In today’s briefing:
- KOSDAQ 150 Early Entry Candidates for December Rebalancing
- Softbank Group – An Acceleration in Investment Does Not Require a Third Vision Fund
- Poor Initial IPO Book Building Results for WCP
- Open Edges Technology IPO Book Building Results
- Fazz Secures US$100M Series C to Grow Its Lending Services, Expand Team in SEA
- Earnings Quality Short Candidates: ZoomInfo, Gogo, Elanco Animal Hlth, Sonos, Energizer
- Glife Technologies Raises US$3M Series A+ to Connect Restaurants with Farmers
- SG Fintech Firm M-Daq Expands into Japan with New Office
- East Ventures Pours Seed Funding into Indonesian Online Kitchen Startup
KOSDAQ 150 Early Entry Candidates for December Rebalancing
- HPSP (403870 KS) and Sungeel Hitech (365340 KS) are the candidates for Early Entry in the December rebalancing as they sit comfortably within the Early Entry zone.
- Rsupport (131370 KS) and Kona I (052400 KS) are safe deletion bets. If they are not deleted through the rebalancing process, they will most likely be excluded by Early Entry.
- HPSP and SungEel should see an inflow equivalent to 0.9x and 0.8x ADTVs, respectively. Rsupport and Kona I will likely suffer an outflow of 3.4x and 3.8x ADTVs, respectively.
Softbank Group – An Acceleration in Investment Does Not Require a Third Vision Fund
- Press reports indicate Softbank Group (9984 JP) is considering a third Vision Fund which seems to conflict with its more defensive posture at Q1 results last month
- Softbank can re-accelerate investment at any time without VF3 so talk of a new fund is not a signal change. Perceptions of private equity value are more important
- And a key message over the last six months is founders are too optimistic and that seems unlikely to shift suddenly. We have updated our SB performance tables below
Poor Initial IPO Book Building Results for WCP
- Several local Korean media reported that the initial book building results for the WCP IPO has been disappointing.
- The IPO could be priced close to 60,000 won to 65,000 won won, which would be about 19%-25% lower than the low end of the IPO price range.
- The final decision as to whether or not WCP will go ahead with the IPO at lower price or delay it altogether is expected to be made on/near 19 September.
Open Edges Technology IPO Book Building Results
- Openedges Technology (394280 KS) announced its IPO book building results. The IPO price has been determined at 10,000 won (33% lower than the low end of the IPO range).
- We maintain our Positive View on this IPO but we lowered our base case valuation by 33% to 16,542 won per share, representing a 65% upside from the IPO price.
- Open Edges Technology is a system semiconductor IP specialist with one of the world’s only integrated AI semiconductor design asset IP platform. Its sales increased by 376% YoY in 2021.
Fazz Secures US$100M Series C to Grow Its Lending Services, Expand Team in SEA
- Fazz claims it saw US$10B in annualised transaction volumes over the past year and looks to double the volumes in the next 12 months
- Fazz, a digital financial services group dual-headquartered in Singapore and Indonesia, has announced a US$100 million Series C funding round.
- Fazz will use the funds to grow the business and expand its teams in Singapore, Indonesia, Malaysia, Vietnam and Taiwan from 800 to 1,400.
Earnings Quality Short Candidates: ZoomInfo, Gogo, Elanco Animal Hlth, Sonos, Energizer
- This model seeks short-sale candidates among companies that use aggressive accounting and/or exhibit deteriorating quality of earnings.
- They are typically highly idiosyncratic shorts and require thoughtful analyses of upcoming catalysts. When the company’s issues become well-known, there is often multiple compression as well as a rerating.
- These shorts can have high or low betas, valuations based on artificial earnings and exhibit good short responses to subsequently disappointing earnings.
Glife Technologies Raises US$3M Series A+ to Connect Restaurants with Farmers
- Glife Technologies aggregates demand for food produce from restaurants and match it with suppliers, giving restaurants better access to a variety of products
- Singapore-headquartered Glife Technologies, a B2B marketplace to connect restaurants with farmers, has extended its Series round with a US$3 million investment from Tin Men Capital.
- Glife will use the fresh funds to accelerate the launch and operations of its digital marketplace for F&B suppliers and merchants in Q42022 and enlarge its market share in the Indonesian market.
SG Fintech Firm M-Daq Expands into Japan with New Office
M-Daq Global, a Singapore-based fintech firm that provides forex solutions, has opened an office in Japan as part of its international expansion plans.
- The move comes after the company expanded into European markets by signing an agreement with London-based trading platform Turquoise to provide multiasset services.
- The company has processed over US$32 billion in cross-border transactions over 45 markets since the launch of its Aladdin FX ecommerce solution in 2016.
East Ventures Pours Seed Funding into Indonesian Online Kitchen Startup
- Food delivery is the digital sector with the highest adoption in Southeast Asia. The pandemic gave the segment a huge boost, as people were forced to stay at home.
- Local food startup Uena tried to solve this by building a network of online kitchens that can deliver these meals directly to customers.
- It targets lower and middle-income segments, such as office workers, university students, convenience store employees, and couriers of food delivery apps.
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