Japan Specialist

Mark Chadwick

Equity Bottom-Up

<ul>
<li>Shimano's stock price has declined by 25% year to date on expectations that bike sales will soon start going downhill</li>
<li>We model a GFC-style recession and find that Shimano's valuation has already reflected the worst case scenario</li>
<li>If we are heading for a collapse, then <a href="https://www.smartkarma.com/entities/ferrari-n-v" target="_blank" data-smartkarma-citation="entities:21010:1" rel="noopener">Ferrari N.V. (RACE US)</a> should be acting more like Shimano. The valuation discount between the two is as wide as ever</li>
</ul>


Shimano's stock price has declined by 25% year to date on expectations that bike sales will soon start going downhill
We model a GFC-style recession and find that Shimano's valuation has already reflected the worst case scenario
If we are heading for a collapse, then Ferrari N.V. (RACE US) should be acting more like Shimano. The valuation discount between the two is as wide as ever


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

Sona Blw Precision Forgings Lt / Equity Capital Markets

<ul>
<li>Sona Comstar (Sona) raised around US$761m in its Indian IPO in Jun 2021. </li>
<li>The shares are now trading well above the IPO price and its largest PE investor, Blackstone, will be released from its lockup soon.</li>
<li>In this note, we will talk about the lock-up dynamics and updates since our last note.</li>
</ul>


Sona Comstar (Sona) raised around US$761m in its Indian IPO in Jun 2021. 
The shares are now trading well above the IPO price and its largest PE investor, Blackstone, will be released from its lockup soon.
In this note, we will talk about the lock-up dynamics and updates since our last note.


Sona Comstar Lock-Up - Blackstone up 17x, Sold Half in the IPO with over US$1bn Left

Zhejiang Leapmotor Technologie / Equity Capital Markets

<ul>
<li>Leapmotor (LM) aims to raise around US$1bn in its Hong Kong IPO. LM is a smart EV company based in China, founded in 2015.</li>
<li>It focuses on the mid- to high-end segment in China’s NEV market with a price range of RMB150,000-300,000. As of end FY21, it had delivered a total of 52,832 cars.</li>
<li>In this note, we talk about the positive aspects of the deal.</li>
</ul>


Leapmotor (LM) aims to raise around US$1bn in its Hong Kong IPO. LM is a smart EV company based in China, founded in 2015.
It focuses on the mid- to high-end segment in China’s NEV market with a price range of RMB150,000-300,000. As of end FY21, it had delivered a total of 52,832 cars.
In this note, we talk about the positive aspects of the deal.


Leapmotor Pre-IPO - The Positives - Planned Launches Should Prop up Growth

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

Porsche Automobil Holding  / Event-Driven

<ul>
<li>I would value Porsche on 18.9x €5.3 billion 22eEBIT, i.e. €100bn; Ferrari, which has moderately higher EBIT margins (25% vs. 16%), trades on 31.2x EV/22e EBIT (Capital IQ consensus).</li>
<li>The current discount of VW prefs to ords is 23.2%. A Porsche IPO without major changes on VW share structure, would be positive for the preference shares. Long prefs/short ords.</li>
<li>An IPO of Porsche would be beneficial for the Porsche SE shares and the current discount to NAV should tighten even more, in my view. Long 1 PAH3 GR/short 0.5136 VOW GR.</li>
</ul>


I would value Porsche on 18.9x €5.3 billion 22eEBIT, i.e. €100bn; Ferrari, which has moderately higher EBIT margins (25% vs. 16%), trades on 31.2x EV/22e EBIT (Capital IQ consensus).
The current discount of VW prefs to ords is 23.2%. A Porsche IPO without major changes on VW share structure, would be positive for the preference shares. Long prefs/short ords.
An IPO of Porsche would be beneficial for the Porsche SE shares and the current discount to NAV should tighten even more, in my view. Long 1 PAH3 GR/short 0.5136 VOW GR.


Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

iShares Russell 2000 ETF / Technical Analysis

<ul>
<li>The false breakout in the Russell 2000 (IWM) tells us that the mixed market environment is back, and we no longer see a broad-based bull market.</li>
<li>Key supports: 4545 on S&amp;P 500, $383 on NDX (QQQ), $208 on Russell 2000 (IWM), $135 on MicroCaps (IWC), $76.50 on MSCI EAFE (EFA), $54 on MSCI ACWI exUS (ACWX)</li>
<li>If supports hold we expect more consolidation and mixed markets ahead. However, if supports start to break we would turn bearish as we would expect a more significant correction.</li>
</ul>


The false breakout in the Russell 2000 (IWM) tells us that the mixed market environment is back, and we no longer see a broad-based bull market.
Key supports: 4545 on S&amp;P 500, $383 on NDX (QQQ), $208 on Russell 2000 (IWM), $135 on MicroCaps (IWC), $76.50 on MSCI EAFE (EFA), $54 on MSCI ACWI exUS (ACWX)
If supports hold we expect more consolidation and mixed markets ahead. However, if supports start to break we would turn bearish as we would expect a more significant correction.


U.S. Equity Strategy: Major Indexes Testing Critical Supports; Buying Consumer Discretionary Stocks

Italy

Ferrari NV designs and manufactures sports cars. The Company offers new and used vehicles, warranty programs, financial supports, and maintenance, as well as watches, apparels, earphones, caps, and other accessories. Ferrari markets its products worldwide.

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Ferrari NV (RACE IM)

Shimano (7309) | Join the Race

We remain bullish on Shimano. The market is assuming that sales and profits collapse next year. We think that valuations already reflect a worst...

Mark Chadwick

Sona Comstar Lock-Up - Blackstone up 17x, Sold Half in the IPO with over US$1bn Left

Sona Comstar (Sona) raised around US$761m in its Indian IPO in Jun 2021. The shares are trading well above the IPO price. Blackstone still owns...

Sumeet Singh

Leapmotor Pre-IPO - The Positives - Planned Launches Should Prop up Growth

Leapmotor (LM) aims to raise around US$1bn in its Hong Kong IPO. LM is a smart EV company based in China, founded in 2015. In this note, we will...

Sumeet Singh

PAR3/VOW3/Potential Porsche IPO

The valuation of Porsche OpCo could reach €100 billion, vs. a market capitalization of c. €109.4 billion of VW. This is a feasible range...

Jesus Rodriguez Aguilar

U.S. Equity Strategy: Major Indexes Testing Critical Supports; Buying Consumer Discretionary Stocks

Market dynamics have deteriorated along with the major averages, and many are testing critical supports; as long as supports hold we expect more...

Vermilion Research

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