Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mercadolibre-inc" target="_blank" data-smartkarma-citation="entities:27954:1" rel="noopener">MercadoLibre Inc (MELI US)</a> shares have continued to re-rate, supported by positive 3Q20 results</li>
<li>E-commerce and payments growth rates are accelerating, as MELI is a key LatAm beneficiary of the pandemic shift to e-commerce and digital payments</li>
<li>Consensus estimate revisions are positive, as shown in the chart, and this has powered share price momentum</li>
<li>On valuations, however, we believe that these are stretched; the 2021 revenue multiple is double that of <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a> </li>
<li>Even on our generous assumptions for a simple SOTP valuation, MELI valuations look stretched</li>
<li>In the light of the positive vaccine news, we believe that tech pandemic beneficiaries, including MELI, are exposed to sentiment-driven investor rotation out of high valuation tech names and into value stocks</li>
<li>Risks to our cautious view on MELI include a continued fast pace of e-commerce and digital payments activity in LatAm driving revenue, EBITDA and net profit higher</li>
</ul>



MercadoLibre Inc (MELI US) shares have continued to re-rate, supported by positive 3Q20 results
E-commerce and payments growth rates are accelerating, as MELI is a key LatAm beneficiary of the pandemic shift to e-commerce and digital payments
Consensus estimate revisions are positive, as shown in the chart, and this has powered share price momentum
On valuations, however, we believe that these are stretched; the 2021 revenue multiple is double that of Alibaba Group (BABA US) 
Even on our generous assumptions for a simple SOTP valuation, MELI valuations look stretched
In the light of the positive vaccine news, we believe that tech pandemic beneficiaries, including MELI, are exposed to sentiment-driven investor rotation out of high valuation tech names and into value stocks
Risks to our cautious view on MELI include a continued fast pace of e-commerce and digital payments activity in LatAm driving revenue, EBITDA and net profit higher


Mercado Libre (MELI US): Share Momentum Driven by Fundamentals, but Exposed to Stretched Valuations

