Equity Analyst, LightStream Research

Oshadhi Kumarasiri

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.

Event-Driven

<ul>
<li>State run TV Channel, CCTV aired a documentary last week about <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group (6688 HK)</a>’s involvement in a corruption scandal.</li>
<li>This puts Ant Group’s Consumer Finance business in a precarious position leading up to a much needed capital raising to complete the business restructure.</li>
<li>As a result, Ant Group could be forced to surrender more than 50% of the ownership share of Huabei and Jiebei to state controlled entities.</li>
</ul>


State run TV Channel, CCTV aired a documentary last week about Ant Financial Services Group (6688 HK)’s involvement in a corruption scandal.
This puts Ant Group’s Consumer Finance business in a precarious position leading up to a much needed capital raising to complete the business restructure.
As a result, Ant Group could be forced to surrender more than 50% of the ownership share of Huabei and Jiebei to state controlled entities.


Ant Group Corruption Scandal: Could Be a Ploy to Force Ant to Surrender Huabei and Jiebei Businesses

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Hang Seng China Enterprises Index / Event-Driven

Hang Seng China Enterprises Index (HSCEI INDEX)

<ul>
<li>With the 2021 futures expiring in 2 weeks, the focus now shifts to the HSCEI dividend futures expiring in 2022 where we see a fair value of 240.76 DIPS.</li>
<li>The current market is trading very close to our fair value for 2022 but there are a lot of potential catalysts that could result in a big move lower.</li>
<li>There are fewer catalysts for the 2022 futures to move higher. The regulatory changes in China plus the HFCAA could lead to the 2023 futures trading cheaper to 2022.</li>
</ul>


With the 2021 futures expiring in 2 weeks, the focus now shifts to the HSCEI dividend futures expiring in 2022 where we see a fair value of 240.76 DIPS.
The current market is trading very close to our fair value for 2022 but there are a lot of potential catalysts that could result in a big move lower.
There are fewer catalysts for the 2022 futures to move higher. The regulatory changes in China plus the HFCAA could lead to the 2023 futures trading cheaper to 2022.


HSCEI Dividend Futures: 2022 Close to Fair; Sell 22/23 Steepener

Shifara Samsudeen, FCMA, CGMA

Private Capital Markets

<ul>
<li>In this original, we have provided an overview and an analysis of the top 10 private consumer finance companies in APAC with a total equity value of more than US$1bn.  </li>
<li>We have provided an in-depth analysis of these 10 companies (based on the available info) including their business models, lending products, monetisation, key drivers, funding and valuation.</li>
<li>In addition, we have also discussed their potential IPO plans and timelines as well as investment opportunities.</li>
</ul>


In this original, we have provided an overview and an analysis of the top 10 private consumer finance companies in APAC with a total equity value of more than US$1bn.  
We have provided an in-depth analysis of these 10 companies (based on the available info) including their business models, lending products, monetisation, key drivers, funding and valuation.
In addition, we have also discussed their potential IPO plans and timelines as well as investment opportunities.


APAC Notable Consumer Finance Private Companies

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

<ul>
<li>Paytm (PAYTM IN) raised around US$2.5bn via selling a mix of primary and secondary shares in its India IPO.</li>
<li>The company is backed by <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group (6688 HK)</a>, <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> and counts <a href="https://www.smartkarma.com/entities/berkshire-hathaway-inc-cl-a" target="_blank" data-smartkarma-citation="entities:1044:1" rel="noopener">Berkshire Hathaway Inc Cl A (BRK/A US)</a> among its investors.</li>
<li>In this note, we will talk about the subscription levels and the trading dynamics.</li>
</ul>


Paytm (PAYTM IN) raised around US$2.5bn via selling a mix of primary and secondary shares in its India IPO.
The company is backed by Ant Financial Services Group (6688 HK), Softbank Group (9984 JP) and counts Berkshire Hathaway Inc Cl A (BRK/A US) among its investors.
In this note, we will talk about the subscription levels and the trading dynamics.


Paytm IPO Trading - Largest IPO with Lowest Coverage, Skipped by Domestics

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.

