Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

Mirae Asset Securities / Equity Bottom-Up

<ul>
<li>It has been reported in numerous local media outlets that WeBull is discussing with the local financial authorities to enter the Korean retail stock brokerage market.</li>
<li>If the Korean financial authorities provide a license to WeBull to directly provide stock brokerage services to the Korean retail market, this would be the first case ever.</li>
<li>If FSC grants a full license to WeBull to operate stock brokerage services to retail investors in Korea, this could result in the local brokerages losing market shares to WeBull</li>
</ul>


It has been reported in numerous local media outlets that WeBull is discussing with the local financial authorities to enter the Korean retail stock brokerage market.
If the Korean financial authorities provide a license to WeBull to directly provide stock brokerage services to the Korean retail market, this would be the first case ever.
If FSC grants a full license to WeBull to operate stock brokerage services to retail investors in Korea, this could result in the local brokerages losing market shares to WeBull


WeBull In Discussions With Financial Authorities to Enter the Korean Retail Stock Brokerage Market

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.

Event-Driven

<ul>
<li>Softbank Vision Funds 1 and 2 were the biggest combined holdings at December 2022, accounting for 30% of group equity value; SVF private companies accounted for 73% of equity value</li>
<li>To December-end 2022, public companies in SVF2 were marked down by 52% versus investment cost, whereas SVF2 private companies were marked down by a more modest 33% versus investment cost</li>
<li>We believe that SVF2 private company valuations are at risk of further markdowns in 4QFY22 results, with many of these investments made close to the period of peak pandemic valuations</li>
</ul>


Softbank Vision Funds 1 and 2 were the biggest combined holdings at December 2022, accounting for 30% of group equity value; SVF private companies accounted for 73% of equity value
To December-end 2022, public companies in SVF2 were marked down by 52% versus investment cost, whereas SVF2 private companies were marked down by a more modest 33% versus investment cost
We believe that SVF2 private company valuations are at risk of further markdowns in 4QFY22 results, with many of these investments made close to the period of peak pandemic valuations


Softbank (9984 JP) – Focus on the SVFs, Are the Private Companies Appropriately Marked?

<ul>
<li>The planned eToro IPO via SPAC merger with FinTech V was terminated in early July, due delayed regulatory process as well as poor market conditions</li>
<li>The now defunct SPAC deal had implied an eToro valuation in excess of USD10bn; post failed SPAC deal, its latest funding round implies a valuation range of USD5bn to USD6bn</li>
<li>Softbank made its eToro investment through the Vision Fund 2 in 4Q 2020; Softbank had been counting on the SPAC deal with FinTech V as its partial eToro exit strategy</li>
</ul>


The planned eToro IPO via SPAC merger with FinTech V was terminated in early July, due delayed regulatory process as well as poor market conditions
The now defunct SPAC deal had implied an eToro valuation in excess of USD10bn; post failed SPAC deal, its latest funding round implies a valuation range of USD5bn to USD6bn
Softbank made its eToro investment through the Vision Fund 2 in 4Q 2020; Softbank had been counting on the SPAC deal with FinTech V as its partial eToro exit strategy


Softbank (9984 JP) – EToro’s Funding “Down Round”

Fundamental Short Selling Research

Eric Fernandez, CFA

TwoRiversAnalytics

<ul>
<li>This model uncovers companies facing recent sharp cuts in estimates. These shorts can have very disparate characteristics.</li>
<li>The key judgement involves whether the negative revisions are temporary or if they are indications of ongoing weakness in the business.  </li>
<li>Breaking Estimates stocks often continue to decline after the cuts.  This week we flag Robinhood Mkts, Seagen, Zimmer Biomet, Cerence</li>
</ul>


This model uncovers companies facing recent sharp cuts in estimates. These shorts can have very disparate characteristics.
The key judgement involves whether the negative revisions are temporary or if they are indications of ongoing weakness in the business.  
Breaking Estimates stocks often continue to decline after the cuts.  This week we flag Robinhood Mkts, Seagen, Zimmer Biomet, Cerence


Breaking Estimates Short Candidates: Robinhood Mkts, Seagen, Zimmer Biomet, Cerence

Fintech & EM-focused Analyst, KT Capital Group

Alec Tseung

Fintech & EM-focused Analyst

KT Capital Group

Principal investments and advisory firm that focuses on connecting the CIS countries with East Asia.

Principal investments and advisory firm

<ul>
<li>
<a href="https://www.smartkarma.com/entities/coinbase-global-inc" target="_blank" data-smartkarma-citation="entities:32227:1" rel="noopener">Coinbase (COIN US)</a> has significant growth potential in non-transaction revenue with its crypto platform strategy and various initiatives underway.</li>
<li>This would also help the company move away from competing just on fees in the long run, although fee compression is unlikely to materialize in the medium term.</li>
<li>Using P/S ignores the company's profitability. On a P/E basis, the company's valuation looks reasonable compared to other major Fintech/payments peers.  </li>
</ul>



Coinbase (COIN US) has significant growth potential in non-transaction revenue with its crypto platform strategy and various initiatives underway.
This would also help the company move away from competing just on fees in the long run, although fee compression is unlikely to materialize in the medium term.
Using P/S ignores the company's profitability. On a P/E basis, the company's valuation looks reasonable compared to other major Fintech/payments peers.  


2022 High Conviction: Coinbase Is More Than Trading Coins

United States

Robinhood Markets, Inc. operates a financial services platform. The Company offers brokerage and cash management applications such as stocks, exchange-traded funds, options, and cryptocurrency. Robinhood Markets serves clients in the United States.

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Robinhood Markets (HOOD US)

WeBull In Discussions With Financial Authorities to Enter the Korean Retail Stock Brokerage Market

If the Korean financial authorities provide a license to WeBull to directly provide stock brokerage services to the Korean retail market, this...

Douglas Kim

Softbank (9984 JP) – Focus on the SVFs, Are the Private Companies Appropriately Marked?

The NAV could be 10%-15% lower than stated now at the mid-May results release, due to a further squeeze in private company valuations; this would...

Victor Galliano

Softbank (9984 JP) – EToro’s Funding “Down Round”

Softbank fintech holding eToro had its IPO plans de-railed and now its latest funding efforts point to a "down round"; even at its lower valuation...

Victor Galliano

Breaking Estimates Short Candidates: Robinhood Mkts, Seagen, Zimmer Biomet, Cerence

This model uncovers companies facing recent declines in estimates. This week we flag Robinhood Mkts, Seagen, Zimmer Biomet, Cerence

Eric Fernandez, CFA

2022 High Conviction: Coinbase Is More Than Trading Coins

The fast development in the broader crypto economy could present significant growth potential to Coinbase (non-transaction revenue). This will...

Alec Tseung

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