Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, 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.

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/lufax-holdings" target="_blank" data-smartkarma-citation="entities:29690:1" rel="noopener">Lufax Holdings (LU US)</a> , the personal financial services platform in China has filed for an IPO in the US. In our previous insights, we examined the company’s business model, its business segments and margins.Retail credit facilitation is the company’s largest business which accounted for about 82% of the total operating income in 1H2020. The company discontinued its peer-to-peer lending products in August 2019, and a majority of the company’s loans are funded through third-party funding and credit enhancement partners. Lufax’s microloan and consumer finance subsidiaries’ funding accounted for only 0.7% of the volume of new loans generated during 1H2020.In this insight, we have compared the company’s retail credit facilitation business against its CrediTech peers.Read our previous insights on Lufax's IPO:<a href="https://www.smartkarma.com/insights/lufax-ipo-unsecured-loans-drive-top-line-growth-but-risks-remain-despite-capital-light-model" target="_blank" data-smartkarma-citation="insights:44132" rel="noopener">Lufax IPO: Unsecured Loans Drive Top Line Growth but Risks Remain Despite Capital-Light Model</a> <a href="https://www.smartkarma.com/insights/lufax-ipo-shift-in-product-mix-and-higher-customer-acquisition-cost-eat-into-profits" target="_blank" data-smartkarma-citation="insights:44179" rel="noopener">Lufax IPO: Shift in Product Mix and Higher Customer Acquisition Cost Eat into Profits</a>

Lufax Holdings (LU US) , the personal financial services platform in China has filed for an IPO in the US. In our previous insights, we examined the company’s business model, its business segments and margins.Retail credit facilitation is the company’s largest business which accounted for about 82% of the total operating income in 1H2020. The company discontinued its peer-to-peer lending products in August 2019, and a majority of the company’s loans are funded through third-party funding and credit enhancement partners. Lufax’s microloan and consumer finance subsidiaries’ funding accounted for only 0.7% of the volume of new loans generated during 1H2020.In this insight, we have compared the company’s retail credit facilitation business against its CrediTech peers.Read our previous insights on Lufax's IPO:Lufax IPO: Unsecured Loans Drive Top Line Growth but Risks Remain Despite Capital-Light Model Lufax IPO: Shift in Product Mix and Higher Customer Acquisition Cost Eat into Profits 

Lufax IPO: Peer Comparison Reveals Change in Strategy Weighs Heavy on Company Performance

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<a href="https://www.smartkarma.com/entities/lufax-holdings" target="_blank" data-smartkarma-citation="entities:29690:1" rel="noopener">Lufax Holdings (LU US)</a> is a leading personal financial services platform in China with a focus on retail borrowing and wealth management. In retail credit, Lufax is the second-largest non-traditional financial service providers in China as measured by outstanding balances of retail credit facilitated, according to Oliver Wyman. Lufax has filed for an NYSE IPO to raise an estimated $3 billion, according to press reports. <div class="content-highlight">The Chinese consumer finance sector has gone through a corona-induced extreme stress test in 1H20. The sector has proved to be more often than not value destructive for public market investors and continues to remain hostage to regulatory change. While Lufax has several attractive attributes, it is a business in transition which magnifies the risk profile.  </div>

Lufax Holdings (LU US) is a leading personal financial services platform in China with a focus on retail borrowing and wealth management. In retail credit, Lufax is the second-largest non-traditional financial service providers in China as measured by outstanding balances of retail credit facilitated, according to Oliver Wyman. Lufax has filed for an NYSE IPO to raise an estimated $3 billion, according to press reports. The Chinese consumer finance sector has gone through a corona-induced extreme stress test in 1H20. The sector has proved to be more often than not value destructive for public market investors and continues to remain hostage to regulatory change. While Lufax has several attractive attributes, it is a business in transition which magnifies the risk profile.  

Supun Walpola

In our previous notes, we suggested that Ant’s medium-term revenue and margins are likely to be driven by its CreditTech business (refer our notes <a href="https://www.smartkarma.com/insights/ant-group-early-thoughts-on-the-ipo-alipay-is-not-the-cash-cow-here" target="_blank" data-smartkarma-citation="insights:41591" rel="noopener">Ant Group: Early Thoughts on the IPO – Alipay Is NOT the Cash Cow Here</a> and <a href="https://www.smartkarma.com/insights/ant-group-ipo-credittech-to-drive-medium-term-growth-and-margins" target="_blank" data-smartkarma-citation="insights:43010" rel="noopener">Ant Group IPO: CreditTech to Drive Medium-Term Growth and Margins</a>).However, Ant had left out several key pieces of information about its CreditTech business from the IPO prospectus, including its revenue and cost structures, margins, and even the number of customers. In this insight, we compare Ant’s CreditTech business with its listed peers, <a href="https://www.smartkarma.com/entities/lexinfintech-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26036:1" rel="noopener">Lexinfintech Holdings (LX US)</a> and <a href="https://www.smartkarma.com/entities/360-finance-inc" target="_blank" data-smartkarma-citation="entities:27756:1" rel="noopener">360 Finance, Inc. (QFIN US)</a>, in an attempt to get an insight into some of these missing pieces of information.

