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

Converge ICT Solutions Inc / Equity Capital Markets

<div><p>Converge ICT (CICT) raised around US$520m in its Philippines listing.</p></div><div><p>Converge ICT is the largest high-speed fixed broadband operator in the Philippines, by high-speed residential fixed broadband subscriptions. It also claims to be the fastest growing fixed broadband operator in both the residential and enterprise market.</p></div><div><p>I have covered various aspects of the deal in my prior notes, links to which are below. In this note, I'll talk about the updates since then and provide a table with implied valuation at different share price levels.</p></div><div><p>Links to my previous notes:</p></div><div><ul style="list-style-type: disc;">
<li dir="ltr"><p><a href="https://www.smartkarma.com/insights/converge-ict-pre-ipo-fast-growth-low-penetration-covid-resistant" target="_blank" rel="noopener">Converge ICT Pre-IPO - Fast growth, low penetration, COVID resistant</a></p></li>
<li dir="ltr"><p><a href="https://www.smartkarma.com/insights/converge-ict-pre-ipo-peer-comparison-not-a-clear-cut-winner" target="_blank" rel="noopener">Converge ICT Pre-IPO - Peer comparison - Not a clear cut winner</a></p></li>
</ul></div><div><ul style="list-style-type: disc;">
<li dir="ltr"><p><a href="https://www.smartkarma.com/insights/converge-ict-pre-ipo-thoughts-on-valuation" target="_blank" rel="noopener">Converge ICT Pre-IPO - Thoughts on valuation</a></p></li>
<li dir="ltr"><a href="https://www.smartkarma.com/insights/converge-ict-ipo-more-customers-lower-arpu" target="_blank" rel="noopener">Converge ICT IPO - More Customers, Lower ARPU</a></li>
</ul></div>

Converge ICT (CICT) raised around US$520m in its Philippines listing.Converge ICT is the largest high-speed fixed broadband operator in the Philippines, by high-speed residential fixed broadband subscriptions. It also claims to be the fastest growing fixed broadband operator in both the residential and enterprise market.I have covered various aspects of the deal in my prior notes, links to which are below. In this note, I'll talk about the updates since then and provide a table with implied valuation at different share price levels.Links to my previous notes:
Converge ICT Pre-IPO - Fast growth, low penetration, COVID resistant
Converge ICT Pre-IPO - Peer comparison - Not a clear cut winner

Converge ICT Pre-IPO - Thoughts on valuation
Converge ICT IPO - More Customers, Lower ARPU


Converge ICT IPO Trading - Long Growth Runway

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/converge-ict-solutions-inc" target="_blank" data-smartkarma-citation="entities:29215:1" rel="noopener">Converge ICT Solutions Inc (ITC PM)</a> is the only major pure-play fixed broadband provider, with an exclusive focus on serving the Philippine fixed broadband market. Converge has set its IPO price range of PHP16.50-19.00 per share. At the high-end of the IPO price range, Converge will raise proceeds of $591 million (primary/secondary split of 32%/68%). Pricing has been brought forward by a day to 8 October.</p>
<p>Eight cornerstone investors will subscribe for 38.6% of the offer shares at the high-end of the IPO price range. The cornerstone investors are Genesis Investment Management, Ghisallo Master Fund, Macquarie Funds Management, Magna New Frontiers Fund, Oaks Emerging and Frontier Opportunities Fund, OMERS, Segantii Capital Management and Thornburg Investment Management. </p>
</div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/converge-ict-solutions-ipo-making-the-connection" target="_blank" rel="noopener">our previous note</a>, we highlighted that the 1H20 results reinforce our view that Converge’s fundamentals are attractive. Overall, we think that an attractive PEG valuation, a market-leading business and solid cornerstone support makes Converge tempting at the proposed pricing range. </p></div></div></div>


Converge ICT Solutions Inc (ITC PM) is the only major pure-play fixed broadband provider, with an exclusive focus on serving the Philippine fixed broadband market. Converge has set its IPO price range of PHP16.50-19.00 per share. At the high-end of the IPO price range, Converge will raise proceeds of $591 million (primary/secondary split of 32%/68%). Pricing has been brought forward by a day to 8 October.
Eight cornerstone investors will subscribe for 38.6% of the offer shares at the high-end of the IPO price range. The cornerstone investors are Genesis Investment Management, Ghisallo Master Fund, Macquarie Funds Management, Magna New Frontiers Fund, Oaks Emerging and Frontier Opportunities Fund, OMERS, Segantii Capital Management and Thornburg Investment Management. 
In our previous note, we highlighted that the 1H20 results reinforce our view that Converge’s fundamentals are attractive. Overall, we think that an attractive PEG valuation, a market-leading business and solid cornerstone support makes Converge tempting at the proposed pricing range. 

