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>
<a href="https://www.smartkarma.com/entities/ventia-services-group-pty-ltd" target="_blank" data-smartkarma-citation="entities:34917:1" rel="noopener">Ventia Services Group Pty (VNT AU)</a>’s two largest shareholders, Apollo Global Management and CIMIC Group, will come off their placement linked lockup soon.</li>
<li>The two largest shareholders together owned nearly 30% of the company and have pared their stake twice this year.</li>
<li>In this note, we will talk about the likely placement and past deal performance.</li>
</ul>



Ventia Services Group Pty (VNT AU)’s two largest shareholders, Apollo Global Management and CIMIC Group, will come off their placement linked lockup soon.
The two largest shareholders together owned nearly 30% of the company and have pared their stake twice this year.
In this note, we will talk about the likely placement and past deal performance.


Ventia Services Group US$450m Placement Lockup Expiry - Past Deals Have Done Well

APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC IPOs & Placements

AUB Group Limited / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/aub-group-limited" target="_blank" data-smartkarma-citation="entities:11179:1" rel="noopener">AUB Group Limited (AUB AU)</a> is looking to raise up to AUD150m (US$100m) in its primary placement. The proceeds will be used to strengthen its balance sheet.</li>
<li>The deal would be a large one to digest at 24 days of three month ADV and dilution of 6.2%.  </li>
<li>In this note, we'll run the deal through our ECM framework and comment on deal dynamics.</li>
</ul>



AUB Group Limited (AUB AU) is looking to raise up to AUD150m (US$100m) in its primary placement. The proceeds will be used to strengthen its balance sheet.
The deal would be a large one to digest at 24 days of three month ADV and dilution of 6.2%.  
In this note, we'll run the deal through our ECM framework and comment on deal dynamics.


AUB Group Placement - Came as a Surprise but Strong Track Record Makes up for It

Director, RaaS Research Group, Research as a Service (RaaS)

RaaS Research Group (RaaS)

Director, RaaS Research Group

Insightful Financial Models and Research Analysis

Research as a Service (RaaS)

