Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Event-Driven

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In the past several days, it was noted in the local media that <a href="http://www.investchosun.com/site/data/html_dir/2021/11/03/2021110380005.html" target="_blank" rel="noopener">Dunamu</a> is currently in the process of selling at least 200 billion won in the private markets at a valuation of about 10 trillion won. The sellers are the existing financial investors (mostly <a href="https://www.smartkarma.com/entities/hanwha-investment-securiti" target="_blank" data-smartkarma-citation="entities:10558:1" rel="noopener">Hanwha Securities (003530 KS) </a>and other local VC investors) in Dunamu that want to realize fat profits. 
The value of 10 trillion won would be nearly 7x higher than in February 2021 when Dunamu was last valued at 1.5 trillion won (by DSC Investment and Hanwha Investment &amp; Securities). Although Dunamu has yet to make its official announcement on a IPO, we believe that it is highly likely to occur sometime in 2022. At a value of 10 trillion won or more, it could raise more than 1 trillion won through an IPO. 
</div>At a value of 10 trillion won for Dunamu, Hanwha Investment &amp; Securities' 6.15% stake would be worth 615 billion won. <a href="https://www.smartkarma.com/entities/hanwha-investment-securiti" target="_blank" data-smartkarma-citation="entities:10558:1" rel="noopener">Hanwha Securities (003530 KS)</a> currently has a market cap of 1.3 trillion won so its stake in Dunamu would be worth 48% of its market cap.


In the past several days, it was noted in the local media that Dunamu is currently in the process of selling at least 200 billion won in the private markets at a valuation of about 10 trillion won. The sellers are the existing financial investors (mostly Hanwha Securities (003530 KS) and other local VC investors) in Dunamu that want to realize fat profits. 
The value of 10 trillion won would be nearly 7x higher than in February 2021 when Dunamu was last valued at 1.5 trillion won (by DSC Investment and Hanwha Investment &amp; Securities). Although Dunamu has yet to make its official announcement on a IPO, we believe that it is highly likely to occur sometime in 2022. At a value of 10 trillion won or more, it could raise more than 1 trillion won through an IPO. 
At a value of 10 trillion won for Dunamu, Hanwha Investment &amp; Securities' 6.15% stake would be worth 615 billion won. Hanwha Securities (003530 KS) currently has a market cap of 1.3 trillion won so its stake in Dunamu would be worth 48% of its market cap. 

An Update on the Dunamu IPO & Sale of 200 Billion Won in the Private Market At 10 Trillion Won Value

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

Equity Capital Markets

San Francisco-based <a href="https://www.smartkarma.com/entities/amplitude-inc" target="_blank" data-smartkarma-citation="entities:34148:1" rel="noopener">Amplitude (AMPL US)</a> , best-in-class product analytics and digital optimization technology unicorn, filed for a direct listing and expects their Class A common stock to begin trading on September 28, 2021. The company has registered up to ~35.4M shares to sell in the direct listing with the reference price to be announced. Amplitude plans to list their Class A shares on the Nasdaq Capital Market under the symbol “AMPL”. Direct listing means that there will be no book building process and none of the existing shareholders will be subject to 180-day contractual lock-up agreement. Morgan Stanley, Bank of America, Citigroup, KeyBanc Capital Markets, Baird, UBS and William Blair will serve as financial advisors.

San Francisco-based Amplitude (AMPL US) , best-in-class product analytics and digital optimization technology unicorn, filed for a direct listing and expects their Class A common stock to begin trading on September 28, 2021. The company has registered up to ~35.4M shares to sell in the direct listing with the reference price to be announced. Amplitude plans to list their Class A shares on the Nasdaq Capital Market under the symbol “AMPL”. Direct listing means that there will be no book building process and none of the existing shareholders will be subject to 180-day contractual lock-up agreement. Morgan Stanley, Bank of America, Citigroup, KeyBanc Capital Markets, Baird, UBS and William Blair will serve as financial advisors.

