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

<div>
<p><a href="https://www.smartkarma.com/entities/waterdrop-inc" target="_blank" data-smartkarma-citation="entities:33018:1" rel="noopener">Waterdrop Inc (WDH US)</a>, a technology platform for insurance and healthcare services in China, raised around US$360m in its US IPO. <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a> owned 22.1% and <a href="https://www.smartkarma.com/entities/swiss-re-ag-1f83dcbc-730e-46fa-82f2-bfe7e8e361a1" target="_blank" data-smartkarma-citation="entities:27914:1" rel="noopener">Swiss Re AG (SREN SW)</a> owned 5.7% of the company prior to its listing.</p>
</div>
<div>
<p>We have covered various aspects of the deal in our previous notes, <a href="https://www.smartkarma.com/insights/waterdrop-pre-ipo-the-positives-fast-growth-strong-backers" target="_blank" rel="noopener">Waterdrop Pre-IPO - The Positives - Fast Growth, Strong Backers</a>, <a href="https://www.smartkarma.com/insights/waterdrop-pre-ipo-the-negatives-scandals-shutdowns-competing-with-giants-regulation" target="_blank" rel="noopener">Waterdrop Pre-IPO - The Negatives - Scandals, Shutdowns, Competing with Giants, Regulation</a> and <a href="https://www.smartkarma.com/insights/waterdrop-ipo-valuation-has-nearly-tripled-over-the-past-year" target="_blank" rel="noopener">Waterdrop IPO - Valuation Has Nearly Tripled over the past Year</a>.</p>
<p>In this note, we look at deal dynamics and provide an update on valuation.  </p>
</div>


Waterdrop Inc (WDH US), a technology platform for insurance and healthcare services in China, raised around US$360m in its US IPO. Tencent Holdings (700 HK) owned 22.1% and Swiss Re AG (SREN SW) owned 5.7% of the company prior to its listing.


We have covered various aspects of the deal in our previous notes, Waterdrop Pre-IPO - The Positives - Fast Growth, Strong Backers, Waterdrop Pre-IPO - The Negatives - Scandals, Shutdowns, Competing with Giants, Regulation and Waterdrop IPO - Valuation Has Nearly Tripled over the past Year.
In this note, we look at deal dynamics and provide an update on valuation.  


Waterdrop IPO Trading - Ant's Mutual Aid Admissions Showcase the Regulatory Overhang

Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group (6688 HK)</a> is restructuring its business holdings, with at its core the setting up of a financial holding company</li>
<li>In addition, Ant will return to its roots in the payments division, it will set up a personal credit reporting company as well as establishing a consumer finance company</li>
<li>The official press release does not mention the investmentech arm that includes Ant’s in-house asset manager, but there is financial press speculation that it may be required to shrink its asset base</li>
<li>In essence, the new structure and more intrusive regulation will limit Ant’s ability to extract synergies from its – previously – tight knit financial eco-system, which can only hurt its potential develop further economies of scale and deliver premium revenue and earnings growth</li>
<li>It is also likely that in its consumer credit business it will need to retain a higher proportion of loans originated, thereby necessitating higher capital levels; the personal credit reporting company will also provide PBoC with access to Ant’s “big data” on payments, credit and other financial products</li>
<li>Despite the need for further clarity on the regulatory structure going forward, as well as the lack of any updated Ant financials to December 2020, we have arrived at a revised valuation range for Ant, based on our pre-money SOTP, of USD122-144bn</li>
<li>The regulator’s focus on big FinTech in China and especially Ant is constructive for the prospects of other less dominant non-bank financial companies (NBFCs) in China, such as <a href="https://www.smartkarma.com/entities/lexinfintech-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26036:1" rel="noopener">Lexinfintech Holdings (LX US)</a> and <a href="https://www.smartkarma.com/entities/lufax-holdings" target="_blank" data-smartkarma-citation="entities:29690:1" rel="noopener">Lufax Holdings (LU US)</a>, as well as retail focused banks like <a href="https://www.smartkarma.com/entities/postal-savings-bank-of-china" target="_blank" data-smartkarma-citation="entities:22848:1" rel="noopener">Postal Savings Bank of China (1658 HK)</a> </li>
<li>Risks to our cautious view on Ant include an ability for management to navigate the climate of tighter regulatory constraints and to deliver better than expected premium growth and returns from its digital financial platform</li>
</ul>