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Equity Bottom-Up

<h2>OFX Group Limited</h2>
<p><strong><span style="font-size: 1.2em;">Firms up its global FX services footprint</span></strong></p>
<div>
<p>OFX Group Limited (ASX:OFX) is an Australian-based international money transfer and foreign exchange (FX) services provider servicing consumer and business clients globally via its digital platform. In FY22, OFX facilitated 1.18m transactions across 55 currencies worth A$33.2b. On 1 May 2022, OFX largely completed the A$98m debt- funded acquisition of Firma, a Canadian-based global FX business. Notably, Firma represents OFX’s first major acquisition, is aligned to its strategic focus on the corporate customer and North American geographic segments, and is expected to be 20% EPS accretive in year one. Following record results in FY22 ($147m net operating income (‘NOI’), $44.5m underlying EBITDA, 30.3% EBITDA margin, operating cashflows of $47.6m, free cashflows of $36.1m and $24.5m NPAT), OFX recently disclosed Q1 (June qtr) FY23 financial metrics including 45% total NOI growth (including Firma) and 13% organic NOI growth (excluding Firma) on the pcp, and re- affirmed its FY23 guidance for NOI of $200m-$212m and underlying EBITDA of $55m- $60m. Given the value of the global FX payments services market is ~US$206b and OFX’s market share is &lt;0.05% (with banks/incumbents accounting for ~72%), there is potential for it to capture increased market share.</p>
<div><strong>Business model</strong>
<p>OFX provides competitively priced international money transfers in 55 currencies through its digital platform (complemented by localised 24/7 client support) and global banking partner network. It generates revenue from fee and trading income primarily comprising realised FX transaction margins (i.e. the difference between the FX rate it obtains from its wholesale foreign exchange market providers and the FX rate it charges to customers) and fees. OFX is focused on four customer segments: (1) High-value consumers; (2) Corporates (typically monthly trading); (3) Online sellers (e.g. via Amazon); and (4) Enterprises (large companies requiring cross-border payments for their customers: e.g. WiseTech). OFX’s FY22 revenue was slightly skewed to B2B/corporate (~52%), predominantly from recurring customers (77% of revenue), and geographically split between APAC (55%), North America (29%) and EMEA (16%). Its key strategic growth priorities currently lie in the corporate, on- line seller and enterprise customer segments and North American geographic segment.</p>
<strong>45% NOI growth in June quarter</strong>
<div>
<p>At its recent 11 August AGM, OFX disclosed the following key Q1 (June qtr) FY23 financial information: (1) NOI of $47.9m (up 45% on the pcp) with Firma contributing $10.5m; (2) 13% organic NOI growth on the pcp (i.e. excluding Firma); (3) Corporate segment yoy growth of 83% (including Firma) or 20% (excluding Firma/organic); and (4) $14m debt repayment facilitated by positive free cashflows. OFX also confirmed its FY23 guidance (originally provided on 17 May) for NOI of $200m-$212m and underlying EBITDA of $55m-$60m, and reiterated that it intends to repay the A$100m Firma-acquisition debt in under four years (assuming no further material cash-based investments/acquisitions). In Q1, OFX also completed a new reconciliation engine to enable instant processing of incoming payments.</p>
<strong>Trading at a discount to Wise and premiums to MGI and WU</strong>
<p>OFX is trading at 11x forward (FY23f) EV/EBITDA and 22x FY23f PER (Source: Refinitiv). Whilst there are no ASX-listed pureplay FX services peers, five of OFX’s larger competitors are listed on overseas exchanges, namely Wise plc (formerly ‘TransferWise’) which listed on LSE in July 2021, NASDAQ-listed MoneyGram (MGI), Flywire (FLYW) and Payoneer (PAYO), and NYSE- listed Western Union (WU). OFX currently trades at a significant discount to Wise’s ~29x forward EV/EBITDA and ~54x forward PER, and the forward EV/EBITDA of FLYW and PAYO (~89x and ~36x respectively). Relative to MGI and WU, OFX is trading at a premium on forward EV/EBITDA (vs. ~8x for MGI and ~7x for WU), in-line with MGI on forward PER (~22x), and at a premium to TU’s ~8x forward PER (Source: Refinitiv).</p>
</div>
</div>
</div>

OFX Group Limited
Firms up its global FX services footprint

OFX Group Limited (ASX:OFX) is an Australian-based international money transfer and foreign exchange (FX) services provider servicing consumer and business clients globally via its digital platform. In FY22, OFX facilitated 1.18m transactions across 55 currencies worth A$33.2b. On 1 May 2022, OFX largely completed the A$98m debt- funded acquisition of Firma, a Canadian-based global FX business. Notably, Firma represents OFX’s first major acquisition, is aligned to its strategic focus on the corporate customer and North American geographic segments, and is expected to be 20% EPS accretive in year one. Following record results in FY22 ($147m net operating income (‘NOI’), $44.5m underlying EBITDA, 30.3% EBITDA margin, operating cashflows of $47.6m, free cashflows of $36.1m and $24.5m NPAT), OFX recently disclosed Q1 (June qtr) FY23 financial metrics including 45% total NOI growth (including Firma) and 13% organic NOI growth (excluding Firma) on the pcp, and re- affirmed its FY23 guidance for NOI of $200m-$212m and underlying EBITDA of $55m- $60m. Given the value of the global FX payments services market is ~US$206b and OFX’s market share is &lt;0.05% (with banks/incumbents accounting for ~72%), there is potential for it to capture increased market share.
Business model
OFX provides competitively priced international money transfers in 55 currencies through its digital platform (complemented by localised 24/7 client support) and global banking partner network. It generates revenue from fee and trading income primarily comprising realised FX transaction margins (i.e. the difference between the FX rate it obtains from its wholesale foreign exchange market providers and the FX rate it charges to customers) and fees. OFX is focused on four customer segments: (1) High-value consumers; (2) Corporates (typically monthly trading); (3) Online sellers (e.g. via Amazon); and (4) Enterprises (large companies requiring cross-border payments for their customers: e.g. WiseTech). OFX’s FY22 revenue was slightly skewed to B2B/corporate (~52%), predominantly from recurring customers (77% of revenue), and geographically split between APAC (55%), North America (29%) and EMEA (16%). Its key strategic growth priorities currently lie in the corporate, on- line seller and enterprise customer segments and North American geographic segment.
45% NOI growth in June quarter

