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

Renesas Electronics / Equity Capital Markets

Renesas, along with INCJ, aims to raise around US$3.4bn via selling a mix of primary and secondary shares.The current deal would be of somewhat similar size as two of the past deals that we have covered for Renesas:<ul>
<li dir="ltr" aria-level="1">US$2.8bn bn in 2017 <a href="https://www.smartkarma.com/insights/renesas-electronics-placement-additional-thoughts-on-valuation-flotation-and-ownership" target="_blank" rel="noopener">Renesas Electronics Placement: Additional Thoughts on Valuation, Flotation, and Ownership</a></li>
<li dir="ltr" aria-level="1">US$2.4bn in 2018 <a href="https://www.smartkarma.com/insights/renesas-placement-tighter-effective-discount-and-placement-overhangs-but-statistic-supports-a-bid" target="_blank" rel="noopener">Renesas Placement: Tighter Effective Discount and Placement Overhangs but Statistic Supports a Bid</a></li>
</ul>In this insight, we'll run the deal through our ECM framework and talk about deal dynamics.

Renesas, along with INCJ, aims to raise around US$3.4bn via selling a mix of primary and secondary shares.The current deal would be of somewhat similar size as two of the past deals that we have covered for Renesas:
US$2.8bn bn in 2017 Renesas Electronics Placement: Additional Thoughts on Valuation, Flotation, and Ownership
US$2.4bn in 2018 Renesas Placement: Tighter Effective Discount and Placement Overhangs but Statistic Supports a Bid
In this insight, we'll run the deal through our ECM framework and talk about deal dynamics.

Renesas Placement - Very Well Flagged, past Deals Have Done Well but Large Size Warrants Correction

Telco/Internet specialist

Kirk Boodry

Redex Research

Thematic (Sector/Industry)

Kyodo News reports that Apple is asking the Ministry of Industry Affairs and Communications (MIC, the regulator) to allow higher subsidies for iPhones to help promote the spread of 5G services. To be clear, it is the mobile operators that would offer these subsidies which were capped last year by the regulator at ¥20,000/device even as handset/service pricing was unbundled. We thought this would be a good opportunity to highlight how Apple has grown in Japan especially compared to the mobile operators.

Kyodo News reports that Apple is asking the Ministry of Industry Affairs and Communications (MIC, the regulator) to allow higher subsidies for iPhones to help promote the spread of 5G services. To be clear, it is the mobile operators that would offer these subsidies which were capped last year by the regulator at ¥20,000/device even as handset/service pricing was unbundled. We thought this would be a good opportunity to highlight how Apple has grown in Japan especially compared to the mobile operators.

Apple (Japan) Is Asking the Regulator to Allow Higher Subsidies for IPhone

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI Corp (9433 JP)</a> announced in-line results, decent forecasts, yet another dividend hike (20 consecutive years of dividend hikes), and in something of a surprise, a big buyback. Smartkarma's resident expert Japan telecoms analyst <a href="https://www.smartkarma.com/profiles/kirk-boodry" target="_blank" data-smartkarma-citation="accounts:1920" rel="noopener">Kirk Boodry</a> discussed the results and the breakdown of KDDI's results in <a href="https://www.smartkarma.com/insights/kddi-q4-20-results-slightly-better-guidance-and-solid-shareholder-returns" target="_blank" data-smartkarma-citation="insights:51467" rel="noopener">KDDI Q4 20 Results: Slightly Better Guidance and Solid Shareholder Returns</a> Friday night. The very sharp move in the share price Friday appears to have anticipated the slight "surprise" to earnings and the forecast. I personally note that the strength in KDDI earnings in the corporate segment will face increasing competition as NTT gets its act together. More below.

KDDI Corp (9433 JP) announced in-line results, decent forecasts, yet another dividend hike (20 consecutive years of dividend hikes), and in something of a surprise, a big buyback. Smartkarma's resident expert Japan telecoms analyst Kirk Boodry discussed the results and the breakdown of KDDI's results in KDDI Q4 20 Results: Slightly Better Guidance and Solid Shareholder Returns Friday night. The very sharp move in the share price Friday appears to have anticipated the slight "surprise" to earnings and the forecast. I personally note that the strength in KDDI earnings in the corporate segment will face increasing competition as NTT gets its act together. More below.