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

<div><p><a href="https://www.smartkarma.com/entities/ant-financial-services-group" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial (1051260D CH)</a> has almost raised around USD35bn via a dual listing on both Hong Kong Exchange and Shanghai STAR board. </p></div><div><p>We have covered various aspects of the deal in our earlier notes, link to which are below.</p></div><div><p>In this note, I'll talk about the latest updates coming out about the STAR market listing.</p></div><div><div><h3>Our previous coverage on Ant Group</h3></div></div><div><ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/ant-financial-ipo-early-thought-what-s-new-about-the-listing-news" target="_blank" rel="noopener">Ant Financial IPO Early Thought: Understand the Fintech Empire, Growth and Risk Factors</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-financial-ipo-early-thought-understand-the-fintech-empire-growth-and-risk-factors" target="_blank" rel="noopener">Ant Financial (蚂蚁金服) IPO Early Thought: What’s New About the Listing News</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-ipo-first-take-no-1-fintech-from-all-angles" target="_blank" rel="noopener">Ant Group (蚂蚁集团) IPO First-Take: No. 1 Fintech from All Angles</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-ipo-numbers-suggest-it-s-more-tech-than-financials" target="_blank" rel="noopener">Ant Group (蚂蚁集团) IPO: Numbers Suggest It’s More Tech than Financials</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-things-to-clarify-questions-to-ask-falling-fees-margins-cash-flow" target="_blank" rel="noopener">Ant Group (蚂蚁集团) Pre-IPO: Things to Clarify/​Questions to Ask - Falling Fees, Margins, Cash Flow</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-dual-listing-makes-early-index-inclusion-tricky" target="_blank" rel="noopener">Ant Group (蚂蚁集团) Pre-IPO: Dual Listing Makes Early Index Inclusion Tricky</a></li>
<li><a href="https://www.smartkarma.com/insights/alipay-s-advantage-over-wechat-pay-in-physical-stores" target="_blank" rel="noopener">AliPay’s Advantage over WeChat Pay in Physical Stores</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-running-neck-and-neck-with-tencent-in-direct-financial-services" target="_blank" rel="noopener">Ant Group (蚂蚁集团) Running Neck and Neck with Tencent in Direct Financial Services</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-impact-assessment-of-the-new-rule-for-financial-holding-companies" target="_blank" rel="noopener">Ant Group (蚂蚁集团) Pre-IPO: Impact Assessment of the New Rule for Financial Holding Companies</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-peer-comparison-payments-baffling-scale-small-tweaks-for-large-profits" target="_blank" rel="noopener">Ant Group Pre-IPO: Peer Comparison - Payments - Baffling Scale, Small Tweaks for Large Profits</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-peer-comparison-credittech-larger-scale-similar-growth-lower-credit-risk" target="_blank" rel="noopener">Ant Group Pre-IPO: Peer Comparison - CreditTech - Larger Scale, Similar Growth, Lower Credit Risk</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-first-stab-at-valuation" target="_blank" rel="noopener">Ant Group Pre-IPO: First Stab at Valuation</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-quick-take-on-ftse-and-msci-s-clearer-guidelines" target="_blank" rel="noopener">Ant Group Pre-IPO: Quick Take on FTSE and MSCI’s Clearer Guidelines</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-deal-structure-phip-updates-short-term-trades" target="_blank" rel="noopener">Ant Group Pre-IPO: Deal Structure, PHIP Updates, Short-Term Trades</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-updated-valuation-it-s-going-higher" target="_blank" rel="noopener">Ant Group Pre-IPO: Updated Valuation. It’s Going Higher.</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-ipo-final-say-strategics-index-impact" target="_blank" rel="noopener">Ant Group IPO: Final Say. Strategics, Index Impact</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-ipo-star-market-trading-stats-a-h-spread" target="_blank" rel="noopener">Ant Group IPO:  STAR Market Trading Stats, A/​H Spread</a></li>
</ul></div>

Ant Financial (1051260D CH) has almost raised around USD35bn via a dual listing on both Hong Kong Exchange and Shanghai STAR board. We have covered various aspects of the deal in our earlier notes, link to which are below.In this note, I'll talk about the latest updates coming out about the STAR market listing.Our previous coverage on Ant Group
Ant Financial IPO Early Thought: Understand the Fintech Empire, Growth and Risk Factors
Ant Financial (蚂蚁金服) IPO Early Thought: What’s New About the Listing News
Ant Group (蚂蚁集团) IPO First-Take: No. 1 Fintech from All Angles
Ant Group (蚂蚁集团) IPO: Numbers Suggest It’s More Tech than Financials
Ant Group (蚂蚁集团) Pre-IPO: Things to Clarify/​Questions to Ask - Falling Fees, Margins, Cash Flow
Ant Group (蚂蚁集团) Pre-IPO: Dual Listing Makes Early Index Inclusion Tricky
AliPay’s Advantage over WeChat Pay in Physical Stores
Ant Group (蚂蚁集团) Running Neck and Neck with Tencent in Direct Financial Services
Ant Group (蚂蚁集团) Pre-IPO: Impact Assessment of the New Rule for Financial Holding Companies
Ant Group Pre-IPO: Peer Comparison - Payments - Baffling Scale, Small Tweaks for Large Profits
Ant Group Pre-IPO: Peer Comparison - CreditTech - Larger Scale, Similar Growth, Lower Credit Risk
Ant Group Pre-IPO: First Stab at Valuation
Ant Group Pre-IPO: Quick Take on FTSE and MSCI’s Clearer Guidelines
Ant Group Pre-IPO: Deal Structure, PHIP Updates, Short-Term Trades
Ant Group Pre-IPO: Updated Valuation. It’s Going Higher.
Ant Group IPO: Final Say. Strategics, Index Impact
Ant Group IPO:  STAR Market Trading Stats, A/​H Spread