Ant Financial Services Group (6688 HK) is restructuring its business holdings, with at its core the setting up of a financial holding company
In addition, Ant will return to its roots in the payments division, it will set up a personal credit reporting company as well as establishing a consumer finance company
The official press release does not mention the investmentech arm that includes Ant’s in-house asset manager, but there is financial press speculation that it may be required to shrink its asset base
In essence, the new structure and more intrusive regulation will limit Ant’s ability to extract synergies from its – previously – tight knit financial eco-system, which can only hurt its potential develop further economies of scale and deliver premium revenue and earnings growth
It is also likely that in its consumer credit business it will need to retain a higher proportion of loans originated, thereby necessitating higher capital levels; the personal credit reporting company will also provide PBoC with access to Ant’s “big data” on payments, credit and other financial products
Despite the need for further clarity on the regulatory structure going forward, as well as the lack of any updated Ant financials to December 2020, we have arrived at a revised valuation range for Ant, based on our pre-money SOTP, of USD122-144bn
The regulator’s focus on big FinTech in China and especially Ant is constructive for the prospects of other less dominant non-bank financial companies (NBFCs) in China, such as Lexinfintech Holdings (LX US) and Lufax Holdings (LU US), as well as retail focused banks like Postal Savings Bank of China (1658 HK) 
Risks to our cautious view on Ant include an ability for management to navigate the climate of tighter regulatory constraints and to deliver better than expected premium growth and returns from its digital financial platform


APAC IPOs & Placements

Zhen Zhou, Toh

Smart Share Global / Equity Capital Markets

<div>
<p><a href="https://www.smartkarma.com/entities/energy-monster" target="_blank" data-smartkarma-citation="entities:32217:1" rel="noopener">Smart Share Global (EM US)</a> (SSG), also known as Energy Monster, raised about US$150m at US$8.50 per ADS, below the bottom-end of its initial price range. </p>
</div>
<div>
<p>SSG is a consumer tech company that provides mobile device charging service through online and offline networks. The company is the largest mobile device charging service provider in China in terms of 2020 gross revenue.</p>
</div>
<div>
<p>In this note, we look at deal dynamics and provide an update on valuation.</p>
</div>
<div>
<p>Our previous coverage of the IPO:</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/smart-share-global-pre-ipo-growing-fast-and-is-profitable-but-competition-is-picking-up" target="_blank" data-smartkarma-citation="insights:49349" rel="noopener">Smart Share Global (怪兽充电) Pre-IPO - Growing Fast and Is Profitable but Competition Is Picking Up</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/smart-share-global-rent-a-power-bank-on-the-ground" target="_blank" data-smartkarma-citation="insights:49438" rel="noopener">Smart Share Global (怪兽充电): Rent A Power Bank on the Ground</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/smart-share-global-pre-ipo-pulling-ahead-in-a-highly-competitive-landscape" target="_blank" data-smartkarma-citation="insights:49585" rel="noopener">Smart Share Global (怪兽充电) Pre-IPO - Pulling Ahead in a Highly Competitive Landscape</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/smart-share-global-pre-ipo-forecasts-assumptions-and-valuation" target="_blank" data-smartkarma-citation="insights:49653" rel="noopener">Smart Share Global (怪兽充电) Pre-IPO - Forecasts, Assumptions, and Valuation</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/smart-share-global-ipo-overcharged" target="_blank" data-smartkarma-citation="insights:49807" rel="noopener">Smart Share Global (怪兽充电) IPO - Overcharged</a> </li>
</ul>
</div>


Smart Share Global (EM US) (SSG), also known as Energy Monster, raised about US$150m at US$8.50 per ADS, below the bottom-end of its initial price range. 


SSG is a consumer tech company that provides mobile device charging service through online and offline networks. The company is the largest mobile device charging service provider in China in terms of 2020 gross revenue.


In this note, we look at deal dynamics and provide an update on valuation.


