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

<div><p>TDCX Inc, a Singapore-headquartered digital customer experience (CX) provider, is looking to raise up to US$338m in its upcoming US IPO.</p></div><div><p>TDCX provides outsourcing services to clients in new economy sectors and traditional blue-chip clients undergoing digital transformation. As of Jun 21, it served 43 global clients and with 114 active campaigns. The firm has offices located in 10 geographies across Asia, Europe and Latin America, namely, Singapore, the Philippines, Malaysia, Thailand, China, Japan, Spain, India, Columbia and Romania.</p></div><div><p>TDCX has recorded very strong growth with revenue, EBITDA and PAT having increased by 2.5x over FY18-20. In addition, Facebook and Airbnb, combined, contributed 60.4% and 62.3% of TDCX’s total revenue for FY20 and 1H21. </p></div><div><p>We have covered various aspects of the deal in our earlier note <a href="https://www.smartkarma.com/insights/tdcx-inc-pre-ipo-tearsheet" target="_blank" rel="noopener">TDCX Inc. Pre-IPO Tearsheet</a> and <a href="https://www.smartkarma.com/insights/tdcx-inc-pre-ipo-past-growth-looks-good-the-rest-is-iffy-including-the-founders-s-325m-payout" target="_blank" rel="noopener">TDCX Inc. Pre-IPO - Past Growth Looks Good, the Rest Is Iffy, Including the Founders S$325m Payout</a>.</p></div><div><p>In this note we will talk about valuations</p></div>

TDCX Inc, a Singapore-headquartered digital customer experience (CX) provider, is looking to raise up to US$338m in its upcoming US IPO.TDCX provides outsourcing services to clients in new economy sectors and traditional blue-chip clients undergoing digital transformation. As of Jun 21, it served 43 global clients and with 114 active campaigns. The firm has offices located in 10 geographies across Asia, Europe and Latin America, namely, Singapore, the Philippines, Malaysia, Thailand, China, Japan, Spain, India, Columbia and Romania.TDCX has recorded very strong growth with revenue, EBITDA and PAT having increased by 2.5x over FY18-20. In addition, Facebook and Airbnb, combined, contributed 60.4% and 62.3% of TDCX’s total revenue for FY20 and 1H21. We have covered various aspects of the deal in our earlier note TDCX Inc. Pre-IPO Tearsheet and TDCX Inc. Pre-IPO - Past Growth Looks Good, the Rest Is Iffy, Including the Founders S$325m Payout.In this note we will talk about valuations

TDCX Inc. Pre-IPO - Largest Client Is Growing Faster and Trading Cheaper

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

<p>Over 50% of allocations are in the US with the bulk of the remainder split between Japan, China &amp; HK and the major European nations.  The EMEA overweight is comprised mainly of the UK, Netherlands, France and Germany, with active managers running underweights in the US, China &amp; HK, Australia and Japan.</p><p>UK allocations hover around their lowest levels in history, though managers remain stubbornly overweight compared to the MSCI AC World index.  A total of 62% of managers are overweight the UK at an average +1.88% above benchmark.  Global Value investors are approaching their largest ever overweight in UK stocks of 3.64% above benchmark.</p><p>Another month, another slump in Japan exposure.  Average weights in Japan stand at an all-time low of 5.06% with 85.5% of funds exposed (another low). <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony Corp (6758 JP)</a> and <a href="https://www.smartkarma.com/entities/kddi-corp" target="_blank" data-smartkarma-citation="entities:639:1" rel="noopener">KDDI Corp (9433 JP)</a> are the most widely held stocks, with 23% and 21% of funds holding a position.</p><p>Tech exposure is at record highs, though this is matched by a record underweight of -0.47%.  Indeed, the percentage of funds who are overweight technology has fallen to below 50% for the first time since the end of 2018, a sign that Global managers are tilting their portfolios away from Tech.</p><p>German Industrials allocations have hit a 4-year high as more Global investors add exposure to the sector. <a href="https://www.smartkarma.com/entities/deutsche-post-ag" target="_blank" data-smartkarma-citation="entities:21608:1" rel="noopener">Deutsche Post AG (DPW GR)</a> and <a href="https://www.smartkarma.com/entities/siemens-ag" target="_blank" data-smartkarma-citation="entities:21713:1" rel="noopener">Siemens AG (SIE GR)</a> were the key stocks behind the move, with 4.2% and 2.4% of funds adding exposure over the last 6-months.</p><p>Alibaba has seen closures by some of the larger holders in our analysis, led by American Funds Capital World Fund (-$1.1bn) and New Economy Fund (-$451m).  Though closures have dominated, selected funds have opened exposure during this period of volatility, including Invesco's Global Focus Fund and Liontrust's Global Income Fund.</p>

Over 50% of allocations are in the US with the bulk of the remainder split between Japan, China &amp; HK and the major European nations.  The EMEA overweight is comprised mainly of the UK, Netherlands, France and Germany, with active managers running underweights in the US, China &amp; HK, Australia and Japan.UK allocations hover around their lowest levels in history, though managers remain stubbornly overweight compared to the MSCI AC World index.  A total of 62% of managers are overweight the UK at an average +1.88% above benchmark.  Global Value investors are approaching their largest ever overweight in UK stocks of 3.64% above benchmark.Another month, another slump in Japan exposure.  Average weights in Japan stand at an all-time low of 5.06% with 85.5% of funds exposed (another low). Sony Corp (6758 JP) and KDDI Corp (9433 JP) are the most widely held stocks, with 23% and 21% of funds holding a position.Tech exposure is at record highs, though this is matched by a record underweight of -0.47%.  Indeed, the percentage of funds who are overweight technology has fallen to below 50% for the first time since the end of 2018, a sign that Global managers are tilting their portfolios away from Tech.German Industrials allocations have hit a 4-year high as more Global investors add exposure to the sector. Deutsche Post AG (DPW GR) and Siemens AG (SIE GR) were the key stocks behind the move, with 4.2% and 2.4% of funds adding exposure over the last 6-months.Alibaba has seen closures by some of the larger holders in our analysis, led by American Funds Capital World Fund (-$1.1bn) and New Economy Fund (-$451m).  Though closures have dominated, selected funds have opened exposure during this period of volatility, including Invesco's Global Focus Fund and Liontrust's Global Income Fund.

