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

JINGDONG Industrials / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jd-industrials" target="_blank" data-smartkarma-citation="entities:36875:1" rel="noopener">JD Industrials (</a>JDI)  is looking to raise about US$1bn in its upcoming HK IPO. </li>
<li>JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.</li>
<li>In this note, we will undertake a peer comparison versus domestic and international peers.</li>
</ul>



JD Industrials (JDI)  is looking to raise about US$1bn in its upcoming HK IPO. 
JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
In this note, we will undertake a peer comparison versus domestic and international peers.


Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

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

<ul>
<li>After surging past 20.0x consensus FY+2 EV/OP multiple in 2012-2013, <a href="https://www.smartkarma.com/entities/monotaro-co-ltd" target="_blank" data-smartkarma-citation="entities:15441:1" rel="noopener">MonotaRO Co Ltd (3064 JP)</a>’s consensus FY+2 EV/OP has fallen below 20.0x on one very rare occasion.</li>
<li>We see no major change in the fundamentals of MonotaRo aside from a temporary hike in Opex through concurrently running old and new distribution centres for the past 3 quarters.</li>
<li>Currently trading at 22.5x consensus FY+2 OP, we think this is a good opportunity to benefit from the company’s depressed valuation.</li>
</ul>


After surging past 20.0x consensus FY+2 EV/OP multiple in 2012-2013, MonotaRO Co Ltd (3064 JP)’s consensus FY+2 EV/OP has fallen below 20.0x on one very rare occasion.
We see no major change in the fundamentals of MonotaRo aside from a temporary hike in Opex through concurrently running old and new distribution centres for the past 3 quarters.
Currently trading at 22.5x consensus FY+2 OP, we think this is a good opportunity to benefit from the company’s depressed valuation.


MonotaRo: Hasn’t Been This Cheap For Quite a Long Time

Japan Specialist

Mark Chadwick

<ul>
<li>We reassess our long-term financial model for Monotaro following 2 consecutive months of weak monthly data</li>
<li>Just two months into the new fiscal year, but YTD sales growth of 13% is far short of the full year target</li>
<li>Our DCF valuation highlights further 21% downside assuming 10y CAGR of 10.5%</li>
</ul>


We reassess our long-term financial model for Monotaro following 2 consecutive months of weak monthly data
Just two months into the new fiscal year, but YTD sales growth of 13% is far short of the full year target
Our DCF valuation highlights further 21% downside assuming 10y CAGR of 10.5%


Monotaro (3064) | Pricing in Downside Risks

Shifara Samsudeen, FCMA, CGMA

<ul>
<li>Shift offers outsourced software testing services and is the market leader in Japan. Software testing market is estimated at JPY5.5trn in Japan but only 1% of the market is outsourced.</li>
<li>The company has been rebranding itself from software testing provider to digital transformation (DX) and business services provider and this expansion has further potential to drive growth in the long-term.</li>
<li>Though Shift’s valuation multiples look expensive, we think there is further upside given the strong growth in top line alongside further improvement in margins.</li>
</ul>


Shift offers outsourced software testing services and is the market leader in Japan. Software testing market is estimated at JPY5.5trn in Japan but only 1% of the market is outsourced.
The company has been rebranding itself from software testing provider to digital transformation (DX) and business services provider and this expansion has further potential to drive growth in the long-term.
Though Shift’s valuation multiples look expensive, we think there is further upside given the strong growth in top line alongside further improvement in margins.


2023 High Conviction: Shift’s Growth Strategy Starting to Deliver Results

<ul>
<li>MonotaRo is well placed to monetise the shift of enterprise MRO spending as it moves increasingly online</li>
<li>The company's new distribution centre will enable the company to increase capacity, speed up deliveries, and offer improved services to enterprise clients</li>
<li>Structural growth stories are few and far between in Japan. MonotaRo is one of them and appears expensive on most valuation metrics. Our LT DCF model suggests 30% upside</li>
</ul>


MonotaRo is well placed to monetise the shift of enterprise MRO spending as it moves increasingly online
The company's new distribution centre will enable the company to increase capacity, speed up deliveries, and offer improved services to enterprise clients
Structural growth stories are few and far between in Japan. MonotaRo is one of them and appears expensive on most valuation metrics. Our LT DCF model suggests 30% upside


MonotaRO (3064) | Another Decade of Secular Growth

Japan

MonotaRO Co., Ltd. mainly sells machine tools, engine parts, and factory consumable goods on the web site.

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MonotaRO Co Ltd (3064 JP)

JD Industrials Pre-IPO - Peer Comparison

JD Industrials (JDI) is looking to raise about US$1bn in its upcoming HK IPO. In this note, we undertake a peer comparison.

Sumeet Singh

MonotaRo: Hasn’t Been This Cheap For Quite a Long Time

After surging past 20.0x consensus FY+2 EV/OP multiple in 2012-2013, MonotaRo’s consensus FY+2 EV/OP has fallen below 20.0x on one very rare...

Oshadhi Kumarasiri

Monotaro (3064) | Pricing in Downside Risks

We reassess our long-term financial model for Monotaro following 2 consecutive months of weak monthly data. We see 20% downside risk to the stock...

Mark Chadwick

2023 High Conviction: Shift’s Growth Strategy Starting to Deliver Results

Being the market leader and having created a barrier in the enterprise software testing segment, Shift is well positioned to benefit from strong...

Shifara Samsudeen, FCMA, CGMA

MonotaRO (3064) | Another Decade of Secular Growth

MonotaRo is well placed to monetise the shift of enterprise MRO spending as it moves increasingly online. The company is lifting capacity and...

Mark Chadwick

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