At its recent 11 August AGM, OFX disclosed the following key Q1 (June qtr) FY23 financial information: (1) NOI of $47.9m (up 45% on the pcp) with Firma contributing $10.5m; (2) 13% organic NOI growth on the pcp (i.e. excluding Firma); (3) Corporate segment yoy growth of 83% (including Firma) or 20% (excluding Firma/organic); and (4) $14m debt repayment facilitated by positive free cashflows. OFX also confirmed its FY23 guidance (originally provided on 17 May) for NOI of $200m-$212m and underlying EBITDA of $55m-$60m, and reiterated that it intends to repay the A$100m Firma-acquisition debt in under four years (assuming no further material cash-based investments/acquisitions). In Q1, OFX also completed a new reconciliation engine to enable instant processing of incoming payments.
Trading at a discount to Wise and premiums to MGI and WU
OFX is trading at 11x forward (FY23f) EV/EBITDA and 22x FY23f PER (Source: Refinitiv). Whilst there are no ASX-listed pureplay FX services peers, five of OFX’s larger competitors are listed on overseas exchanges, namely Wise plc (formerly ‘TransferWise’) which listed on LSE in July 2021, NASDAQ-listed MoneyGram (MGI), Flywire (FLYW) and Payoneer (PAYO), and NYSE- listed Western Union (WU). OFX currently trades at a significant discount to Wise’s ~29x forward EV/EBITDA and ~54x forward PER, and the forward EV/EBITDA of FLYW and PAYO (~89x and ~36x respectively). Relative to MGI and WU, OFX is trading at a premium on forward EV/EBITDA (vs. ~8x for MGI and ~7x for WU), in-line with MGI on forward PER (~22x), and at a premium to TU’s ~8x forward PER (Source: Refinitiv).