Ant Group IPO - Quick Note - Shanghai Suspends STAR Market Listing

<div><p><a href="https://www.smartkarma.com/entities/ant-financial-services-group" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Financial (1051260D CH)</a> has almost raised around USD35bn via a dual listing on both Hong Kong Exchange and Shanghai STAR board. </p></div><div><p>We have covered various aspects of the deal in our earlier notes, link to which are below.</p></div><div><p>In this note, I'll talk about the latest updates issued by HSCEI overnight.</p></div><div><div><h3>Our previous coverage on Ant Group</h3></div></div><div><ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/ant-financial-ipo-early-thought-what-s-new-about-the-listing-news" target="_blank" rel="noopener">Ant Financial IPO Early Thought: Understand the Fintech Empire, Growth and Risk Factors</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-financial-ipo-early-thought-understand-the-fintech-empire-growth-and-risk-factors" target="_blank" rel="noopener">Ant Financial (蚂蚁金服) IPO Early Thought: What’s New About the Listing News</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-ipo-first-take-no-1-fintech-from-all-angles" target="_blank" rel="noopener">Ant Group (蚂蚁集团) IPO First-Take: No. 1 Fintech from All Angles</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-ipo-numbers-suggest-it-s-more-tech-than-financials" target="_blank" rel="noopener">Ant Group (蚂蚁集团) IPO: Numbers Suggest It’s More Tech than Financials</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-things-to-clarify-questions-to-ask-falling-fees-margins-cash-flow" target="_blank" rel="noopener">Ant Group (蚂蚁集团) Pre-IPO: Things to Clarify/​Questions to Ask - Falling Fees, Margins, Cash Flow</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-dual-listing-makes-early-index-inclusion-tricky" target="_blank" rel="noopener">Ant Group (蚂蚁集团) Pre-IPO: Dual Listing Makes Early Index Inclusion Tricky</a></li>
<li><a href="https://www.smartkarma.com/insights/alipay-s-advantage-over-wechat-pay-in-physical-stores" target="_blank" rel="noopener">AliPay’s Advantage over WeChat Pay in Physical Stores</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-running-neck-and-neck-with-tencent-in-direct-financial-services" target="_blank" rel="noopener">Ant Group (蚂蚁集团) Running Neck and Neck with Tencent in Direct Financial Services</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-impact-assessment-of-the-new-rule-for-financial-holding-companies" target="_blank" rel="noopener">Ant Group (蚂蚁集团) Pre-IPO: Impact Assessment of the New Rule for Financial Holding Companies</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-peer-comparison-payments-baffling-scale-small-tweaks-for-large-profits" target="_blank" rel="noopener">Ant Group Pre-IPO: Peer Comparison - Payments - Baffling Scale, Small Tweaks for Large Profits</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-peer-comparison-credittech-larger-scale-similar-growth-lower-credit-risk" target="_blank" rel="noopener">Ant Group Pre-IPO: Peer Comparison - CreditTech - Larger Scale, Similar Growth, Lower Credit Risk</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-first-stab-at-valuation" target="_blank" rel="noopener">Ant Group Pre-IPO: First Stab at Valuation</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-quick-take-on-ftse-and-msci-s-clearer-guidelines" target="_blank" rel="noopener">Ant Group Pre-IPO: Quick Take on FTSE and MSCI’s Clearer Guidelines</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-deal-structure-phip-updates-short-term-trades" target="_blank" rel="noopener">Ant Group Pre-IPO: Deal Structure, PHIP Updates, Short-Term Trades</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-pre-ipo-updated-valuation-it-s-going-higher" target="_blank" rel="noopener">Ant Group Pre-IPO: Updated Valuation. It’s Going Higher.</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-ipo-final-say-strategics-index-impact" target="_blank" rel="noopener">Ant Group IPO: Final Say. Strategics, Index Impact</a></li>
<li><a href="https://www.smartkarma.com/insights/ant-group-ipo-star-market-trading-stats-a-h-spread" target="_blank" rel="noopener">Ant Group IPO:  STAR Market Trading Stats, A/​H Spread</a></li>
</ul></div>

