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

<p>The Chinese financial technology platform <a href="https://www.smartkarma.com/entities/bairong" target="_blank" data-smartkarma-citation="entities:31486:1" rel="noopener">Bairong (1569395D CH)</a>  started trading on the Hong Kong Stock Exchange on 31<sup>st</sup> March 2021. Bairong priced its IPO at HK$31.8 per share, at the upper end of the indicative IPO price range of HK$26.5-31.8 per share.</p><p>At the above price, Bairong raised net proceeds of HK$3.76bn (US$454.5m) at a market capitalisation of HK$15.8bn and an enterprise value of HK$11.8bn. Despite the company’s IPO being priced attractively, Bairong’s shares slumped at its HK debut, closing 16% lower than its final IPO price at HK$26.7 per share at the end of first-day trading.</p><p>As Beijing has tightened regulations on the country’s fintech sector, investors have become wary of these impacts on Bairong’s business. Bairong’s plans to use the IPO proceeds on funding its business expansion, R&amp;D and other general corporate purposes.</p>

The Chinese financial technology platform Bairong (1569395D CH)  started trading on the Hong Kong Stock Exchange on 31st March 2021. Bairong priced its IPO at HK$31.8 per share, at the upper end of the indicative IPO price range of HK$26.5-31.8 per share.At the above price, Bairong raised net proceeds of HK$3.76bn (US$454.5m) at a market capitalisation of HK$15.8bn and an enterprise value of HK$11.8bn. Despite the company’s IPO being priced attractively, Bairong’s shares slumped at its HK debut, closing 16% lower than its final IPO price at HK$26.7 per share at the end of first-day trading.As Beijing has tightened regulations on the country’s fintech sector, investors have become wary of these impacts on Bairong’s business. Bairong’s plans to use the IPO proceeds on funding its business expansion, R&amp;D and other general corporate purposes.

Bairong: Shares Slip Further on Regulatory Concerns; Current Multiples Attractive to Make an Entry

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.

<div><p><a href="https://www.smartkarma.com/entities/linklogis" target="_blank" data-smartkarma-citation="entities:31126:1" rel="noopener">Linklogis (9959 HK)</a> is a leading technology solution provider for supply chain finance in China. Its solutions optimise the payment cycle of supply chain transactions and digitalize the entire workflow of supply chain finance. Linklogis will commence trading on Friday, 9 April. Linklogis priced its IPO at HK$17.58 and <a href="https://inews.hket.com/article/2926566/%E3%80%90%E6%96%B0%E8%82%A1IPO%E3%80%91%E8%81%AF%E6%98%93%E8%9E%8D%E7%A7%91%E6%8A%809959%E6%9A%97%E7%9B%A4%E3%80%80%E7%8F%BE%E5%8D%876-%E3%80%81%E6%97%A9%E6%AE%B5%E6%9B%BE%E8%B7%8C%E8%BF%91%E4%B8%80%E6%88%90?mtc=40001&amp;srkw=IPO%E6%9C%80%E5%BF%AB%E6%9C%80%E9%BD%8A" target="_blank" rel="noopener">currently trading around 6% higher</a> at HK$18.70 in the Futu securities grey market. The grey market performance is a welcome surprise in light of the choppy market conditions and declining market sentiment on Chinese tech names. The most recent HKEx tech IPO, <a href="https://www.smartkarma.com/entities/bairong" target="_blank" data-smartkarma-citation="entities:31486:1" rel="noopener">Bairong (1569395D CH)</a>, closed -16% below its IPO price on the first day and has not yet recovered.    </p></div><div><p>In <a href="https://www.smartkarma.com/insights/linklogis-ipo-initiation-isupply" target="_blank" data-smartkarma-citation="insights:47017" rel="noopener">Linklogis IPO Initiation: ISupply</a>, we stated that Linklogis is an attractive play on China’s supply chain finance market by combining a sensible monetisation model, high customer retention rate (good revenue visibility) and strong operating leverage. In <a href="https://www.smartkarma.com/insights/linklogis-ipo-every-little-helps" target="_blank" data-smartkarma-citation="insights:49480" rel="noopener">Linklogis IPO: Every Little Helps</a>, we noted that based on the PHIP which discloses the 2020 results and recent developments, we continue to believe that Linklogis’ fundamentals are attractive. In <a href="https://www.smartkarma.com/insights/linklogis-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:49693" rel="noopener">Linklogis IPO: Valuation Insights</a>, we noted that the IPO price range is reasonable.</p></div><div><div><div class="content-highlight"><p>Updating for the final IPO net raise, our base-case DCF derived price target of HK$19.28 per share. Our DCF sensitivity analysis shows that the IPO price remains reasonable and the grey market factors in achievable market share and margin forecasts. We continue to think that the IPO price represents good value. </p></div></div></div>