OFX Group Limited - Firms up Its Global FX Services Footprint

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<p>S&amp;P Dow Jones Indices will announce changes to the S&amp;P/ASX 100, <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> and S&amp;P/ASX300 as part of the September index review on 3 September and the changes will be effective after the close of trading on 17 September.</p><p>The review period for the rebalance ends on 20 August, so there are only 3 days to go in the review period with 124 days completed.</p><p>For the ASX100, we see <a href="https://www.smartkarma.com/entities/boral-ltd" target="_blank" data-smartkarma-citation="entities:1487:1" rel="noopener">Boral Ltd (BLD AU)</a> as a potential deletion following the reduction in its free float following <a href="https://www.smartkarma.com/entities/seven-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:803:1" rel="noopener">Seven Group Holdings (SVW AU)</a>'s tender offer. This is the possibility of another change with <a href="https://www.smartkarma.com/entities/steadfast-group-ltd" target="_blank" data-smartkarma-citation="entities:8181:1" rel="noopener">Steadfast (SDF AU)</a> replacing <a href="https://www.smartkarma.com/entities/beach-energy-ltd" target="_blank" data-smartkarma-citation="entities:795:1" rel="noopener">Beach Energy (BPT AU)</a> in the index.</p><p>For the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a>, we see <a href="https://www.smartkarma.com/entities/pinnacle-investment-management" target="_blank" data-smartkarma-citation="entities:20624:1" rel="noopener">Pinnacle Investment Management (PNI AU)</a>, <a href="https://www.smartkarma.com/entities/sealink-travel-group-ltd" target="_blank" data-smartkarma-citation="entities:6400:1" rel="noopener">Sealink Travel (SLK AU)</a>, <a href="https://www.smartkarma.com/entities/de-grey-mining-ltd" target="_blank" data-smartkarma-citation="entities:6192:1" rel="noopener">De Grey Mining (DEG AU)</a> and <a href="https://www.smartkarma.com/entities/amalgamated-holdings-ltd" target="_blank" data-smartkarma-citation="entities:20978:1" rel="noopener">Event Hospitality and Entertainment (EVT AU)</a> as potential inclusions, while <a href="https://www.smartkarma.com/entities/nuix-limited" target="_blank" data-smartkarma-citation="entities:31040:1" rel="noopener">Nuix Limited (NXL AU)</a>, <a href="https://www.smartkarma.com/entities/nrw-holdings-ltd" target="_blank" data-smartkarma-citation="entities:9271:1" rel="noopener">NRW Holdings (NWH AU)</a>, <a href="https://www.smartkarma.com/entities/g8-education-ltd" target="_blank" data-smartkarma-citation="entities:581:1" rel="noopener">G8 Education (GEM AU)</a> and <a href="https://www.smartkarma.com/entities/westgold-resources-ltd" target="_blank" data-smartkarma-citation="entities:24269:1" rel="noopener">Westgold Resources (WGX AU)</a> are potential deletions.</p><p>For the ASX300, potential inclusions are <a href="https://www.smartkarma.com/entities/paladin-energy-ltd" target="_blank" data-smartkarma-citation="entities:10117:1" rel="noopener">Paladin Energy (PDN AU)</a>, <a href="https://www.smartkarma.com/entities/imugene-ltd" target="_blank" data-smartkarma-citation="entities:20276:1" rel="noopener">Imugene Ltd (IMU AU)</a>, <a href="https://www.smartkarma.com/entities/liontown-resources-ltd" target="_blank" data-smartkarma-citation="entities:20488:1" rel="noopener">Liontown Resources (LTR AU)</a>, <a href="https://www.smartkarma.com/entities/betmakers-technology-group-ltd" target="_blank" data-smartkarma-citation="entities:25489:1" rel="noopener">BetMakers Technology Group (BET AU)</a>, <a href="https://www.smartkarma.com/entities/novonix-ltd" target="_blank" data-smartkarma-citation="entities:29093:1" rel="noopener">Novonix Ltd (NVX AU)</a>, <a href="https://www.smartkarma.com/entities/dubber-corp-ltd" target="_blank" data-smartkarma-citation="entities:15396:1" rel="noopener">Dubber Corp Ltd (DUB AU)</a>, <a href="https://www.smartkarma.com/entities/johns-lyng-group-ltd" target="_blank" data-smartkarma-citation="entities:26649:1" rel="noopener">Johns Lyng (JLG AU)</a> and <a href="https://www.smartkarma.com/entities/strike-energy-ltd" target="_blank" data-smartkarma-citation="entities:12473:1" rel="noopener">Strike Energy (STX AU)</a>, while potential deletions are <a href="https://www.smartkarma.com/entities/bubs-australia-ltd" target="_blank" data-smartkarma-citation="entities:6296:1" rel="noopener">Bubs Australia (BUB AU)</a>, <a href="https://www.smartkarma.com/entities/synlait-milk-ltd" target="_blank" data-smartkarma-citation="entities:16298:1" rel="noopener">Synlait Milk (SML NZ)</a>, <a href="https://www.smartkarma.com/entities/integrated-research-ltd" target="_blank" data-smartkarma-citation="entities:6744:1" rel="noopener">Integrated Research (IRI AU)</a>, <a href="https://www.smartkarma.com/entities/maca-ltd" target="_blank" data-smartkarma-citation="entities:11390:1" rel="noopener">Maca Ltd (MLD AU)</a> and <a href="https://www.smartkarma.com/entities/medical-developments-international" target="_blank" data-smartkarma-citation="entities:18644:1" rel="noopener">Medical Developments International (MVP AU)</a>.</p><p>The impact is quite large on the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> expected changes while there could be a large impact on <a href="https://www.smartkarma.com/entities/steadfast-group-ltd" target="_blank" data-smartkarma-citation="entities:8181:1" rel="noopener">Steadfast (SDF AU)</a> if it is included in the ASX100.</p>

