geopolitics, governance and markets.
 
Over the past few years and more especially since the Great Financial Crisis (GFC), investors have become more focused on short-term market movements and real-time returns and have consequently neglected the analysis of the underlying structural themes that underpin longer term performance.
​
More specifically we believe that the evolution of governance-based relationships between investors, controlling shareholders, labour and the state is one of the primary determinants of both relative and absolute performance between individual equity markets.
 
We will endeavour to provide investors with some of the context surrounding governance-related issues which encompass many different disciplines including history, economics and political science, as well as the financial metrics which are the most obvious manifestation of the structural characteristics of each market.
 
We will pay particular attention to the shifts and potential inflection points for governance in individual markets as these are often the best lead indicators for both economic and market performance.

Cross Asset Strategy

In this brief piece we take a considered stance on the likelihood of Brexit actually proceeding in the wake of June’s referendum and examine some of the strategic implications for equity investors in terms of the potential shifts in sovereign and corporate governance.

In this brief piece we take a considered stance on the likelihood of Brexit actually proceeding in the wake of June’s referendum and examine some of the strategic implications for equity investors in terms of the potential shifts in sovereign and corporate governance.

<a href="https://www.smartkarma.com/entities/21085" target="_blank" data-smartkarma-citation="entities:21085:1">Naspers</a> recent FY16 results showed continued positive top-line development, which was offset by increased development spending. While there is some disappointment in the increased development spending on new ventures,  they do not materially change our positive view on the stock. The results suggest any re-rating based on earnings is unlikely in the short term. Still, Naspers remains a fascinating growth story with a wide variety of investments across many markets. We maintain our Buy…

Naspers recent FY16 results showed continued positive top-line development, which was offset by increased development spending. While there is some disappointment in the increased development spending on new ventures,  they do not materially change our positive view on the stock. The results suggest any re-rating based on earnings is unlikely in the short term. Still, Naspers remains a fascinating growth story with a wide variety of investments across many markets. We maintain our Buy…

Naspers: Latest Results Show Good Revenue Traction but It Comes with a Cost.

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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

Tencent (700 HK)

LINE Prices Its IPO - Implications

LINE Corp set the price for its IPO at 3,300 Yen per share today, which is at the top of its price range. The book building progressed well and the...

Douglas Kim

China Online Games: Tencent and NetEase Increasingly Dominant.

The Chinese mobile game market is shifting towards hard-core genres. This is positive for revenue growth at both Tencent and Netease and may also...

New Street Research

China Internet: Going Private Transactions at Risk

In May, the China Securities Regulatory Commission (CSRC) issued draft regulations on back-door listings in an attempt to curb market volatility...

New Street Research

Brexit; Unintended Consequences

In this brief piece we take a considered stance on the likelihood of Brexit actually proceeding in the wake of June’s referendum and examine some...

John-Paul Smith

Naspers: Latest Results Show Good Revenue Traction but It Comes with a Cost.

Naspers recent FY16 results showed continued positive top-line development, which was offset by increased development spending. While there is some...

New Street Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)