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.

Equity Capital Markets

Sunshine Insurance / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sunshine-insurance-group" target="_blank" data-smartkarma-citation="entities:36464:1" rel="noopener">Sunshine Insurance (SUN HK)</a>, a Chinese life and P&amp;C insurance company, is pre-marketing a US$1.0 billion HKEx IPO, according to press reports.</li>
<li>In <a href="https://www.smartkarma.com/insights/sunshine-insurance-group-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:85205" rel="noopener">Sunshine Insurance Group IPO: The Bull Case</a>, we highlighted the key elements of the bull case. In this note, we outline the bear case.  </li>
<li>The key elements of the bear case rest on Sunshine Life’s VNB margin decline and agent channel pressure; Sunshine P&amp;C’s regulatory pressure on premiums and the group's declining investment yield.</li>
</ul>



Sunshine Insurance (SUN HK), a Chinese life and P&amp;C insurance company, is pre-marketing a US$1.0 billion HKEx IPO, according to press reports.
In Sunshine Insurance Group IPO: The Bull Case, we highlighted the key elements of the bull case. In this note, we outline the bear case.  
The key elements of the bear case rest on Sunshine Life’s VNB margin decline and agent channel pressure; Sunshine P&amp;C’s regulatory pressure on premiums and the group's declining investment yield.


Sunshine Insurance Group IPO: The Bear Case

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sunshine-insurance-group" target="_blank" data-smartkarma-citation="entities:36464:1" rel="noopener">Sunshine Insurance (SUN HK)</a>, a Chinese life and P&amp;C insurance company, is pre-marketing a US$1.0 billion HKEx IPO, according to press reports.</li>
<li>In 2020, Sunshine P&amp;C ranked seventh and Sunshine Life ranked 12th as measured by original premiums income market share, according to the CBIRC and the Insurance Association of China.</li>
<li>The key elements of the bull case rest on Sunshine Life’s robust premium growth and high persistency ratio; Sunshine P&amp;C’s underwriting profits in 9M22 and its high group solvency ratio.</li>
</ul>



Sunshine Insurance (SUN HK), a Chinese life and P&amp;C insurance company, is pre-marketing a US$1.0 billion HKEx IPO, according to press reports.
In 2020, Sunshine P&amp;C ranked seventh and Sunshine Life ranked 12th as measured by original premiums income market share, according to the CBIRC and the Insurance Association of China.
The key elements of the bull case rest on Sunshine Life’s robust premium growth and high persistency ratio; Sunshine P&amp;C’s underwriting profits in 9M22 and its high group solvency ratio.


Sunshine Insurance Group IPO: The Bull Case

Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

<ul>
<li>
Better, But Off A Low Base: AIA Group's (1299.HK) [AIA] limited set of 3Q21 results, where VONB declined 3.5% on a linked quarter basis due weaker new sales volume; </li>
<li>
Many Deal Distractions:AIA has gone on a deal-making spree in 2021, announcing six separate transactions to date; and  </li>
<li>
Suffocating Hong Kong Business: AIA’s core Hong Kong business has been an unmitigated disaster during COVID-19, struggling with mainland Chinese visitors. Further, there is limited clarity on AIA’s legacy agents. </li>
</ul>



Better, But Off A Low Base: AIA Group's (1299.HK) [AIA] limited set of 3Q21 results, where VONB declined 3.5% on a linked quarter basis due weaker new sales volume; 

Many Deal Distractions:AIA has gone on a deal-making spree in 2021, announcing six separate transactions to date; and  

Suffocating Hong Kong Business: AIA’s core Hong Kong business has been an unmitigated disaster during COVID-19, struggling with mainland Chinese visitors. Further, there is limited clarity on AIA’s legacy agents. 


