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.

Equity Capital Markets

RLX Technology Inc / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/rlx-technology-inc" target="_blank" data-smartkarma-citation="entities:31113:1" rel="noopener">RLX Technology Inc (RLX US)</a> aims to raise around US$1.1bn in its US listing. RLX is the largest branded e-vapor company in China with a market share of closed-system e-vapor products in terms of retail sales value of 48% in 2019 and 62.6% over 9M20. </p></div><div><p>RLX only sells its e-vapor products in China. As of Sep 2020, it had over 5,000 branded partner stores and sold its products in over 100,000 other retail outlets, covering over 250 cities in China.</p></div><div><p>Even though the company only started operations in 2018, it was already recording sales of around US$330m by 9M20. Margins too have been on an uptrend and operating cash flows have been robust. Moreover, the founding team and investor backing appear strong.</p></div><div><p>However, sales have mostly grown owing to rapid expansion of its distribution network. Furthermore, the brand also appears to have overseas operations but there has been no mention of that in the company’s filings, leaving one to wonder where these operations are housed and who exactly owns them.</p></div><div><p>In our previous note, links to which are below, we have spoke about various aspects of the deal. In this note, we'll run the deal through our ECM framework and comment on updates in the new filing.</p></div><div><p><strong>Links to our previous notes:</strong></p></div><div><ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/rlx-technology-pre-ipo-the-positives-fast-growth-low-penetration" target="_blank" data-smartkarma-citation="insights:46797" rel="noopener">RLX Technology Pre-IPO - The Positives - Fast Growth, Low Penetration</a> </li>
<li><a href="https://www.smartkarma.com/insights/rlx-technology-pre-ipo-the-negatives-limited-track-record-and-missing-international-ops" target="_blank" data-smartkarma-citation="insights:46836" rel="noopener">RLX Technology Pre-IPO - The Negatives - Limited Track Record, and Missing International Ops</a></li>
<li><a href="https://www.smartkarma.com/insights/rlx-technology-pre-ipo-rlx-store-visits-to-relx-and-its-competitors" target="_blank" rel="noopener">RLX Technology Pre-IPO (RLX): Store Visits to Relx and Its Competitors</a></li>
<li><a href="https://www.smartkarma.com/insights/rlx-technology-pre-ipo-peer-comparison-and-valuation" target="_blank" rel="noopener">RLX Technology Pre-IPO - Peer Comparison and Valuation</a></li>
</ul></div>

RLX Technology Inc (RLX US) aims to raise around US$1.1bn in its US listing. RLX is the largest branded e-vapor company in China with a market share of closed-system e-vapor products in terms of retail sales value of 48% in 2019 and 62.6% over 9M20. RLX only sells its e-vapor products in China. As of Sep 2020, it had over 5,000 branded partner stores and sold its products in over 100,000 other retail outlets, covering over 250 cities in China.Even though the company only started operations in 2018, it was already recording sales of around US$330m by 9M20. Margins too have been on an uptrend and operating cash flows have been robust. Moreover, the founding team and investor backing appear strong.However, sales have mostly grown owing to rapid expansion of its distribution network. Furthermore, the brand also appears to have overseas operations but there has been no mention of that in the company’s filings, leaving one to wonder where these operations are housed and who exactly owns them.In our previous note, links to which are below, we have spoke about various aspects of the deal. In this note, we'll run the deal through our ECM framework and comment on updates in the new filing.Links to our previous notes:

RLX Technology Pre-IPO - The Positives - Fast Growth, Low Penetration 
RLX Technology Pre-IPO - The Negatives - Limited Track Record, and Missing International Ops
RLX Technology Pre-IPO (RLX): Store Visits to Relx and Its Competitors
RLX Technology Pre-IPO - Peer Comparison and Valuation


RLX Technology IPO - Valuation Has More than Doubled in Two Months

Man Wah Holdings / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/man-wah-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15846:1" rel="noopener">Man Wah Holdings (1999 HK)</a> plans to raise around US$260m to expand manufacturing facilities in China and open stores.</p><p>The stock has been doing well this year on the back of planned domestic retail expansion and analyst continue to remain bullish on the stock.</p>

Man Wah Holdings (1999 HK) plans to raise around US$260m to expand manufacturing facilities in China and open stores.The stock has been doing well this year on the back of planned domestic retail expansion and analyst continue to remain bullish on the stock.

Man Wah Placement - Riding High on Planned Store Expansion

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.

<p><a href="https://www.smartkarma.com/entities/netjoy" target="_blank" data-smartkarma-citation="entities:29729:1" rel="noopener">Netjoy (2131 HK)</a> , a leading provider of short video marketing solutions and online content services in China has filed for an IPO to list its shares on the Hong Kong Stock Exchange. The company aims to raise HK$1.2bn (approx. US$151m) at the midpoint of the IPO price of HK$6.32 per share.</p><p>According to iResearch, the company was ranked the third-largest online marketing solutions provider in China in 2019 based on gross billings generated from short video advertisements.</p><p>In this insight, we examine the company’s business model, business segments and financials.</p>

Netjoy (2131 HK) , a leading provider of short video marketing solutions and online content services in China has filed for an IPO to list its shares on the Hong Kong Stock Exchange. The company aims to raise HK$1.2bn (approx. US$151m) at the midpoint of the IPO price of HK$6.32 per share.According to iResearch, the company was ranked the third-largest online marketing solutions provider in China in 2019 based on gross billings generated from short video advertisements.In this insight, we examine the company’s business model, business segments and financials.