Global Fund Positioning Update:  Japan Lows, US Highs, UK Value Rotation, Tencent & Alibaba Exit

TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Equity Bottom-Up

<p>In between earnings seasons, we are trying to catch up on the flurry of TMT IPOs over the past few months that have caught our eye. Why Digital Ocean? We're pretty big Amazon bulls cause of AWS, so when we heard there was this mini-AWS that the developer community swears by, had 30%+ EBITDA margins, was accelerating growth by growing dollar retention rates and ARPUs...we had to learn more. Strikes us at the type of business that could be a 5 to 10-bagger over the next year or two. </p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</p></div>

In between earnings seasons, we are trying to catch up on the flurry of TMT IPOs over the past few months that have caught our eye. Why Digital Ocean? We're pretty big Amazon bulls cause of AWS, so when we heard there was this mini-AWS that the developer community swears by, had 30%+ EBITDA margins, was accelerating growth by growing dollar retention rates and ARPUs...we had to learn more. Strikes us at the type of business that could be a 5 to 10-bagger over the next year or two. Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>Alphabet is showing absolutely no signs of slowing down as it reported yet another all-around beat with a phenomenal performance of Google Services.</li><li>With digital advertising expenditure rising, the company generated $57 billion from Google Service, a staggering 63.1% growth.</li><li>YouTube’s performance was the highlight of the quarter as its ad revenues rose 83.7% and also, YouTube shorts surpassed 15 billion daily views.</li></ul>

Alphabet is showing absolutely no signs of slowing down as it reported yet another all-around beat with a phenomenal performance of Google Services.With digital advertising expenditure rising, the company generated $57 billion from Google Service, a staggering 63.1% growth.YouTube’s performance was the highlight of the quarter as its ad revenues rose 83.7% and also, YouTube shorts surpassed 15 billion daily views.

<p>The headline for Amazon’s quarter was that its revenue growth decelerated 1700bps to 24% YoY , and appears set to decelerate another 1000bps in 3Q. Tough comps people. Tough comps.</p><p>The company has to invest more and more money to keep up with demand…historically, these are the times you invest in Amazon, when its going through capacity buildouts…its just never happened before that Amazon has had ongoing investment cycles for multiple years. In the end…the absolute size and profitability of the business will be larger. It might just take 2-3 quarters to prove out.</p><p>In the meantime, its higher margin AWS and Advertising businesses are ACCELERATING. AWS on a $59B runrate, growing 37% (500bps acceleration QoQ), Advertising on a $32B runrate, growing 87% (1400bps acceleration). We value these two businesses at ~2T….which is 30% ahead of the current market cap. We think retail is also worth ~$1T, which is what get us to our $3T valuation, which equates to $6,000 a share. </p><div class="content-highlight"><p>Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</p></div>

The headline for Amazon’s quarter was that its revenue growth decelerated 1700bps to 24% YoY , and appears set to decelerate another 1000bps in 3Q. Tough comps people. Tough comps.The company has to invest more and more money to keep up with demand…historically, these are the times you invest in Amazon, when its going through capacity buildouts…its just never happened before that Amazon has had ongoing investment cycles for multiple years. In the end…the absolute size and profitability of the business will be larger. It might just take 2-3 quarters to prove out.In the meantime, its higher margin AWS and Advertising businesses are ACCELERATING. AWS on a $59B runrate, growing 37% (500bps acceleration QoQ), Advertising on a $32B runrate, growing 87% (1400bps acceleration). We value these two businesses at ~2T….which is 30% ahead of the current market cap. We think retail is also worth ~$1T, which is what get us to our $3T valuation, which equates to $6,000 a share. Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

Amazon 2Q21: Pay Attention to AWS and Advertising

United States

Alphabet Inc. operates as a holding company. The Company, through its subsidiaries, provides web-based search, advertisements, maps, software applications, mobile operating systems, consumer content, enterprise solutions, commerce, and hardware products.

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Alphabet (GOOGL US)

TDCX Inc. Pre-IPO - Largest Client Is Growing Faster and Trading Cheaper

TDCX Inc, a Singapore-headquartered digital customer experience (CX) provider, is looking to raise up to US$338m in its upcoming US IPO.

Sumeet Singh

Global Fund Positioning Update: Japan Lows, US Highs, UK Value Rotation, Tencent & Alibaba Exit

A detailed look at investor positioning among 380 active Global strategies, covering the major themes in country, sector and stock exposure.

Steven Holden

Recent IPO Insights: Digital Ocean

Why Digital Ocean? When we heard there was this mini-AWS that the developer community swears by, had 30%+ EBITDA margins, was accelerating net...

Aaron Gabin

Alphabet Inc - Investment Thesis

Alphabet is showing absolutely no signs of slowing down as it reported yet another all-around beat with a phenomenal performance of Google...

Baptista Research

Amazon 2Q21: Pay Attention to AWS and Advertising

Retail decelerated ALOT. In the meantime, its higher margin AWS and Advertising businesses are ACCELERATING. We value these two businesses at...

Aaron Gabin

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