Founder-Led Unicorn And Leader In Product Analytics

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

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That trade worked out well.
In my note <a href="https://skr.ma/eEB66" target="_blank" rel="noopener">Microstrategy (MSTR US): "Crypto Through The Tulips"</a> back on the 28 June, I recommended shorting <a href="https://www.smartkarma.com/entities/microstrategy-inc-cl-a" target="_blank" data-smartkarma-citation="entities:14717:1" rel="noopener">Microstrategy Inc Cl A (MSTR US)</a> and going long bitcoin.
MSTR is up 2.3% since, against 30% for BTC.
MSTR has a tendency to issue paper to buy more bitcoins when the stock is at a large premium to its Bitcoin holdings.  As per its <a href="https://www.microstrategy.com/content/dam/website-assets/collateral/financial-documents/press-release-archive/microstrategy-acquires-additional-bitcoins-and-now-holds-over-105000-bitcoins-in-" target="_blank" rel="noopener">21 June 21</a> announcement, MSTR said it held 105,085 bitcoins. That figure remains unchanged.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/228/764/original/image_1404123321631156413189.png?1631156418" class="editor-image img-responsive" data-smartkarma-image-id="228764"></figure>
MSTR's share price was US$123 prior to its initial announcement on the 11 August 2020 it was "adopting Bitcoin as a primary treasury reserve asset".
The current implied value for MSTR's stub ops - selling business intelligence software - is US$158/share, having touched US$141/share, suggesting value was emerging.
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/228/821/original/image_21363881771631163833057.png?1631163833" class="editor-image img-responsive" data-smartkarma-image-id="228821"></figure>
Yet is MSTR the ideal proxy for bitcoin? And just how much legitimacy should be attached to El Salvador giving bitcoin the status of legal tender?
More below the fold.
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That trade worked out well.
In my note Microstrategy (MSTR US): "Crypto Through The Tulips" back on the 28 June, I recommended shorting Microstrategy Inc Cl A (MSTR US) and going long bitcoin.
MSTR is up 2.3% since, against 30% for BTC.
MSTR has a tendency to issue paper to buy more bitcoins when the stock is at a large premium to its Bitcoin holdings.  As per its 21 June 21 announcement, MSTR said it held 105,085 bitcoins. That figure remains unchanged.

MSTR's share price was US$123 prior to its initial announcement on the 11 August 2020 it was "adopting Bitcoin as a primary treasury reserve asset".
The current implied value for MSTR's stub ops - selling business intelligence software - is US$158/share, having touched US$141/share, suggesting value was emerging.

Yet is MSTR the ideal proxy for bitcoin? And just how much legitimacy should be attached to El Salvador giving bitcoin the status of legal tender?
More below the fold.


Microstrategy (MSTR US): Bitcoin's Mainstream/Fringes Balancing Act

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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 Bottom-Up

Despite 78% and 61% rallies in Ethereum and Bitcoin from the Jul 20 lows, Monex stock has continued to decline, falling 10% in that period. It is possible that this is simply blowback from an extremely strong rally since late 2020 but valuations suggest that Monex is at a severe discount to Coinbase.

Despite 78% and 61% rallies in Ethereum and Bitcoin from the Jul 20 lows, Monex stock has continued to decline, falling 10% in that period. It is possible that this is simply blowback from an extremely strong rally since late 2020 but valuations suggest that Monex is at a severe discount to Coinbase.

Robinhood Markets  / Equity Capital Markets

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Our base case valuation of Robinhood is implied market cap of US$25.1 billion or US$29.8 per share, which is 25% lower than the mid-point of the IPO price range (US$40). Given the downside risk, we would AVOID this IPO. 
<ul><li>Our valuation of Robinhood is based on an EV/S multiple of 10.7x using our estimated sales of US$2.1 billion in 2022. <ul>
<li>The EV/S multiple of 10.7x is based on the average multiple of the comps in 2022.</li>
<li>The valuation multiple is higher than the those of online brokers Charles Schwab and Interactive Brokers Group.</li>
<li>However, it is lower than the valuation multiples of the fintech comps including Coinbase and Affirm.</li>
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Our base case valuation of Robinhood is implied market cap of US$25.1 billion or US$29.8 per share, which is 25% lower than the mid-point of the IPO price range (US$40). Given the downside risk, we would AVOID this IPO. 
Our valuation of Robinhood is based on an EV/S multiple of 10.7x using our estimated sales of US$2.1 billion in 2022. 
The EV/S multiple of 10.7x is based on the average multiple of the comps in 2022.
The valuation multiple is higher than the those of online brokers Charles Schwab and Interactive Brokers Group.
However, it is lower than the valuation multiples of the fintech comps including Coinbase and Affirm.




United States

Coinbase Global, Inc. provides financial solutions. The Company offers platform to buy and sell cryptocurrencies. Coinbase Global serves clients worldwide.

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Coinbase Global (COIN US)

An Update on the Dunamu IPO & Sale of 200 Billion Won in the Private Market At 10 Trillion Won Value

In the past several days, it was noted in the local media that Dunamu is currently in the process of selling at least 200 billion won in the...

Douglas Kim

Founder-Led Unicorn And Leader In Product Analytics

Amplitude, the growth engine for digital products, will go public via direct listing and we think its fully SaaS, cloud-native product with...

Andrei Zakharov

Microstrategy (MSTR US): Bitcoin's Mainstream/Fringes Balancing Act

But my preference would be cryptocurrency exchange platforms, as they capture all key digital currencies, plus dumb down some of the volatility of...

David Blennerhassett

Monex – Refreshing Valuations

The news of Coinbase's entry into Japan hurt sentiment for Monex but examining valuations, we feel the risk reward is starting to become extremely...

Mio Kato

Robinhood IPO Valuation Analysis

Our base case valuation of Robinhood is implied market cap of US$25.1 billion or US$29.8 per share, which is 25% lower than the mid-point of the...

Douglas Kim

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