Our previous coverage of the IPO:




Smart Share Global (怪兽充电) Pre-IPO - Growing Fast and Is Profitable but Competition Is Picking Up 

Smart Share Global (怪兽充电): Rent A Power Bank on the Ground 

Smart Share Global (怪兽充电) Pre-IPO - Pulling Ahead in a Highly Competitive Landscape 

Smart Share Global (怪兽充电) Pre-IPO - Forecasts, Assumptions, and Valuation 

Smart Share Global (怪兽充电) IPO - Overcharged 



Smart Share Global (怪兽充电) IPO Trading - Cheaper Now but Still May Not Be Enough

<div><p>Coupang, one of the largest product e-commerce players in Korea, raised around US$4.2bn in its US listing via a mix of selling primary and secondary shares. </p></div><div><p>In our previous note, links to which are below, we have spoke about various aspects of the deal. In this note, talk about the trading dynamics and provide a valuation table at different  share price levels.</p></div><div><p>We've covered various aspects of the deal in our earlier insights: </p></div><div><ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/coupang-pre-ipo-the-positives-fast-growth-sticky-customers" target="_blank" rel="noopener">Coupang Pre-IPO - The Positives - Fast Growth, Sticky Customers</a>, </li>
<li><a href="https://www.smartkarma.com/insights/coupang-pre-ipo-the-negatives-horrendous-data-disclosures-including-no-mention-of-ott-launch" target="_blank" rel="noopener">Coupang Pre-IPO - The Negatives - Horrendous Data Disclosures, Including No Mention of OTT Launch</a></li>
<li><a href="https://www.smartkarma.com/insights/coupang-pre-ipo-fair-bit-of-competition-but-it-s-doing-better-than-most-local-peers" target="_blank" rel="noopener">Coupang Pre-IPO - Fair Bit of Competition but It’s Doing Better than Most Local Peers</a></li>
<li><a href="https://www.smartkarma.com/insights/coupang-pre-ipo-earnings-forecast-and-valuation" target="_blank" rel="noopener">Coupang Pre-IPO - Earnings Forecast and Valuation</a></li>
<li><a href="https://www.smartkarma.com/insights/coupang-ipo-momentum-play-unequal-lock-up-index-inclusion" target="_blank" rel="noopener">Coupang IPO - Momentum Play, Unequal Lock-Up, Index Inclusion</a></li>
<li><a href="https://www.smartkarma.com/insights/coupang-ipo-quick-note-peers-move-down-range-moves-up-ripe-for-trading" target="_blank" rel="noopener">Coupang IPO - Quick Note - Peers Move Down, Range Moves Up. Ripe for Trading.</a></li>
</ul></div>

Coupang, one of the largest product e-commerce players in Korea, raised around US$4.2bn in its US listing via a mix of selling primary and secondary shares. In our previous note, links to which are below, we have spoke about various aspects of the deal. In this note, talk about the trading dynamics and provide a valuation table at different  share price levels.We've covered various aspects of the deal in our earlier insights: 

Coupang Pre-IPO - The Positives - Fast Growth, Sticky Customers, 
Coupang Pre-IPO - The Negatives - Horrendous Data Disclosures, Including No Mention of OTT Launch
Coupang Pre-IPO - Fair Bit of Competition but It’s Doing Better than Most Local Peers
Coupang Pre-IPO - Earnings Forecast and Valuation
Coupang IPO - Momentum Play, Unequal Lock-Up, Index Inclusion
Coupang IPO - Quick Note - Peers Move Down, Range Moves Up. Ripe for Trading.


Coupang IPO Trading - Most Hit near Term Peak on the First Day - Key Trading/Lock-Up Dates