S&amp;P Dow Jones Indices will announce changes to the S&amp;P/ASX 100, S&amp;P/ASX 200 (AS51 INDEX) and S&amp;P/ASX300 as part of the September index review on 3 September and the changes will be effective after the close of trading on 17 September.The review period for the rebalance ends on 20 August, so there are only 3 days to go in the review period with 124 days completed.For the ASX100, we see Boral Ltd (BLD AU) as a potential deletion following the reduction in its free float following Seven Group Holdings (SVW AU)'s tender offer. This is the possibility of another change with Steadfast (SDF AU) replacing Beach Energy (BPT AU) in the index.For the S&amp;P/ASX 200 (AS51 INDEX), we see Pinnacle Investment Management (PNI AU), Sealink Travel (SLK AU), De Grey Mining (DEG AU) and Event Hospitality and Entertainment (EVT AU) as potential inclusions, while Nuix Limited (NXL AU), NRW Holdings (NWH AU), G8 Education (GEM AU) and Westgold Resources (WGX AU) are potential deletions.For the ASX300, potential inclusions are Paladin Energy (PDN AU), Imugene Ltd (IMU AU), Liontown Resources (LTR AU), BetMakers Technology Group (BET AU), Novonix Ltd (NVX AU), Dubber Corp Ltd (DUB AU), Johns Lyng (JLG AU) and Strike Energy (STX AU), while potential deletions are Bubs Australia (BUB AU), Synlait Milk (SML NZ), Integrated Research (IRI AU), Maca Ltd (MLD AU) and Medical Developments International (MVP AU).The impact is quite large on the S&amp;P/ASX 200 (AS51 INDEX) expected changes while there could be a large impact on Steadfast (SDF AU) if it is included in the ASX100.

ASX100/200/300 Index Rebalance Preview: Big Impact & Large Shorts

<div><p>S&amp;P Dow Jones Indices will announce changes to the <a href="https://www.smartkarma.com/entities/s-p-asx-200" target="_blank" data-smartkarma-citation="entities:22901:1" rel="noopener">S&amp;P/ASX 200 (AS51 INDEX)</a> as part of the September index review on 3 September and the changes will be effective after the close of trading on 17 September.</p></div><div>We are almost three quarters of the way through the review period. There are 3 potential inclusions at the review - <a href="https://www.smartkarma.com/entities/centuria-capital-group" target="_blank" data-smartkarma-citation="entities:15546:1" rel="noopener">Centuria Capital (CNI AU)</a>, <a href="https://www.smartkarma.com/entities/pinnacle-investment-manageme" target="_blank" data-smartkarma-citation="entities:20624:1" rel="noopener">Wilson (PNI AU)</a> and <a href="https://www.smartkarma.com/entities/sealink-travel-group-ltd" target="_blank" data-smartkarma-citation="entities:6400:1" rel="noopener">Sealink Travel (SLK AU)</a> while the potential deletions are <a href="https://www.smartkarma.com/entities/nuix-limited" target="_blank" data-smartkarma-citation="entities:31040:1" rel="noopener">Nuix Limited (NXL AU)</a>, <a href="https://www.smartkarma.com/entities/nrw-holdings-ltd" target="_blank" data-smartkarma-citation="entities:9271:1" rel="noopener">NRW Holdings (NWH AU)</a> and <a href="https://www.smartkarma.com/entities/g8-education-ltd" target="_blank" data-smartkarma-citation="entities:581:1" rel="noopener">G8 Education (GEM AU)</a>.</div><div></div><div>
<a href="https://www.smartkarma.com/entities/galaxy-resources-ltd" target="_blank" data-smartkarma-citation="entities:13914:1" rel="noopener">Galaxy Resources (GXY AU)</a> is placed in the inclusion zone but is unlikely to be added to the index given its pending merger with <a href="https://www.smartkarma.com/entities/orocobre-ltd" target="_blank" data-smartkarma-citation="entities:3572:1" rel="noopener">Orocobre Ltd (ORE AU)</a>.</div><div></div><div>
<a href="https://www.smartkarma.com/entities/de-grey-mining-ltd" target="_blank" data-smartkarma-citation="entities:6192:1" rel="noopener">De Grey Mining (DEG AU)</a> is a close add and the corresponding deletion is <a href="https://www.smartkarma.com/entities/westgold-resources-ltd" target="_blank" data-smartkarma-citation="entities:24269:1" rel="noopener">Westgold Resources (WGX AU)</a>.</div><div></div><div>There is a large impact expected on the inclusions while the impact on the deletions is lower.</div><div></div><div>For <a href="https://www.smartkarma.com/entities/g8-education-ltd" target="_blank" data-smartkarma-citation="entities:581:1" rel="noopener">G8 Education (GEM AU)</a>, the short interest is close to the estimated passive selling. For the other two deletes, short interest is a lot smaller than the estimated passive selling and there will be more shorts created from now to rebalance implementation day.</div>