Ant Financial (1051260D CH) has almost raised around USD35bn via a dual listing on both Hong Kong Exchange and Shanghai STAR board. We have covered various aspects of the deal in our earlier notes, link to which are below.In this note, I'll talk about the latest updates issued by HSCEI overnight.Our previous coverage on Ant Group
Ant Financial IPO Early Thought: Understand the Fintech Empire, Growth and Risk Factors
Ant Financial (蚂蚁金服) IPO Early Thought: What’s New About the Listing News
Ant Group (蚂蚁集团) IPO First-Take: No. 1 Fintech from All Angles
Ant Group (蚂蚁集团) IPO: Numbers Suggest It’s More Tech than Financials
Ant Group (蚂蚁集团) Pre-IPO: Things to Clarify/​Questions to Ask - Falling Fees, Margins, Cash Flow
Ant Group (蚂蚁集团) Pre-IPO: Dual Listing Makes Early Index Inclusion Tricky
AliPay’s Advantage over WeChat Pay in Physical Stores
Ant Group (蚂蚁集团) Running Neck and Neck with Tencent in Direct Financial Services
Ant Group (蚂蚁集团) Pre-IPO: Impact Assessment of the New Rule for Financial Holding Companies
Ant Group Pre-IPO: Peer Comparison - Payments - Baffling Scale, Small Tweaks for Large Profits
Ant Group Pre-IPO: Peer Comparison - CreditTech - Larger Scale, Similar Growth, Lower Credit Risk
Ant Group Pre-IPO: First Stab at Valuation
Ant Group Pre-IPO: Quick Take on FTSE and MSCI’s Clearer Guidelines
Ant Group Pre-IPO: Deal Structure, PHIP Updates, Short-Term Trades
Ant Group Pre-IPO: Updated Valuation. It’s Going Higher.
Ant Group IPO: Final Say. Strategics, Index Impact
Ant Group IPO:  STAR Market Trading Stats, A/​H Spread


Ant Group IPO - Index Inclusion Quick Note: Now HSCEI Wants to Gate Crash the Party

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ant-financial-services-group" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Group (6688 HK)</a> has priced above the initial market capitalisation range of USD200 to USD300bn, at USD317bn including its over-allotment option of shares</li>
<li>Ant’s IPO valuation reflects the assumptions in our ambitious scenario SOTP valuation</li>
<li>Based on earnings and EBITDA multiples, Ant Group looks attractive relative to payments companies and fast growth investment and wealth managers</li>
<li>Ant is at a slight discount to the China MegaTech comparables, and we believe that it warrants a premium valuation to its China peers</li>
<li>Ant’s premium growth potential in digital finance, leveraging off its leading digital payments footprint, indicates further upside potential to the shares post IPO, in our view</li>
<li>Risks to our positive view on Ant Group include increased regulatory restrictions in China, heightened geopolitical tensions impacting demand for the shares at IPO and weaker than expected GDP growth limiting growth potential, especially in China</li>
</ul>



Ant Group (6688 HK) has priced above the initial market capitalisation range of USD200 to USD300bn, at USD317bn including its over-allotment option of shares
Ant’s IPO valuation reflects the assumptions in our ambitious scenario SOTP valuation
Based on earnings and EBITDA multiples, Ant Group looks attractive relative to payments companies and fast growth investment and wealth managers
Ant is at a slight discount to the China MegaTech comparables, and we believe that it warrants a premium valuation to its China peers
Ant’s premium growth potential in digital finance, leveraging off its leading digital payments footprint, indicates further upside potential to the shares post IPO, in our view
Risks to our positive view on Ant Group include increased regulatory restrictions in China, heightened geopolitical tensions impacting demand for the shares at IPO and weaker than expected GDP growth limiting growth potential, especially in China


Ant Group (6688 HK): IPO Pricing Warrants a Re-Rating

Equity Analyst, LightStream Research

Supun Walpola

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.