<ul>
<li>With <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial Services Group (6688 HK)</a> under regulatory pressure from PBoC, Chinese NBFCs are set to gain market share in Chinese consumer and SMB credit</li>
<li>We review prospects and valuations for four listed names in this report</li>
<li>We see fundamental opportunities still, despite the marked outperformance of three out of four names since November 2020</li>
<li>We would highlight <a href="https://www.smartkarma.com/entities/lexinfintech-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26036:1" rel="noopener">Lexinfintech Holdings (LX US)</a> for its premium returns and most attractive valuations versus peers</li>
<li>
<a href="https://www.smartkarma.com/entities/lufax-holdings" target="_blank" data-smartkarma-citation="entities:29690:1" rel="noopener">Lufax Holdings (LU US)</a> is the unloved name, and it is lower return than its peers; yet it should deliver better returns with faster growth in credit volumes going forward</li>
<li>Delinquency ratios remain ranging from 2% to under 5% in 3Q 2020, and we do not expect these ratios to rise sharply and threaten profitability</li>
<li>Risks to our positive view on Chinese NBFCs generally include a sharp deterioration in credit quality, which could drive far higher credit costs; on the regulatory side, an increase in required capital adequacy for NBFCs could adversely impact the pace of loan origination</li>
</ul>


With Ant Financial Services Group (6688 HK) under regulatory pressure from PBoC, Chinese NBFCs are set to gain market share in Chinese consumer and SMB credit
We review prospects and valuations for four listed names in this report
We see fundamental opportunities still, despite the marked outperformance of three out of four names since November 2020
We would highlight Lexinfintech Holdings (LX US) for its premium returns and most attractive valuations versus peers

Lufax Holdings (LU US) is the unloved name, and it is lower return than its peers; yet it should deliver better returns with faster growth in credit volumes going forward
Delinquency ratios remain ranging from 2% to under 5% in 3Q 2020, and we do not expect these ratios to rise sharply and threaten profitability
Risks to our positive view on Chinese NBFCs generally include a sharp deterioration in credit quality, which could drive far higher credit costs; on the regulatory side, an increase in required capital adequacy for NBFCs could adversely impact the pace of loan origination


China Non-Bank Finance Companies (NBFCs); Ant’s Loss, Their Gain

China

Lufax Holding Ltd operates technology-empowered personal financial services platform. The Company connects financial institutions to facilitate lending and wealth management products tailored to individual customer's needs and risk appetites.

Price Gauge
52-week Range	0.00 - 0.00
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Lufax Holding (LU US)

Waterdrop IPO Trading - Ant's Mutual Aid Admissions Showcase the Regulatory Overhang

Waterdrop, a technology platform for insurance and healthcare services in China, raised around US$360m in its US IPO. Tencent owned 22.1% and Swiss...

Sumeet Singh

Ant Group: Nearing Regulatory Closure

Ant Group is restructuring its operations, under PBoC pressure which will limit Ant’s ability to extract synergies from its entire financial...

Victor Galliano

Coupang IPO Trading - Most Hit near Term Peak on the First Day - Key Trading/Lock-Up Dates

Coupang, one of the largest product e-commerce players in Korea, raised around US$4.2bn in its US listing via a mix of selling primary and...

Sumeet Singh

China Non-Bank Finance Companies (NBFCs); Ant’s Loss, Their Gain

Chinese NBFCs' share prices have rallied as Ant's regulatory hurdles mounted; yet we see more scope for re-rating in the case of LexinFintech on...

Victor Galliano

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Waterdrop IPO Trading - Ant's Mutual Aid Admissions Showcase the Regulatory Overhang

Waterdrop, a technology platform for insurance and healthcare services in China, raised around US$360m in its US IPO. Tencent owned 22.1% and Swiss...

Sumeet Singh

Ant Group: Nearing Regulatory Closure

Ant Group is restructuring its operations, under PBoC pressure which will limit Ant’s ability to extract synergies from its entire financial...

Victor Galliano

Smart Share Global (怪兽充电) IPO Trading - Cheaper Now but Still May Not Be Enough

Smart Share Global (EM US) (SSG), also known as Energy Monster, raised about US$150m at US$8.50 per ADS, below the bottom-end of its initial price...

Zhen Zhou, Toh

Coupang IPO Trading - Most Hit near Term Peak on the First Day - Key Trading/Lock-Up Dates

Coupang, one of the largest product e-commerce players in Korea, raised around US$4.2bn in its US listing via a mix of selling primary and...

Sumeet Singh

China Non-Bank Finance Companies (NBFCs); Ant’s Loss, Their Gain

Chinese NBFCs' share prices have rallied as Ant's regulatory hurdles mounted; yet we see more scope for re-rating in the case of LexinFintech on...

Victor Galliano