<p><a href="https://www.smartkarma.com/entities/paytm-mobile-solutions-pvt-ltd" target="_blank" data-smartkarma-citation="entities:26149:1" rel="noopener">Paytm (PAYTM IN)</a>, formally known as One97 Communications, is India’s largest payments platform based on the number of consumers, number of merchants, number of transactions and revenue as of 31 March 2021, according to RedSeer. Paytm has an overall payments transaction volume market share of 40%, and wallet payments transaction market share of 65-70% in India as of FY21, according to RedSeer.Paytm’s shareholders include <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group (6688 HK)</a> (29.6% of outstanding shares), Softbank Vision Fund (18.3%), <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a> (7.2%) and <a href="https://www.smartkarma.com/entities/berkshire-hathaway-inc-cl-b" target="_blank" data-smartkarma-citation="entities:8635:1" rel="noopener">Berkshire Hathaway Inc Cl B (BRK/B US)</a> (2.8%).  </p><p>Paytm will launch its IPO on 8 November at an indicative price range of Rs2,080-2,150 per share. The IPO comprises a primary raise of Rs83,000 million ($1.1 billion) and a secondary raise up to Rs100,000 million ($1.3 billion). The total IPO proceeds of $2.4 billion are around 10% higher than its earlier target. </p><p>In <a href="https://www.smartkarma.com/insights/paytm-ipo-initiation-a-payments-led-super-app" target="_blank" data-smartkarma-citation="insights:54983" rel="noopener">Paytm IPO Initiation: A Payments-Led Super-App</a>, we stated as India’s largest payments platform, Paytm is well placed to benefit from this structural tailwind. The advent of UPI has increased competition (Google Pay, PhonePe, <a href="https://www.smartkarma.com/entities/one-mobikwik-systems-ltd" target="_blank" data-smartkarma-citation="entities:33952:1" rel="noopener">One Mobikwik Systems (1235487D IN)</a>) but Paytm is also leveraging its dominance in digital payments to build a synergistic ecosystem of complementary services, resulting in a strong claim for the “super-app” tag. While the COVID-19 pandemic was disruptive particularly to the non-payments business, Paytm should return to growth as the impact of the pandemic wanes and vaccination rates rise in India. </p><div class="content-highlight"><p>In this note, we look at the updated prospectus which outlines the 1QFY22 results (for the quarter ending June) and recent developments. Overall, the recent results show a strong return to growth, reducing loss margin and reinforce our view that Paytm has attractive fundamentals. We will discuss valuation in our next note.  </p></div>

Paytm (PAYTM IN), formally known as One97 Communications, is India’s largest payments platform based on the number of consumers, number of merchants, number of transactions and revenue as of 31 March 2021, according to RedSeer. Paytm has an overall payments transaction volume market share of 40%, and wallet payments transaction market share of 65-70% in India as of FY21, according to RedSeer.Paytm’s shareholders include Ant Financial Services Group (6688 HK) (29.6% of outstanding shares), Softbank Vision Fund (18.3%), Alibaba Group (BABA US) (7.2%) and Berkshire Hathaway Inc Cl B (BRK/B US) (2.8%).  Paytm will launch its IPO on 8 November at an indicative price range of Rs2,080-2,150 per share. The IPO comprises a primary raise of Rs83,000 million ($1.1 billion) and a secondary raise up to Rs100,000 million ($1.3 billion). The total IPO proceeds of $2.4 billion are around 10% higher than its earlier target. In Paytm IPO Initiation: A Payments-Led Super-App, we stated as India’s largest payments platform, Paytm is well placed to benefit from this structural tailwind. The advent of UPI has increased competition (Google Pay, PhonePe, One Mobikwik Systems (1235487D IN)) but Paytm is also leveraging its dominance in digital payments to build a synergistic ecosystem of complementary services, resulting in a strong claim for the “super-app” tag. While the COVID-19 pandemic was disruptive particularly to the non-payments business, Paytm should return to growth as the impact of the pandemic wanes and vaccination rates rise in India. In this note, we look at the updated prospectus which outlines the 1QFY22 results (for the quarter ending June) and recent developments. Overall, the recent results show a strong return to growth, reducing loss margin and reinforce our view that Paytm has attractive fundamentals. We will discuss valuation in our next note.  

China

Ant Group Co., Ltd. develops online payment platforms. The Company produces credit system and financial services platforms which provide consumers and small businesses with safe and convenient inclusive financial services globally. Ant Group provides its services worldwide.

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Ant Group (6688 HK)

Ant Group Corruption Scandal: Could Be a Ploy to Force Ant to Surrender Huabei and Jiebei Businesses

With Ant’s Consumer Finance business possibly facing the same fate as Yu’e Bao, Ant Group could be forced to surrender more than 50% of the...

Oshadhi Kumarasiri

HSCEI Dividend Futures: 2022 Close to Fair; Sell 22/23 Steepener

The HSCEI 2022 dividend futures are trading close to fair but there are a lot more negative catalysts that will have a bigger impact than positive...

Brian Freitas

APAC Notable Consumer Finance Private Companies

In this original, we provide an overview and analysis of the top 10 private consumer finance companies in APAC with a total equity value of more...

Shifara Samsudeen, FCMA, CGMA

Paytm IPO Trading - Largest IPO with Lowest Coverage, Skipped by Domestics

Paytm (PAYTM IN) raised around US$2.5bn via selling a mix of primary and secondary shares in its India IPO. In this note, we will talk about the...

Sumeet Singh

Paytm IPO: Bright Spot

Paytm will launch its IPO on 8 November to raise $2.4 bn. The updated prospectus which outlines the 1QFY22 results and recent developments...

Arun George

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