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

Recruit Holdings / Equity Capital Markets

<ul>
<li>Toppan aims to raise up to US$966m via selling 0.9% stake in Recruit Holdings.</li>
<li>This is not the first selldown by Toppan and Recruit has seen a number of deals in the past, all of which have done well.</li>
<li>In this note, we will talk about the deal dynamics and run the deal through our ECM framework.</li>
</ul>


Toppan aims to raise up to US$966m via selling 0.9% stake in Recruit Holdings.
This is not the first selldown by Toppan and Recruit has seen a number of deals in the past, all of which have done well.
In this note, we will talk about the deal dynamics and run the deal through our ECM framework.


Recruit Holdings Placement - Not the First Selldown, past Deals Have Done Well

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.

<a href="https://www.smartkarma.com/entities/kanzhun-ltd" target="_blank" data-smartkarma-citation="entities:33368:1" rel="noopener">Kanzhun (BZ US)</a> is the largest online recruitment platform in China, as measured by the average monthly active users (MAU) in 2020, according to CIC. Its BOSS Zhipin mobile app connects job seekers and enterprise users as is positioned in the mid-to-high-end segment (white and gold-collar users) compared to local peers.Kanzhun is backed by <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> (12.2% of outstanding shares), Banyan Partners (9.4%), Coatue Management (7.8%), <a href="https://www.smartkarma.com/entities/goldman-sachs-group-inc" target="_blank" data-smartkarma-citation="entities:785:1" rel="noopener">Goldman Sachs Group (GS US)</a> (7.3%), Sequoia Capital and Tiger Global. Kanzhun has filed for a Nasdaq IPO to raise proceeds of $800 million, according to press reports.  Kanzhun is a play on the gradual shift of the China recruitment service market to online platforms. China’s online recruitment market size as measured by revenue is forecasted to increase from RMB55.1 billion in 2020 to RMB223.4 billion in 2025 (CAGR of 32.3%), according to CIC. The penetration rate of online recruitment to the total market is forecasted to increase from 32% in 2020 to 50% in 2025, according to CIC.<div class="content-highlight">
Kanzhun is well-positioned to benefit from this sizeable market opportunity, in our view. At first sight, the strong growth in users and fast-paced revenue growth but ongoing losses suggests another “growth at all costs” strategy. In comparison, local listed peers such as <a href="https://www.smartkarma.com/entities/51-job-inc-adr" target="_blank" data-smartkarma-citation="entities:532:1" rel="noopener">51 Job Inc Adr (JOBS US)</a> and <a href="https://www.smartkarma.com/entities/wise-talent-information-tech" target="_blank" data-smartkarma-citation="entities:27177:1" rel="noopener">Wise Talent Information Tech (6100 HK)</a> are growing much slower but are profitable.
Encouragingly, Kanzhun's high revenue visibility and declining loss margin suggest that Kanzhun can eventually deliver high growth with profits. The upfront payment model of the online recruitment market means that like its peers, Kanzhun is cash generative. For investors willing to brave the current market selloff in high growth stocks, we think that the Kanzhun story warrants a closer look.  
</div>

Kanzhun (BZ US) is the largest online recruitment platform in China, as measured by the average monthly active users (MAU) in 2020, according to CIC. Its BOSS Zhipin mobile app connects job seekers and enterprise users as is positioned in the mid-to-high-end segment (white and gold-collar users) compared to local peers.Kanzhun is backed by Tencent (700 HK) (12.2% of outstanding shares), Banyan Partners (9.4%), Coatue Management (7.8%), Goldman Sachs Group (GS US) (7.3%), Sequoia Capital and Tiger Global. Kanzhun has filed for a Nasdaq IPO to raise proceeds of $800 million, according to press reports.  Kanzhun is a play on the gradual shift of the China recruitment service market to online platforms. China’s online recruitment market size as measured by revenue is forecasted to increase from RMB55.1 billion in 2020 to RMB223.4 billion in 2025 (CAGR of 32.3%), according to CIC. The penetration rate of online recruitment to the total market is forecasted to increase from 32% in 2020 to 50% in 2025, according to CIC.
Kanzhun is well-positioned to benefit from this sizeable market opportunity, in our view. At first sight, the strong growth in users and fast-paced revenue growth but ongoing losses suggests another “growth at all costs” strategy. In comparison, local listed peers such as 51 Job Inc Adr (JOBS US) and Wise Talent Information Tech (6100 HK) are growing much slower but are profitable.
Encouragingly, Kanzhun's high revenue visibility and declining loss margin suggest that Kanzhun can eventually deliver high growth with profits. The upfront payment model of the online recruitment market means that like its peers, Kanzhun is cash generative. For investors willing to brave the current market selloff in high growth stocks, we think that the Kanzhun story warrants a closer look.  


Kanzhun IPO Initiation: Search and Employ

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

Equity Bottom-Up

<ul class="">
<li>It is rumored that Google of <a href="https://www.smartkarma.com/entities/11369" target="_blank" data-smartkarma-citation="entities:11369:1">Alphabet Inc Cl C (GOOG US)</a> will return to China, but we believe this rumor should not be a concern to investors for a number of reasons.</li>
<li>Futhermore, we believe that Baidu set up a competitive strategy of “zero gross margin” for its video business ( subsidiary <a href="https://www.smartkarma.com/entities/26755" target="_blank" data-smartkarma-citation="entities:26755:1">iQIYI Inc (IQ US)</a>) in order to remain its 50%+ market share.</li>
<li>In 2Q18, search revenue growth accelerated and the operating margin improved 1 ppt yoy.</li>
<li>The P/E band suggests an upside of 56%.</li>
</ul>


It is rumored that Google of Alphabet Inc Cl C (GOOG US) will return to China, but we believe this rumor should not be a concern to investors for a number of reasons.
Futhermore, we believe that Baidu set up a competitive strategy of “zero gross margin” for its video business ( subsidiary iQIYI Inc (IQ US)) in order to remain its 50%+ market share.
In 2Q18, search revenue growth accelerated and the operating margin improved 1 ppt yoy.
The P/E band suggests an upside of 56%.


Baidu (BIDU) – Google Rumor Not a Concern, Healthy 2Q18, and 50%+ Upside

United States

Monster Worldwide Inc. operates as a global online employment solutions company. The Company provides employment, career management, recruitment and talent management capabilities solutions to employee, job seekers and employers. Monster Worldwide also offers software solutions services. Monster Worldwide serves client worldwide.

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Monster Worldwide (MWW US)

Recruit Holdings Placement - Not the First Selldown, past Deals Have Done Well

Toppan aims to raise up to US$966m via selling 0.9% stake in Recruit Holdings. In this note, we will talk about deal dynamics and run the deal...

Sumeet Singh

Kanzhun IPO Initiation: Search and Employ

Kanzhun has filed for an $800 m raise, according to press reports. For investors willing to brave the current market selloff in high growth stocks,...

Arun George

Baidu (BIDU) – Google Rumor Not a Concern, Healthy 2Q18, and 50%+ Upside

It is rumored that Google of Alphabet Inc Cl C (GOOG US) will return to China, but we believe this rumor should not be a concern to investors for...

Ming Lu

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