S&amp;P Dow Jones Indices will announce changes to the S&amp;P/ASX 200 (AS51 INDEX) as part of the September index review on 3 September and the changes will be effective after the close of trading on 17 September.We are almost three quarters of the way through the review period. There are 3 potential inclusions at the review - Centuria Capital (CNI AU), Wilson (PNI AU) and Sealink Travel (SLK AU) while the potential deletions are Nuix Limited (NXL AU), NRW Holdings (NWH AU) and G8 Education (GEM AU).
Galaxy Resources (GXY AU) is placed in the inclusion zone but is unlikely to be added to the index given its pending merger with Orocobre Ltd (ORE AU).
De Grey Mining (DEG AU) is a close add and the corresponding deletion is Westgold Resources (WGX AU).There is a large impact expected on the inclusions while the impact on the deletions is lower.For G8 Education (GEM AU), the short interest is close to the estimated passive selling. For the other two deletes, short interest is a lot smaller than the estimated passive selling and there will be more shorts created from now to rebalance implementation day.

ASX200 Sep21 Index Rebalance Preview: Large Impact Names

Australia

AUB Group Limited provides financial services. The Company offers equity-based risk management, insurance broking, and specialist underwriting agencies, as well as focuses on risk solutions for clients and strengthening our partners risk advisory capabilities.

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AUB Group Limited (AUB AU)

Ventia Services Group US$450m Placement Lockup Expiry - Past Deals Have Done Well

The deal is now live, with the two investors looking to sell half of their current stake, as we had expected. This will be a very well flagged deal.

Sumeet Singh

AUB Group Placement - Came as a Surprise but Strong Track Record Makes up for It

AUB Group is looking to raise up to AUD150m (US$100m) in its primary placement. In this note, we'll run the deal through our ECM framework and...

Ethan Aw

OFX Group Limited - Firms up Its Global FX Services Footprint

OFX Group Limited Firms up its global FX services footprint OFX Group Limited (ASX:OFX) is an Australian-based international money transfer and...

Research as a Service (RaaS)

ASX100/200/300 Index Rebalance Preview: Big Impact & Large Shorts

There are a lot of changes expected across the ASX100, 200 & 300 indices at the September rebalance. A lot of those stocks will have a large impact...

Brian Freitas

ASX200 Sep21 Index Rebalance Preview: Large Impact Names

We see 3 potential changes to the ASX200 at the Sep rebalance with CNI, PNI and SLK being included and NXL, NRW and GEM being deleted. Passive...

Brian Freitas

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