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.

Event-Driven

<div>
<p>Today morning <a href="https://www.smartkarma.com/entities/prosus-nv-75c7a0c4-16ff-4433-a40f-25ae5b24077d" target="_blank" data-smartkarma-citation="entities:28498:1" rel="noopener">Prosus NV (PROSY US) </a>announced that it would acquire 45.4% of <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)'s </a> issued N Share capital through a voluntary offer to be settled with newly issued Prosus Shares. This will result in Prosus owning 49.5% of Naspers, which in turn will still own 57.2% of Prosus.</p>
<p>In this note, we will look at the current structure revamp.</p>
<p>We have looked at Prosus in the past as a part of covering the Tencent placement, our last note was <a href="https://www.smartkarma.com/insights/tencent-placement-and-the-holdco-implications-deal-almost-done-now-what" target="_blank" rel="noopener">Tencent Placement and the Holdco Implications - Deal Almost Done, Now What?.</a></p>
</div>


Today morning Prosus NV (PROSY US) announced that it would acquire 45.4% of Naspers (NPN SJ)'s  issued N Share capital through a voluntary offer to be settled with newly issued Prosus Shares. This will result in Prosus owning 49.5% of Naspers, which in turn will still own 57.2% of Prosus.
In this note, we will look at the current structure revamp.
We have looked at Prosus in the past as a part of covering the Tencent placement, our last note was Tencent Placement and the Holdco Implications - Deal Almost Done, Now What?.


Prosus/Naspers Holdco - Round Tripping US$46bn

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> aims to raise around US$10bn via a combination of an equity placement and convertible bond issuance. </p><p>Along with the US$6.6bn top-up placement, its largest shareholder <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> will chip in another US$400m. In this note, we will run the deal through our framework and talk about deal dynamics.</p>

Meituan (3690 HK) aims to raise around US$10bn via a combination of an equity placement and convertible bond issuance. Along with the US$6.6bn top-up placement, its largest shareholder Tencent Holdings (700 HK) will chip in another US$400m. In this note, we will run the deal through our framework and talk about deal dynamics.

Meituan Placement - Might Not Do a Tencent but Low-End Looks Enticing

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Thematic (Sector/Industry)

<p>This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.  </p><p><strong><em>Companies mentioned this week:</em></strong></p><p><a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a>, <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a>, <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a>, <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>, <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a>, <a href="https://www.smartkarma.com/entities/anglo-american-plc" target="_blank" data-smartkarma-citation="entities:21798:1" rel="noopener">Anglo American (AAL LN)</a>, <a href="https://www.smartkarma.com/entities/axiata-group-berhad" target="_blank" data-smartkarma-citation="entities:944:1" rel="noopener">Axiata Group (AXIATA MK)</a>, GlobalFoundries, <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>, <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a></p>

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.  Companies mentioned this week:JD.com Inc. (9618 HK), Prosus (PRX NA), Naspers (NPN SJ), Tencent Holdings (700 HK), Xiaomi Corp (1810 HK), Anglo American (AAL LN), Axiata Group (AXIATA MK), GlobalFoundries, TSMC (2330 TT), Samsung Electronics (005930 KS)

Global Emerging Markets Weekly: 9 April 2021

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<div>
<p>A double dose of StubWorld this week...</p>
</div>
<div>
<div class="content-highlight">
<p>As expected, <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> <a href="https://www.prosus.com/news/accelerated-offering-of-tencent-shares-by-prosus-nv/" target="_blank" rel="noopener">launched</a> another <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> offer. It is the same 2.0% as previously, but at a price 50% higher. Prosus has also committed not to sell any further Tencent shares for at least the next three years. </p>
</div>
</div>
<div>
<p>Preceding my comments on Naspers/Prosus/Tencent are the weekly setup/unwind tables for Asia-Pacific Holdcos.</p>
</div>
<div>
<p>These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.</p>
</div>


A double dose of StubWorld this week...



As expected, Prosus (PRX NA) launched another Tencent Holdings (700 HK) offer. It is the same 2.0% as previously, but at a price 50% higher. Prosus has also committed not to sell any further Tencent shares for at least the next three years. 



Preceding my comments on Naspers/Prosus/Tencent are the weekly setup/unwind tables for Asia-Pacific Holdcos.


These relationships trade with a minimum liquidity threshold of US$1mn on a 90-day moving average, and a % market capitalisation threshold - the $ value of the holding/opco held, over the parent’s market capitalisation, expressed in percent - of at least 20%.