In our previous notes, we suggested that Ant’s medium-term revenue and margins are likely to be driven by its CreditTech business (refer our notes Ant Group: Early Thoughts on the IPO – Alipay Is NOT the Cash Cow Here and Ant Group IPO: CreditTech to Drive Medium-Term Growth and Margins).However, Ant had left out several key pieces of information about its CreditTech business from the IPO prospectus, including its revenue and cost structures, margins, and even the number of customers. In this insight, we compare Ant’s CreditTech business with its listed peers, Lexinfintech Holdings (LX US) and 360 Finance, Inc. (QFIN US), in an attempt to get an insight into some of these missing pieces of information.    

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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 Bottom-Up

<ul class="">
<li>JD.com (JD) acquired 100% of Five Star, a store chain of household appliance.</li>
<li>Xiaomi (1810 HK)’s smartphone sales decreased by 35% YoY in 2Q20.</li>
<li>The State Post Bureau of China announced that the revenue from express parcel increased by 23.5% YoY in 2Q20 versus a decrease of 0.6% YoY in 1Q20.</li>
<li>The National Development and Reform Commission requires internet broadband providers to reduce prices by 15% for corporate users.</li>
</ul>


JD.com (JD) acquired 100% of Five Star, a store chain of household appliance.
Xiaomi (1810 HK)’s smartphone sales decreased by 35% YoY in 2Q20.
The State Post Bureau of China announced that the revenue from express parcel increased by 23.5% YoY in 2Q20 versus a decrease of 0.6% YoY in 1Q20.
The National Development and Reform Commission requires internet broadband providers to reduce prices by 15% for corporate users.


China Internet Weekly (3Aug2020): JD Acquired Appliance Store, Xiaomi Phone Sales Plunged

<a href="https://www.smartkarma.com/entities/360-finance-inc" target="_blank" data-smartkarma-citation="entities:27756:1" rel="noopener">360 Finance, Inc. (QFIN US)</a> is a leading online consumer lending platform and the finance partner of the 360 Group. <a href="https://www.smartkarma.com/entities/9f-inc" target="_blank" data-smartkarma-citation="entities:28238:1" rel="noopener">9F Inc (JFG US)</a>, a P2P lending platform, is the largest online consumer finance platform among the independent marketplace lending platforms in China, as measured by outstanding loan balance as of 31 December 2018.<div class="content-highlight">The Chinese consumer finance sector has gone through a corona-induced extreme stress test in 1Q20. While the industry remains hostage to regulations, we believe that the long 360 Finance/short 9F is an attractive pair trade for investors keen on exposure to the Chinese online consumer finance industry. </div>

360 Finance, Inc. (QFIN US) is a leading online consumer lending platform and the finance partner of the 360 Group. 9F Inc (JFG US), a P2P lending platform, is the largest online consumer finance platform among the independent marketplace lending platforms in China, as measured by outstanding loan balance as of 31 December 2018.The Chinese consumer finance sector has gone through a corona-induced extreme stress test in 1Q20. While the industry remains hostage to regulations, we believe that the long 360 Finance/short 9F is an attractive pair trade for investors keen on exposure to the Chinese online consumer finance industry. 

China Consumer Finance Pair Trade: Long 360 Finance/Short 9F

China

360 Finance, Inc. operates as a holding company. The Company, through its subsidiaries, provides a digital finance platform to render loans and capital contributions. 360 Finance serves clients in China.

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360 Finance, Inc. (QFIN US)

Lufax IPO: Peer Comparison Reveals Change in Strategy Weighs Heavy on Company Performance

In this insight, we compare and contrast Lufax's retail credit business against its peers Ant, 360 Finance and LexinFintech to examine the...

Shifara Samsudeen, FCMA, CGMA

Lufax IPO Initiation: Lost in Transition

We find it hard to be enthused by the Lufax story as its heavily reliant on a sector that has repeatedly been subject to regulatory blows which led...

Arun George

Ant Group IPO: Ant Vs CreditTech Peers

In our previous notes, we suggested that Ant’s medium-term revenue and margins are likely to be driven by its CreditTech business (refer our notes...

Supun Walpola

China Internet Weekly (3Aug2020): JD Acquired Appliance Store, Xiaomi Phone Sales Plunged

JD.com (JD) acquired 100% of Five Star, a store chain of household appliance. Xiaomi (1810 HK)’s smartphone sales decreased by 35% YoY in...

Ming Lu

China Consumer Finance Pair Trade: Long 360 Finance/Short 9F

360 Finance, Inc. (QFIN US) is a leading online consumer lending platform and the finance partner of the 360 Group. 9F Inc (JFG US), a P2P lending...

Arun George

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