Converge ICT Solutions IPO: Valuation Insights

<p>Converge ICT (CICT) is looking to raise around US$600m in its Philippines listing.</p><p>Converge ICT is the largest high-speed fixed broadband operator in the Philippines, by high-speed residential fixed broadband subscriptions. It also claims to be the fastest growing fixed broadband operator in both the residential and enterprise market.</p><p>CICT’s revenue has grown at 69% CAGR over FY16-19, with growth being led by its residential business whose revenue has increased at 95% CAGR. Gross profit grew at 56% CAGR, EBITDA at 91% CAGR and Net profit at 60% CAGR. In other words, most of the revenue growth has flowed down to the bottom line. </p><p>I have covered the company background, undertaken a peer comparison and spoken about valuation in my earlier reports, links to which are below. In this note, I’ll talk about deal dynamics and recent updates from the prospectus.</p><p>Links to my previous notes:</p><ul>
<li dir="ltr"><p><a href="https://www.smartkarma.com/insights/converge-ict-pre-ipo-fast-growth-low-penetration-covid-resistant" target="_blank" rel="noopener">Converge ICT Pre-IPO - Fast growth, low penetration, COVID resistant</a></p></li>
<li dir="ltr"><p><a href="https://www.smartkarma.com/insights/converge-ict-pre-ipo-peer-comparison-not-a-clear-cut-winner" target="_blank" rel="noopener">Converge ICT Pre-IPO - Peer comparison - Not a clear cut winner</a></p></li>
</ul><ul><li dir="ltr"><p><a href="https://www.smartkarma.com/insights/converge-ict-pre-ipo-thoughts-on-valuation" target="_blank" rel="noopener">Converge ICT Pre-IPO - Thoughts on valuation</a></p></li></ul>

Converge ICT (CICT) is looking to raise around US$600m in its Philippines listing.Converge ICT is the largest high-speed fixed broadband operator in the Philippines, by high-speed residential fixed broadband subscriptions. It also claims to be the fastest growing fixed broadband operator in both the residential and enterprise market.CICT’s revenue has grown at 69% CAGR over FY16-19, with growth being led by its residential business whose revenue has increased at 95% CAGR. Gross profit grew at 56% CAGR, EBITDA at 91% CAGR and Net profit at 60% CAGR. In other words, most of the revenue growth has flowed down to the bottom line. I have covered the company background, undertaken a peer comparison and spoken about valuation in my earlier reports, links to which are below. In this note, I’ll talk about deal dynamics and recent updates from the prospectus.Links to my previous notes:
Converge ICT Pre-IPO - Fast growth, low penetration, COVID resistant
Converge ICT Pre-IPO - Peer comparison - Not a clear cut winner
Converge ICT Pre-IPO - Thoughts on valuation

Converge ICT IPO - More Customers, Lower ARPU

<p>Converge ICT aims to raise around US$500+m in its Philippines listing.</p><p>Converge ICT (CICT) is the largest high-speed fixed broadband operator in the Philippines, by high-speed residential fixed broadband subscriptions. It has a 54% market share as of Mar 2020, according to MPA. It also claims to be the fastest growing fixed broadband operator in both the residential and enterprise market.</p><p>CICT owns and operates an end-to-end fiber network in the Philippines, with over 30,000 km of fiber as of Mar 2020. Its network covers 200 cities and municipalities across Luzon. As of Mar 2020, it reached approximately 4.1m homes.</p><p>CICT’s revenue has grown at 69% CAGR over FY16-19, with growth being led by its residential business whose revenue has increased at 95% CAGR over the same time frame. Gross profit grew at 56% CAGR, EBITDA at 91% CAGR and Net profit at 60% CAGR. In other words, most of the revenue growth has flowed down to the bottom line. </p><p>I have covered the company background and undertaken a peer comparison in my earlier reports, links to which are below. In this note, I’ll talk about earnings forecast and valuations.</p><p>Links to my previous notes:</p><ul>
<li dir="ltr"><p><a href="https://www.smartkarma.com/insights/converge-ict-pre-ipo-fast-growth-low-penetration-covid-resistant" target="_blank" rel="noopener">Converge ICT Pre-IPO - Fast growth, low penetration, COVID resistant</a></p></li>
<li dir="ltr"><p><a href="https://www.smartkarma.com/compose/insight/43808/Converge%20ICT%20Pre-IPO%20-%20Peer%20Comparison%20-%20Not%20a%20Clear%20Cut%20Winner" target="_blank" rel="noopener">Converge ICT Pre-IPO - Peer comparison - Not a clear cut winner</a></p></li>
</ul>