AIA Group – No Word On Massive Deal Risk

<a href="https://www.smartkarma.com/entities/fwd-group-holdings" target="_blank" data-smartkarma-citation="entities:34332:1" rel="noopener">FWD Group Holdings (FWD US)</a> is a Pan-Asia insurer founded in 2013 by Richard Li. FWD is seeking to raise $2 billion through an NYSE IPO at a valuation between $13 billion and $15 billion, according to press reports. FWD has already secured $500 million in pre-deal demand from investors linked to the issuer - Li Ka Shing Foundation ($300 million), <a href="https://www.smartkarma.com/entities/pccw-ltd" target="_blank" data-smartkarma-citation="entities:873:1" rel="noopener">PCCW Ltd (8 HK)</a> ($100 million) and PCGI Holdings ($100 million). Athene Life Re, whose assets are managed by Apollo Global Management, has agreed to purchase shares worth $400 million in a concurrent private placement. As a relatively young insurer, FWD has built its market position as a Pan-Asian insurer through both organic growth and strategic acquisitions across Asia. FWD was the fastest-growing Pan-Asian life insurer in the past five years, according to NMG. In the short term, the outbreak of the Delta variant may impact the results. In the long-term, FWD’s compelling customer propositions and multi-channel distribution across different geographies within Asia will likely support further market share gains. <div class="content-highlight">FWD notes that there remains significant potential for cross-selling and up-selling to its millennial customers (59% of organic new individual policyholders in 1H21) as they advance through different life stages and gain spending power. On balance, we think that FWD has sufficient headroom to continue to gain market share while improving profitability. </div>

FWD Group Holdings (FWD US) is a Pan-Asia insurer founded in 2013 by Richard Li. FWD is seeking to raise $2 billion through an NYSE IPO at a valuation between $13 billion and $15 billion, according to press reports. FWD has already secured $500 million in pre-deal demand from investors linked to the issuer - Li Ka Shing Foundation ($300 million), PCCW Ltd (8 HK) ($100 million) and PCGI Holdings ($100 million). Athene Life Re, whose assets are managed by Apollo Global Management, has agreed to purchase shares worth $400 million in a concurrent private placement. As a relatively young insurer, FWD has built its market position as a Pan-Asian insurer through both organic growth and strategic acquisitions across Asia. FWD was the fastest-growing Pan-Asian life insurer in the past five years, according to NMG. In the short term, the outbreak of the Delta variant may impact the results. In the long-term, FWD’s compelling customer propositions and multi-channel distribution across different geographies within Asia will likely support further market share gains. FWD notes that there remains significant potential for cross-selling and up-selling to its millennial customers (59% of organic new individual policyholders in 1H21) as they advance through different life stages and gain spending power. On balance, we think that FWD has sufficient headroom to continue to gain market share while improving profitability. 

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.

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia. Southeast Asia markets contributed over 40% of its Value of New Business (VNB) in 2020. It had served over 9.9m customers as of Jun 21.In this note, we will talk about the positive aspects of the deal.

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. FWD is a pan-Asia life insurer operating in ten markets including Hong Kong (and Macau), Thailand (and Cambodia), Japan, the Philippines, Indonesia, Singapore, Vietnam and Malaysia. Southeast Asia markets contributed over 40% of its Value of New Business (VNB) in 2020. It had served over 9.9m customers as of Jun 21.In this note, we will talk about the positive aspects of the deal.

FWD Pre-IPO - The Positives - Growing Fast

Canada

Manulife Financial Corporation is a Canadian multinational insurance company and financial services provider. It offers life and health insurance, wealth management, and investment solutions to individuals and groups across Canada, the U.S., and Asia. Headquartered in Toronto, Ontario, the company was founded in 1887.

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Manulife (945 HK)

Sunshine Insurance Group IPO: The Bear Case

The key elements of the bear case rest on Sunshine Life’s VNB margin decline and agent channel pressure; Sunshine P&C’s regulatory pressure on...

Arun George

Sunshine Insurance Group IPO: The Bull Case

The key elements of the bull case rest on Sunshine Life’s robust premium growth and high persistency ratio; Sunshine P&C’s underwriting profits in...

Arun George

AIA Group – No Word On Massive Deal Risk

AIA: AIA reported a limited set of 3Q21 results, where VONB declined 3.5% on a linked quarter basis due weaker new sales volume. No word on AIA's...

Thomas J. Monaco

FWD Group IPO: Forward March

FWD is seeking to raise $2 bn through an NYSE IPO at a valuation between $13-15 bn, according to press reports. FWD has sufficient headroom to...

Arun George

FWD Pre-IPO - The Positives - Growing Fast

FWD, a pan-Asian life insurer founded by Richard Li, aims to raise up to US$3bn in its US IPO. In this note, we will talk about the positive...

Sumeet Singh

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