KDDI posted results that were largely in-line with consensus forecasts for Q4 and slightly ahead of our forecasts for FY21. As with recent quarters, operations were characterized by relative weakness in consumer offerings but strength in sales to corporates. The company sent a strong message on shareholder returns with the dividend going from ¥120 to ¥ 125 (the 20th straight year of increases) and a ¥150bn share purchase program (both in-line with our expectations). On the aggregate, with all telcos reporting, the incumbents are guiding to financial stability despite regulatory-driven price reductions and a more aggressive investment program by new entrant Rakuten. At 6x EBITDA and 12.5x EPS, KDDI shares look attractive and we remain at Buy.

KDDI posted results that were largely in-line with consensus forecasts for Q4 and slightly ahead of our forecasts for FY21. As with recent quarters, operations were characterized by relative weakness in consumer offerings but strength in sales to corporates. The company sent a strong message on shareholder returns with the dividend going from ¥120 to ¥ 125 (the 20th straight year of increases) and a ¥150bn share purchase program (both in-line with our expectations). On the aggregate, with all telcos reporting, the incumbents are guiding to financial stability despite regulatory-driven price reductions and a more aggressive investment program by new entrant Rakuten. At 6x EBITDA and 12.5x EPS, KDDI shares look attractive and we remain at Buy.

KDDI Q4 20 Results: Slightly Better Guidance and Solid Shareholder Returns

<a href="https://www.smartkarma.com/entities/softbank-corp" target="_blank" data-smartkarma-citation="entities:27445:1" rel="noopener">Softbank Corp (9434 JP)</a>  posted results for Q4 ahead of Redex / consensus expectations with FY21 guidance that is better than our forecasts but worse than consensus. Importantly, the company is targeting flat operating income YoY despite meaningful mobile price reductions as profit growth from Enterprise sales, Distribution, and Internet offset consumer erosion. The only disappointment in the results may be an unchanged dividend and whilst the company did not close the door on increases later in the year, there was not much enthusiasm either. Still, with results and guidance that are largely better than our expectations, we remain at Buy.

Softbank Corp (9434 JP)  posted results for Q4 ahead of Redex / consensus expectations with FY21 guidance that is better than our forecasts but worse than consensus. Importantly, the company is targeting flat operating income YoY despite meaningful mobile price reductions as profit growth from Enterprise sales, Distribution, and Internet offset consumer erosion. The only disappointment in the results may be an unchanged dividend and whilst the company did not close the door on increases later in the year, there was not much enthusiasm either. Still, with results and guidance that are largely better than our expectations, we remain at Buy. 

Softbank Corp Q4 20 Results/FY21 Guidance – Holding the Line on Mobile Pricing Changes

Japan

Softbank Corporation provides mobile phone telecommunication and networking services. The Company offers mobile communication opening, short messaging function opening, video function opening, and other services. Softbank also provides mobile phones.

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Softbank Corp (9434 JP)

Renesas Placement - Very Well Flagged, past Deals Have Done Well but Large Size Warrants Correction

Renesas, along with INCJ, aims to raise around US$3.4bn via selling a mix of primary and secondary shares. The current deal would be of somewhat...

Sumeet Singh

Apple (Japan) Is Asking the Regulator to Allow Higher Subsidies for IPhone

Apple Japan is asking the regulator to allow higher smartphone subsidies so it can sell more handsets. That's after 49% growth in Q4 and where it...

Kirk Boodry

KDDI Results and Yet Another Buyback

KDDI announced in-line earnings, better forecast, and a big buyback, in line with previous years. The company should be buying about 7% of ADV and...

Travis Lundy

KDDI Q4 20 Results: Slightly Better Guidance and Solid Shareholder Returns

KDDI results were in-line and guidance implies growth in other areas can offset consumer mobile erosion. Good report but there may be near-term...

Kirk Boodry

Softbank Corp Q4 20 Results/FY21 Guidance – Holding the Line on Mobile Pricing Changes

Softbank Corp says it will maintain profitability despite regulatory-driven mobile price cuts. The dividend will also be unchanged although...

Kirk Boodry

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