Investment Research - Asia Consumer Sector, Investory

Devi Subhakesan

Investment Research - Asia Consumer Sector

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

Thematic (Sector/Industry)

<p> In this Smartkarma Original Series report, we scan the Asia Direct-to-Consumer (D2C) channel space for Consumer Packaged Goods to identify the verticals that have gained wider consumer acceptance and witnessed steady growth in each of the key geographies - China, South East Asia, and India. We look into the factors that enabled notable D2C brands in the Beauty, Fashion, and Food verticals to make steady inroads and disrupt the sector within a short period. We discuss the D2C ecosystem, brand journey and key challenges. 2020 has been the year that fast-tracked online retail penetration in most parts of Asia. In this context, we profile D2C brands with either a dominant segment presence or unique business model to gain a deeper understanding of the Asia D2C landscape.</p>
<p><strong>What is original about this report?</strong> Insights and takeaways for Investors in Asia D2C branded players in consumer space based on our comparative study of the segment across three key geographies - China, SE Asia, and India. China's early march in digital transformation and D2C market space offers valuable lessons to players/investors in early-stage digital markets like India which is witnessing aggressive traction in this space. Insights discussed in the report have mostly been weaned from the startup experiences shared by founders of reputed D2C brands. The report also analyses investment outlook for select digitally native D2C brands with lead segment presence and/or unique business models.</p>

 In this Smartkarma Original Series report, we scan the Asia Direct-to-Consumer (D2C) channel space for Consumer Packaged Goods to identify the verticals that have gained wider consumer acceptance and witnessed steady growth in each of the key geographies - China, South East Asia, and India. We look into the factors that enabled notable D2C brands in the Beauty, Fashion, and Food verticals to make steady inroads and disrupt the sector within a short period. We discuss the D2C ecosystem, brand journey and key challenges. 2020 has been the year that fast-tracked online retail penetration in most parts of Asia. In this context, we profile D2C brands with either a dominant segment presence or unique business model to gain a deeper understanding of the Asia D2C landscape.
What is original about this report? Insights and takeaways for Investors in Asia D2C branded players in consumer space based on our comparative study of the segment across three key geographies - China, SE Asia, and India. China's early march in digital transformation and D2C market space offers valuable lessons to players/investors in early-stage digital markets like India which is witnessing aggressive traction in this space. Insights discussed in the report have mostly been weaned from the startup experiences shared by founders of reputed D2C brands. The report also analyses investment outlook for select digitally native D2C brands with lead segment presence and/or unique business models.

D2C Brands in Asia: Disruption Potential in Consumer Space

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<div class="content-highlight">
<p><strong>Amorepacific Corp is our 2021 high conviction idea in Korea. It is a turnaround play as the top company in the Korean cosmetics sector after a 'once in a century' pandemic.</strong></p>
<h3><strong>Key catalysts are as follows:</strong></h3>
<ul>
<li>An inverse relationship between cosmetics consumption and wearing masks &amp; COVID-19 cases</li>
<li>Improving data on overseas online sales of luxury cosmetics segment </li>
<li>A big restructuring</li>
</ul>
<h3><strong>Valuation</strong></h3>
<p>If we apply a 3.6x P/B multiple (25% lower than the 5-year historical average) on Amorepacific using an estimated book value of 4.7 trillion won (at end of 2021), this would suggest an implied market cap of 17 trillion won, or 291,000 won per share (representing a 48% upside to current levels over a one year view). Given this attractive upside, we have a positive view of Amorepacific Corp.</p>
</div>


Amorepacific Corp is our 2021 high conviction idea in Korea. It is a turnaround play as the top company in the Korean cosmetics sector after a 'once in a century' pandemic.
Key catalysts are as follows:

An inverse relationship between cosmetics consumption and wearing masks &amp; COVID-19 cases
Improving data on overseas online sales of luxury cosmetics segment 
A big restructuring

Valuation
If we apply a 3.6x P/B multiple (25% lower than the 5-year historical average) on Amorepacific using an estimated book value of 4.7 trillion won (at end of 2021), this would suggest an implied market cap of 17 trillion won, or 291,000 won per share (representing a 48% upside to current levels over a one year view). Given this attractive upside, we have a positive view of Amorepacific Corp.


2021 High Conviction in Korea: Amorepacific Corp - Turnaround After 'Once in a Century' Pandemic

China

Yatsen Holding Limited operates as a holding company. The Company, through its subsidiaries, retails cosmetics, skincare, and other beauty products. Yatsen Holding serves customers worldwide.

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Yatsen Holding Ltd (YSG US)

RLX Technology IPO - Valuation Has More than Doubled in Two Months

RLX Technology (RLX US) aims to raise around US$1.1bn in its US listing. RLX is the largest branded e-vapor company in China with a market share of...

Sumeet Singh

Man Wah Placement - Riding High on Planned Store Expansion

Man Wah Holdings (1999 HK) plans to raise around US$260m to expand manufacturing facilities in China and open new stores. The stock has nearly...

Sumeet Singh

Netjoy Holdings IPO: Not So Joyful

Netjoy, a leading provider of short video marketing solutions and online content services in China has filed for an IPO to list its shares on the...

Shifara Samsudeen, ACMA, CGMA

D2C Brands in Asia: Disruption Potential in Consumer Space

Insights for investors based on comparative study of Asia D2C landscape across India, SE Asia & China.Analysis of relative segment attractiveness....

Devi Subhakesan

2021 High Conviction in Korea: Amorepacific Corp - Turnaround After 'Once in a Century' Pandemic

Amorepacific Corp is our 2021 high conviction idea in Korea. It is a turnaround play as the top company in the Korean cosmetics sector after a...

Douglas Kim

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