<ul><li>
<a href="https://www.smartkarma.com/entities/ant-financial-services-group" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Group (1051260D CH)</a> has priced the Hong Kong leg of its IPO at HKD 80.00 per share. At this price, Ant’s dual-listing will raise around USD 34bn, and value the company at a market cap of around USD 313bn. </li></ul><ul>
<li>As we had anticipated in our previous note, <a href="https://www.smartkarma.com/insights/ant-group-ipo-a-good-bargain-against-global-fintech-peers-with-healthy-short-term-upside-potential" target="_blank" data-smartkarma-citation="insights:43906" rel="noopener">Ant Group IPO: A Good Bargain Against Global Fintech Peers with Healthy Short-Term Upside Potential</a>, Ant’s IPO valuation is significantly above the initially rumoured valuation of USD 250bn. </li>
<li>In this note, we present our final thoughts on Ant’s IPO pricing, based on a SOTP valuation.</li>
</ul>


Ant Group (1051260D CH) has priced the Hong Kong leg of its IPO at HKD 80.00 per share. At this price, Ant’s dual-listing will raise around USD 34bn, and value the company at a market cap of around USD 313bn. 
As we had anticipated in our previous note, Ant Group IPO: A Good Bargain Against Global Fintech Peers with Healthy Short-Term Upside Potential, Ant’s IPO valuation is significantly above the initially rumoured valuation of USD 250bn. 
In this note, we present our final thoughts on Ant’s IPO pricing, based on a SOTP valuation.


Ant Group IPO: More Upside to the IPO Valuation

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Paypal Holdings (PYPL US)

Ant Group IPO - Quick Note - Shanghai Suspends STAR Market Listing

Ant Group has almost raised around USD35bn via a dual listing in both Hong Kong and Shanghai. In this note, I'll talk about the latest updates...

Sumeet Singh

Ant Group IPO - Index Inclusion Quick Note: Now HSCEI Wants to Gate Crash the Party

Ant Group has almost raised around USD35bn via a dual listing. We have covered various aspects of the deal in our earlier notes. In this note, I'll...

Sumeet Singh

Ant Group (6688 HK): IPO Pricing Warrants a Re-Rating

Ant Group's share price at IPO is above the original expected range; still, we expect solid share re-rating potential given its growth prospects...

Victor Galliano

Ant Group IPO: More Upside to the IPO Valuation

Ant Group has priced the Hong Kong leg of its IPO at HKD 80.00 per share valuing the company at USD 313bn. In this note, we present our final...

Supun Walpola

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Mercado Libre (MELI US): Share Momentum Driven by Fundamentals, but Exposed to Stretched Valuations

Mercado Libre is a beneficiary of the pandemic-driven shift to e-commerce and e-payments, but its valuation is stretched, EPS revisions are fading...

Victor Galliano

Ant Group IPO - Quick Note - Shanghai Suspends STAR Market Listing

Ant Group has almost raised around USD35bn via a dual listing in both Hong Kong and Shanghai. In this note, I'll talk about the latest updates...

Sumeet Singh

Ant Group IPO - Index Inclusion Quick Note: Now HSCEI Wants to Gate Crash the Party

Ant Group has almost raised around USD35bn via a dual listing. We have covered various aspects of the deal in our earlier notes. In this note, I'll...

Sumeet Singh

Ant Group (6688 HK): IPO Pricing Warrants a Re-Rating

Ant Group's share price at IPO is above the original expected range; still, we expect solid share re-rating potential given its growth prospects...

Victor Galliano

Ant Group IPO: More Upside to the IPO Valuation

Ant Group has priced the Hong Kong leg of its IPO at HKD 80.00 per share valuing the company at USD 313bn. In this note, we present our final...

Supun Walpola