TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Thematic (Sector/Industry)

<ul>
<li>We like ServiceNow into earnings. Strong 4Q21 results poised to continue, positive earnings revisions and negative stock action makes this a safe large cap bet.</li>
<li>Facebook intrigues us...incredible potential risk/reward if you think this company shouldn't trade at 10x forward EV/EBITDA. Lots of fear on the name, but reacceleration of revenues and earnings coming.</li>
<li>Don't like the Paypal or Intel setups. Paypal's CFO departure signal he thinks shareholder returns will be weak in the next year or two. Believe him.</li>
</ul>


We like ServiceNow into earnings. Strong 4Q21 results poised to continue, positive earnings revisions and negative stock action makes this a safe large cap bet.
Facebook intrigues us...incredible potential risk/reward if you think this company shouldn't trade at 10x forward EV/EBITDA. Lots of fear on the name, but reacceleration of revenues and earnings coming.
Don't like the Paypal or Intel setups. Paypal's CFO departure signal he thinks shareholder returns will be weak in the next year or two. Believe him.


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.

Event-Driven

<ul>
<li>In response to an <a href="https://www.afr.com/street-talk/bain-capital-checks-out-eml-payments-bankers-chase-other-buyers-20220412-p5acvc" target="_blank" rel="noopener">AFR article</a>, <a href="https://www.smartkarma.com/entities/eml-payments-limited" target="_blank" data-smartkarma-citation="entities:3232:1" rel="noopener">EML Payments Limited (EML AU)</a> confirmed takeover interest from Bain Capital. However, discussions have ceased. The shares closed 10.5% higher at A$2.94. </li>
<li>The bombed-out share prices of payment companies have supported recent M&amp;A activity such as <a href="https://www.smartkarma.com/entities/afterpay-holdings-ltd" target="_blank" data-smartkarma-citation="entities:24047:1" rel="noopener">Afterpay Holdings (AFY AU)</a>/<a href="https://www.smartkarma.com/entities/square-inc" target="_blank" data-smartkarma-citation="entities:23755:1" rel="noopener">Square Inc (SQ US)</a> and <a href="https://www.smartkarma.com/entities/sezzle-inc" target="_blank" data-smartkarma-citation="entities:30969:1" rel="noopener">Sezzle Inc (SZL AU)</a>/<a href="https://www.smartkarma.com/entities/zip-co-ltd-3708706d-4978-4e29-acbc-d9702b971da9" target="_blank" data-smartkarma-citation="entities:29126:1" rel="noopener">Zip Co Ltd (Z1P AU)</a>.</li>
<li>Despite today’s pop, the shares are still 50% down over the last 12 months. EML’s market positioning and expected stronger 2HFY22 should continue to fuel takeover interest.</li>
</ul>


In response to an AFR article, EML Payments Limited (EML AU) confirmed takeover interest from Bain Capital. However, discussions have ceased. The shares closed 10.5% higher at A$2.94. 
The bombed-out share prices of payment companies have supported recent M&amp;A activity such as Afterpay Holdings (AFY AU)/Square Inc (SQ US) and Sezzle Inc (SZL AU)/Zip Co Ltd (Z1P AU).
Despite today’s pop, the shares are still 50% down over the last 12 months. EML’s market positioning and expected stronger 2HFY22 should continue to fuel takeover interest.


EML Payments Flirtation with Bain Likely Not the Last

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

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 Capital Markets

GoTo Gojek Tokopedia Tbk PT / Equity Capital Markets

<ul>
<li>Superapp <a href="https://www.smartkarma.com/entities/gojek-goto" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo (1379371D IJ)</a> has filed for an IPO to list its shares on the Indonesian Stock Exchange to raise US$1.1-1.25bn at a valuation of about US$24-26bn.</li>
<li>The company plans to use the proceeds to develop its business including for customer acquisition, product development and sales and marketing.</li>
<li>Our SOTP valuation implies that GoTo’s shares are overvalued at the indicative IPO price range.</li>
</ul>


Superapp GoTo (1379371D IJ) has filed for an IPO to list its shares on the Indonesian Stock Exchange to raise US$1.1-1.25bn at a valuation of about US$24-26bn.
The company plans to use the proceeds to develop its business including for customer acquisition, product development and sales and marketing.
Our SOTP valuation implies that GoTo’s shares are overvalued at the indicative IPO price range.


Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

Equity Bottom-Up

<ul>
<li>We see limited upside potential for <a href="https://www.smartkarma.com/entities/upstart-holdings-inc" target="_blank" data-smartkarma-citation="entities:29727:1" rel="noopener">Upstart Holdings Inc (UPST US)</a>  shares after reporting a record 200%+ YoY revenue growth rate in CY’21.   </li>
<li>Our calculations suggest insiders sold ~$1.5 billion worth of Upstart shares since August 2020, including Third Point, CEO of Upstart Holdings, and management of the fintech company. </li>
<li>Rising interest rates and tightening of credit markets may negatively impact revenue, keeping in mind that <a href="https://www.smartkarma.com/entities/upstart-holdings-inc" target="_blank" data-smartkarma-citation="entities:29727:1" rel="noopener">Upstart Holdings Inc (UPST US)</a>  primarily facilitates unsecured personal loans on the platform.</li>
</ul>


We see limited upside potential for Upstart Holdings Inc (UPST US)  shares after reporting a record 200%+ YoY revenue growth rate in CY’21.   
Our calculations suggest insiders sold ~$1.5 billion worth of Upstart shares since August 2020, including Third Point, CEO of Upstart Holdings, and management of the fintech company. 
Rising interest rates and tightening of credit markets may negatively impact revenue, keeping in mind that Upstart Holdings Inc (UPST US)  primarily facilitates unsecured personal loans on the platform.


Upstart Holdings: Slowdown In Revenue Growth And Tightening Of Credit Markets

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.

SBI Sumishin Net Bank  / Equity Capital Markets

<ul>
<li>Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.</li>
<li>Market volatility has put <a href="https://www.smartkarma.com/entities/life-insurance-corp-of-india-lic" target="_blank" data-smartkarma-citation="entities:28829:1" rel="noopener">Life Insurance Corp of India (LIC) (1248Z IN)</a>'s IPO launch in time while <a href="https://www.smartkarma.com/entities/sbi-sumishin-net-bank" target="_blank" data-smartkarma-citation="entities:34572:1" rel="noopener">SBI Sumishin Net Bank (7163 JP)</a> will have to lower its asking valuation.</li>
<li>Placement scene remains quiet with only <a href="https://www.smartkarma.com/entities/zip-co-ltd-3708706d-4978-4e29-acbc-d9702b971da9" target="_blank" data-smartkarma-citation="entities:29126:1" rel="noopener">Zip Co Ltd (Z1P AU)</a> placement and <a href="https://www.smartkarma.com/entities/idp-education-ltd" target="_blank" data-smartkarma-citation="entities:1098:1" rel="noopener">IDP Education (IEL AU)</a> blocks. </li>
</ul>


Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
Market volatility has put Life Insurance Corp of India (LIC) (1248Z IN)'s IPO launch in time while SBI Sumishin Net Bank (7163 JP) will have to lower its asking valuation.
Placement scene remains quiet with only Zip Co Ltd (Z1P AU) placement and IDP Education (IEL AU) blocks. 


ECM Weekly (6th Mar 2022) - SBI Sumishin, Farm Fresh, Arrail, NIO, LIC, ZIP, IDP Education

United States

PayPal Holdings, Inc. operates as a technology platform company that enables digital and mobile payments on behalf of consumers and merchants. The Company offers online payment solutions. PayPal Holdings serves customers worldwide.

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Paypal Holdings (PYPL US)

TMT Pre-1Q Earnings Thoughts

Some thoughts about potentially good earnings setups (ServiceNow and Facebook) vs. not so good setups (Paypal and Intel) for the first wave of TMT...

Aaron Gabin

EML Payments Flirtation with Bain Likely Not the Last

EML confirmed takeover interest from Bain Capital but discussions have ceased. EML’s market positioning and expected stronger 2HFY22 should...

Arun George

GoTo IPO: Peer Comparison and Valuation

Even without conservative assumptions, our SOTP valuation implies that GoTo’s shares are overvalued at the indicative IPO price range.

Shifara Samsudeen, FCMA, CGMA

Upstart Holdings: Slowdown In Revenue Growth And Tightening Of Credit Markets

We think investors should be cautious on Upstart shares due to the slowdown in revenue growth rates and the tightening of credit markets

Andrei Zakharov

ECM Weekly (6th Mar 2022) - SBI Sumishin, Farm Fresh, Arrail, NIO, LIC, ZIP, IDP Education

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.

Sumeet Singh

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