In today’s briefing:
- Coinbase: From Sleeping Giant To Industry Leader
- SignatureGlobal (India) IPO- Forensic Analysis
- Remitly – Rev +49% | ROW Rev +120% | Scaling: COGS -25% | Adj EBITDA Margin 2Q23 Is 8.7%, Highest
- Seoul Guarantee Insurance IPO: The Bear Case
- Hywin [HYW}: Solid Sales, 60% Net Cash, 17% FCF Yield, Strong Client Metrics
- China Expands Use of Digital Yuan to Covering Utility Bills
Coinbase: From Sleeping Giant To Industry Leader
- Coinbase sees the looming opportunity in the global crypto futures & derivatives market. It’s positioning itself to capitalize on a market that’s been hollowed out over last 12-18 months.
- We explore 3 key areas of Coinbase’s business that we believe Wall Street is overlooking. These include: Coinbase International, ETF Spot approvals, and Base Chain
- We estimate Coinbase has the potential to realize additional top-line revenue in the range of 15-20% on the low-end to +150% increase on the high-end over the next few years.
SignatureGlobal (India) IPO- Forensic Analysis
- SignatureGlobal India Pvt Ltd (1468641D IN) IPO will go live for subscription this week.
- The company is one of the renowned players in the NCR and Haryana in the affordable and lower mid segment housing.
- The company has grown well in the recent times, however there are certain forensic takeaways such as poor health of subsidiaries, related party transactions, etc.
Remitly – Rev +49% | ROW Rev +120% | Scaling: COGS -25% | Adj EBITDA Margin 2Q23 Is 8.7%, Highest
- Remitly (RELY) offers remittances services with 5m active customers, in over 170 countries, with 4 billion bank accounts, and 4,800 corridors, mostly to persons in US, Canada.
- Revenue growth is strong at 49% YoY in 2Q23 and averaging 43% YoY for the preceding 5 quarters, with active customers up 474,000 in 2Q23 QoQ vs 371,000 in 1Q23
- Costs remain high, GAAP earnings are in loss, but this is due to stock-based compensation; adjusted EBITDA is now USD20.4m in 2Q23 from an adjusted EBITDA loss YoY
Seoul Guarantee Insurance IPO: The Bear Case
- Seoul Guarantee Insurance (031210 KS), a leading guarantee provider in Korea, is pre-marketing an IPO to raise up to KRW362 billion (US$272 million).
- In Seoul Guarantee Insurance IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.
- The bear case rests on ongoing market share losses, weak performing credit insurance business, a 1H23 increase in the combined ratio and a decline in ROA/ROE metrics.
Hywin [HYW}: Solid Sales, 60% Net Cash, 17% FCF Yield, Strong Client Metrics
- Active clients increased 6.5% to 46,627 [roughly 30% of total], despite challenging domestic markets. Note: this metric surged 27% sequentially
- 82% of client activity focused on international markets/products, highlighting the diverse, value-added nature of Hywin’s offerings
- Transaction value of overall wealth products declined -9%, asset-backed products down -5.8%, reflecting weak equity & property markets
China Expands Use of Digital Yuan to Covering Utility Bills
- China further expanded the use of the digital yuan by enabling consumers to use it to pay utility bills.
- The digital yuan, also known as the e-CNY, is a legal currency in digital form issued by the central bank.
- The People’s Bank of China (PBOC) recently updated its e-CNY mobile wallet app, adding new features that allow users to pay water, gas, electricity, heating and phone bills with the digital yuan.
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