Converge ICT aims to raise around US$500+m in its Philippines listing.Converge ICT (CICT) is the largest high-speed fixed broadband operator in the Philippines, by high-speed residential fixed broadband subscriptions. It has a 54% market share as of Mar 2020, according to MPA. It also claims to be the fastest growing fixed broadband operator in both the residential and enterprise market.CICT owns and operates an end-to-end fiber network in the Philippines, with over 30,000 km of fiber as of Mar 2020. Its network covers 200 cities and municipalities across Luzon. As of Mar 2020, it reached approximately 4.1m homes.CICT’s revenue has grown at 69% CAGR over FY16-19, with growth being led by its residential business whose revenue has increased at 95% CAGR over the same time frame. Gross profit grew at 56% CAGR, EBITDA at 91% CAGR and Net profit at 60% CAGR. In other words, most of the revenue growth has flowed down to the bottom line. I have covered the company background and undertaken a peer comparison in my earlier reports, links to which are below. In this note, I’ll talk about earnings forecast and valuations.Links to my previous notes:
Converge ICT Pre-IPO - Fast growth, low penetration, COVID resistant
Converge ICT Pre-IPO - Peer comparison - Not a clear cut winner


Converge ICT Pre-IPO - Thoughts on Valuation

<p><a href="https://www.smartkarma.com/entities/converge-ict-solutions-inc" target="_blank" data-smartkarma-citation="entities:29215:1" rel="noopener">Converge ICT Solutions Inc (ITC PM)</a> is the only major pure-play fixed broadband provider, with an exclusive focus on serving the Philippine fixed broadband market. It is the largest high-speed fixed broadband operator in the Philippines, by high-speed residential fixed broadband subscriptions, with a 55% market share in 1H20, according to MPA. Converge has received regulatory approval for a listing on the main board of the Philippine Stock Exchange to raise $724.7 million (primary/secondary split of 32%/68%). The final offer price will be announced on 9 October and the IPO will run from 13-19 October. </p><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/converge-ict-solutions-ipo-initiation-well-connected" target="_blank" rel="noopener">our initiation note</a>, we highlighted that Converge is a structural play on the increasing penetration rates of fixed broadband in the Philippines driven by the ongoing rollout of fibre network infrastructure to satisfy the pent-up demand. Since then, Converge has released an updated prospectus with 1H20 results and recent developments. Overall, the 1H20 results reinforce our view that Converge’s fundamentals are attractive.</p></div>

Converge ICT Solutions Inc (ITC PM) is the only major pure-play fixed broadband provider, with an exclusive focus on serving the Philippine fixed broadband market. It is the largest high-speed fixed broadband operator in the Philippines, by high-speed residential fixed broadband subscriptions, with a 55% market share in 1H20, according to MPA. Converge has received regulatory approval for a listing on the main board of the Philippine Stock Exchange to raise $724.7 million (primary/secondary split of 32%/68%). The final offer price will be announced on 9 October and the IPO will run from 13-19 October. In our initiation note, we highlighted that Converge is a structural play on the increasing penetration rates of fixed broadband in the Philippines driven by the ongoing rollout of fibre network infrastructure to satisfy the pent-up demand. Since then, Converge has released an updated prospectus with 1H20 results and recent developments. Overall, the 1H20 results reinforce our view that Converge’s fundamentals are attractive.

Converge ICT Solutions IPO: Making the Connection

Philippines

Globe Telecom is a major Philippine telecommunications company that provides mobile and fixed-line broadband telecommunications services. It offers digital wireless communications services under brands like Globe Postpaid, Prepaid, GOMO, and Touch Mobile, along with home connectivity via Globe At Home and GFiber. Beyond traditional connectivity, Globe also operates in digital solutions and financial technology through its GCash service and GlobeOne digital superapp. The company is headquartered in Bonifacio Global City, Taguig, Philippines, and was founded on January 15, 1935.

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Globe Telecom (GLO PM)

Converge ICT IPO Trading - Long Growth Runway

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Converge ICT Solutions IPO: Valuation Insights

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Arun George

Converge ICT IPO - More Customers, Lower ARPU

Converge ICT (CICT) aims to raise around US$600m in its Philippines listing. Converge ICT is the largest high-speed fixed broadband operator in the...

Sumeet Singh

Converge ICT Pre-IPO - Thoughts on Valuation

Converge ICT aims to raise around US$500m in its Philippines listing. Converge ICT (CICT) is the largest high-speed fixed broadband operator in...

Sumeet Singh

Converge ICT Solutions IPO: Making the Connection

Converge ICT Solutions Inc (ITC PM) is the only major pure-play fixed broadband provider, with an exclusive focus on serving the Philippine fixed...

Arun George

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