StubWorld: Naspers/Tencent - And Another Three Years

Travis Lundy

<p>Three years ago on 22 March 2018, after <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> reported full year earnings for the year to December 2017, <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> launched a sale of shares in Tencent of about 2.0% of shares out, lowering their stake and raising cash which was supposed to be used to buy more e-commerce assets, with the lofty but separately-stated goal being to "balance the portfolio" over the coming years. </p>
<p>At the time, Naspers was trading at a 40% discount - a level with which Naspers management was clearly unhappy - and Tencent was roughly 91% of Naspers NAV. </p>
<p>At the time, apparently wary of signalling more pressure on Tencent shares from potential future sales, Naspers promised it would not sell any more Tencent shares for three years. </p>
<p>But that set up the likelihood of a sale after Tencent reported earnings in March 2021, this time by <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> which inherited the listed equity positions from Naspers in a dropdown spinoff 18 months ago.</p>
<p>Then that sale did not arrive. </p>
<p>There were, of course, ructions in the market that same week as Family Office Archegos Capital Management ran into a spot of difficulty and both it and its financiers had to sell (in a hurry) tens of billions of dollars of concentrated positions - many in the category of Chinese stocks listed outside of mainland China. It was clearly not the best time to sell a large block, so it appears Naspers/Prosus waited. </p>
<p>Today, Prosus <a href="https://www.prosus.com/news/accelerated-offering-of-tencent-shares-by-prosus-nv/" target="_blank" rel="noopener">announced</a> an accelerated offering of Tencent shares - again selling 2.0% of shares out, dropping their position from 30.9% to 28.9% of shares outstanding, at an indicated 5.5-8.7% discount to last close - a price range of HK$575-595/share. Again Prosus has locked themselves up for longer than normal.</p>
<blockquote>
<p>Prosus has committed not to sell any further Tencent shares for at least the next three years, in line with its long-term belief in the potential of the business. </p>
</blockquote>
<p>This leaves one with the question... what next?</p>

Three years ago on 22 March 2018, after Tencent Holdings (700 HK) reported full year earnings for the year to December 2017, Naspers (NPN SJ) launched a sale of shares in Tencent of about 2.0% of shares out, lowering their stake and raising cash which was supposed to be used to buy more e-commerce assets, with the lofty but separately-stated goal being to "balance the portfolio" over the coming years. 
At the time, Naspers was trading at a 40% discount - a level with which Naspers management was clearly unhappy - and Tencent was roughly 91% of Naspers NAV. 
At the time, apparently wary of signalling more pressure on Tencent shares from potential future sales, Naspers promised it would not sell any more Tencent shares for three years. 
But that set up the likelihood of a sale after Tencent reported earnings in March 2021, this time by Prosus (PRX NA) which inherited the listed equity positions from Naspers in a dropdown spinoff 18 months ago.
Then that sale did not arrive. 
There were, of course, ructions in the market that same week as Family Office Archegos Capital Management ran into a spot of difficulty and both it and its financiers had to sell (in a hurry) tens of billions of dollars of concentrated positions - many in the category of Chinese stocks listed outside of mainland China. It was clearly not the best time to sell a large block, so it appears Naspers/Prosus waited. 
Today, Prosus announced an accelerated offering of Tencent shares - again selling 2.0% of shares out, dropping their position from 30.9% to 28.9% of shares outstanding, at an indicated 5.5-8.7% discount to last close - a price range of HK$575-595/share. Again Prosus has locked themselves up for longer than normal.

Prosus has committed not to sell any further Tencent shares for at least the next three years, in line with its long-term belief in the potential of the business. 

This leaves one with the question... what next?

Be Careful What You Wish For REDUX - Prosus Selling US$15bn in Tencent

South Africa

Naspers Limited operates in the technology industry. The Company invests in global internet companies across the world.

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Naspers (NPN SJ)

Prosus/Naspers Holdco - Round Tripping US$46bn

Prosus announced that it would acquire 45.4% of Naspers via a voluntary offer to be settled with new Prosus Shares. This will result in Prosus...

Sumeet Singh

Meituan Placement - Might Not Do a Tencent but Low-End Looks Enticing

Meituan aims to raise around US$10bn via a combination of an equity placement and convertible bond issuance. In this note, we will run the deal...

Sumeet Singh

Global Emerging Markets Weekly: 9 April 2021

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity...

Wium Malan, CFA

StubWorld: Naspers/Tencent - And Another Three Years

This is a range trade situation. Expect management to get involved when Prosus widens to a ~40% discount to Tencent and Naspers at a 30% discount...

David Blennerhassett

Be Careful What You Wish For REDUX - Prosus Selling US$15bn in Tencent

Prosus is selling US$15bn of Tencent, locking themselves up for 3 years. They should have sold more and locked themselves up for less. The market...

Travis Lundy

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