Linklogis (9959 HK) is a leading technology solution provider for supply chain finance in China. Its solutions optimise the payment cycle of supply chain transactions and digitalize the entire workflow of supply chain finance. Linklogis will commence trading on Friday, 9 April. Linklogis priced its IPO at HK$17.58 and currently trading around 6% higher at HK$18.70 in the Futu securities grey market. The grey market performance is a welcome surprise in light of the choppy market conditions and declining market sentiment on Chinese tech names. The most recent HKEx tech IPO, Bairong (1569395D CH), closed -16% below its IPO price on the first day and has not yet recovered.    In Linklogis IPO Initiation: ISupply, we stated that Linklogis is an attractive play on China’s supply chain finance market by combining a sensible monetisation model, high customer retention rate (good revenue visibility) and strong operating leverage. In Linklogis IPO: Every Little Helps, we noted that based on the PHIP which discloses the 2020 results and recent developments, we continue to believe that Linklogis’ fundamentals are attractive. In Linklogis IPO: Valuation Insights, we noted that the IPO price range is reasonable.Updating for the final IPO net raise, our base-case DCF derived price target of HK$19.28 per share. Our DCF sensitivity analysis shows that the IPO price remains reasonable and the grey market factors in achievable market share and margin forecasts. We continue to think that the IPO price represents good value. 

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.

<div>
<p>Linklogis, a technology solution provider for supply chain finance in China raised around US$1bn in its Hong Kong IPO. Its early investors include Tencent, GIC and Standard Chartered Bank.</p>
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<div>
<p>We have covered various aspects of the deal in our earlier notes,</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/linklogis-pre-ipo-the-positives-fast-growing-blockchain-driven-supply-chain-financier" target="_blank" rel="noopener">Linklogis Pre-IPO - The Positives - Fast Growing Blockchain Driven Supply Chain Financier,</a> </li>
<li><a href="https://www.smartkarma.com/insights/linklogis-pre-ipo-the-negatives-inconsistent-growth-and-margins-well-funded-competitors" target="_blank" rel="noopener">Linklogis Pre-IPO - The Negatives - Inconsistent Growth and Margins, Well Funded Competitors, and</a></li>
<li><a href="https://www.smartkarma.com/insights/linklogis-pre-ipo-earnings-forecast-peer-comparison-and-first-stab-at-valuation" target="_blank" rel="noopener">Linklogis Pre-IPO - Earnings Forecast, Peer Comparison and First Stab at Valuation</a></li>
<li><a href="https://www.smartkarma.com/insights/linklogis-pre-ipo-phip-updates-nothing-to-complain-about" target="_blank" rel="noopener">Linklogis Pre-IPO - PHIP Updates - Nothing to Complain About</a></li>
<li><a href="https://www.smartkarma.com/insights/linklogis-ipo-pricey-for-a-reason" target="_blank" rel="noopener">Linklogis IPO - Pricey for a Reason</a></li>
</ul>
</div>
<div>
<p>In this note, we will talk about deal dynamics and updates since our last note.</p>
</div>


Linklogis, a technology solution provider for supply chain finance in China raised around US$1bn in its Hong Kong IPO. Its early investors include Tencent, GIC and Standard Chartered Bank.


We have covered various aspects of the deal in our earlier notes,




Linklogis Pre-IPO - The Positives - Fast Growing Blockchain Driven Supply Chain Financier, 
Linklogis Pre-IPO - The Negatives - Inconsistent Growth and Margins, Well Funded Competitors, and
Linklogis Pre-IPO - Earnings Forecast, Peer Comparison and First Stab at Valuation
Linklogis Pre-IPO - PHIP Updates - Nothing to Complain About
Linklogis IPO - Pricey for a Reason



In this note, we will talk about deal dynamics and updates since our last note.


Linklogis IPO Trading - Decent but Not Hot Demand

<div><p><a href="https://www.smartkarma.com/entities/bairong" target="_blank" data-smartkarma-citation="entities:31486:1" rel="noopener">Bairong (1569395D CH)</a> is a leading independent AI-powered technology platform in China serving the financial services industry. Biarong will commence trading on Wednesday, 31 March. Bairong priced its IPO at HK$31.80 and <a href="https://inews.hket.com/article/2920642/%E3%80%90%E6%96%B0%E8%82%A1IPO%E3%80%91%E7%99%BE%E8%9E%8D%E9%9B%B2%E5%89%B56608%E6%9A%97%E7%9B%A4%E6%BD%9B%E6%B0%B4%E3%80%80%E4%B8%80%E6%89%8B%E5%B8%B3%E9%9D%A2%E8%9D%951400%E5%85%83?mtc=40001&amp;srkw=IPO%E6%9C%80%E5%BF%AB%E6%9C%80%E9%BD%8A" target="_blank" rel="noopener">opened around -9% lower</a> at HK$29 in the grey market. The poor grey market performance is perhaps unsurprisingly in light of the choppy market conditions and declining market sentiment on Chinese tech names. </p></div><div><p>In <a href="https://www.smartkarma.com/insights/bairong-ipo-initiation-creditworthy" target="_blank" data-smartkarma-citation="insights:49249" rel="noopener">Bairong IPO Initiation: Creditworthy</a>, we opined that the good 4Q20 revenue growth exit rate points to recovery. We noted that Bairong has the potential to combine solid growth with profitability and cash generation. We concluded that Bairong is worth a closer look. In <a href="https://www.smartkarma.com/insights/bairong-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:49418" rel="noopener">Bairong IPO: Valuation Insights</a>, we noted that the IPO price range is reasonable.</p></div><div><div><div class="content-highlight"><p>Updating for the final IPO net raise, our base-case DCF derived price target of HK$35.79 per share. Our DCF sensitivity analysis shows that the IPO price remains reasonable and the grey market factors in conservative market share and margin forecasts. For investors with a longer-term horizon, we think that the grey market price represents good value. </p></div></div></div>

Bairong (1569395D CH) is a leading independent AI-powered technology platform in China serving the financial services industry. Biarong will commence trading on Wednesday, 31 March. Bairong priced its IPO at HK$31.80 and opened around -9% lower at HK$29 in the grey market. The poor grey market performance is perhaps unsurprisingly in light of the choppy market conditions and declining market sentiment on Chinese tech names. In Bairong IPO Initiation: Creditworthy, we opined that the good 4Q20 revenue growth exit rate points to recovery. We noted that Bairong has the potential to combine solid growth with profitability and cash generation. We concluded that Bairong is worth a closer look. In Bairong IPO: Valuation Insights, we noted that the IPO price range is reasonable.Updating for the final IPO net raise, our base-case DCF derived price target of HK$35.79 per share. Our DCF sensitivity analysis shows that the IPO price remains reasonable and the grey market factors in conservative market share and margin forecasts. For investors with a longer-term horizon, we think that the grey market price represents good value. 

<div>
<p>Bairong raised around US$508m in its Hong Kong IPO. </p>
</div>
<div>
<p>We have covered various aspects of the deal in our earlier notes:</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/bairong-pre-ipo-the-positives-largest-independent-big-data-analytics-provider" target="_blank" rel="noopener">Bairong Pre-IPO - The Positives - Largest Independent Big-Data Analytics Provider,</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/bairong-pre-ipo-the-negatives-playing-with-its-own-data" target="_blank" rel="noopener">Bairong Pre-IPO - The Negatives - Playing with Its Own Data</a>,</li>
<li><a href="https://www.smartkarma.com/insights/bairong-pre-ipo-earnings-forecast-peer-comparison-and-valuation" target="_blank" rel="noopener">Bairong Pre-IPO - Earnings Forecast, Peer Comparison and Valuation, and</a></li>
<li><a href="https://www.smartkarma.com/insights/bairong-pre-ipo-phip-and-valuation-updates-better-4q20-but-client-data-isn-t-as-encouraging" target="_blank" rel="noopener">Bairong Pre-IPO - PHIP and Valuation Updates - Better 4Q20, but Client Data Isn’t as Encouraging</a></li>
<li><a href="https://www.smartkarma.com/insights/bairong-ipo-decent-valuation-probably-weighed-down-by-regulation" target="_blank" rel="noopener">Bairong IPO - Decent Valuation Probably Weighed Down by Regulation</a></li>
</ul>
</div>
<div>
<p>In this note, we will talk about deal dynamics and updates since our last note.</p>
</div>


Bairong raised around US$508m in its Hong Kong IPO. 


We have covered various aspects of the deal in our earlier notes:




Bairong Pre-IPO - The Positives - Largest Independent Big-Data Analytics Provider, 

Bairong Pre-IPO - The Negatives - Playing with Its Own Data,
Bairong Pre-IPO - Earnings Forecast, Peer Comparison and Valuation, and
Bairong Pre-IPO - PHIP and Valuation Updates - Better 4Q20, but Client Data Isn’t as Encouraging
Bairong IPO - Decent Valuation Probably Weighed Down by Regulation



In this note, we will talk about deal dynamics and updates since our last note.


Bairong IPO Trading - Strong Overall Demand but Comes with Large Retail Allocation

China

Bairong Inc operates as a financial big data analytics solutions provider. The Company provides customer acquisition, loan origination, insurance underwriting, existing portfolio management, non performing loan management, and other services. Bairong provides its services throughout China.

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Bairong (6608 HK)

Bairong: Shares Slip Further on Regulatory Concerns; Current Multiples Attractive to Make an Entry

We believe Bairong's shares are particularly attractive at FY2 EV/Revenue of 4.4x. Beijing's crackdown on fintech sector has impacted the company's...

Shifara Samsudeen, FCMA, CGMA

Linklogis IPO: Trading Debut

Linklogis priced its IPO at HK$17.58 and trading around 6% higher at HK$18.70 in the Futu securities grey market. We continue to think that the IPO...

Arun George

Linklogis IPO Trading - Decent but Not Hot Demand

Linklogis, a technology solution provider for supply chain finance in China raised around US$1bn in its Hong Kong IPO. Its early investors include...

Sumeet Singh

Bairong IPO: Trading Debut

Bairong priced its IPO at HK$31.80 and opened around -9% lower at HK$29 in the grey market. Our DCF sensitivity analysis shows that the grey market...

Arun George

Bairong IPO Trading - Strong Overall Demand but Comes with Large Retail Allocation

Bairong raised around US$508m in its Hong Kong IPO. We have covered various aspects of the deal in our earlier notes. In this note, we will talk...

Sumeet Singh

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