Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

Qualtrics International / Equity Capital Markets

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<p><a href="https://www.smartkarma.com/entities/qualtrics-international-inc" target="_blank" data-smartkarma-citation="entities:27731:1" rel="noopener">Qualtrics (XM US)</a>, a US cloud software company, is aiming to complete its IPO again after two years. In November 2018, <a href="https://www.smartkarma.com/entities/sap-se" target="_blank" data-smartkarma-citation="entities:21704:1" rel="noopener">SAP SE (SAP GR)</a> acquired Qualtrics for $8 billion. SAP has now decided to spin-off Qualtrics and IPO this business. The initial IPO pricing ranges from $20 to $24 per share, which would value <a href="https://www.cnbc.com/2020/12/28/qualtrics-files-s-1-aims-for-valuation-of-up-to-14point4-billion-in-ipo.html" target="_blank" rel="noopener">Qualtrics</a> at $12 billion to $14.4 billion. The Qualtrics IPO is expected to be completed in January/February 2021.</p>
<p>After the IPO, SAP will maintain an 80% stake in Qualtrics. The private equity firm Silver Lake will be buying slightly more than 4% of the Qualtrics shares for $550 million (implying a valuation of $13.7 billion) and the Qualtrics founder Ryan Smith will be buying 1% for $120 million (implying a valuation of $12 billion).</p>
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Qualtrics (XM US), a US cloud software company, is aiming to complete its IPO again after two years. In November 2018, SAP SE (SAP GR) acquired Qualtrics for $8 billion. SAP has now decided to spin-off Qualtrics and IPO this business. The initial IPO pricing ranges from $20 to $24 per share, which would value Qualtrics at $12 billion to $14.4 billion. The Qualtrics IPO is expected to be completed in January/February 2021.
After the IPO, SAP will maintain an 80% stake in Qualtrics. The private equity firm Silver Lake will be buying slightly more than 4% of the Qualtrics shares for $550 million (implying a valuation of $13.7 billion) and the Qualtrics founder Ryan Smith will be buying 1% for $120 million (implying a valuation of $12 billion).


Quality-first, Business-perspective Strategy, Urbem (HK) Limited

Steven Chen

Quality-first, Business-perspective Strategy

Equity Bottom-Up

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<li>Founder-led Technology One has the capability to earn superior returns on capital while expanding predictably and profitably alongside a massive runaway, in our opinion.</li>
<li>Although the share seems a bit elevated at the moment, we feel that the name should be worth following among long-term, quality-focused investors who can wait patiently.</li>
</ul>


Founder-led Technology One has the capability to earn superior returns on capital while expanding predictably and profitably alongside a massive runaway, in our opinion.
Although the share seems a bit elevated at the moment, we feel that the name should be worth following among long-term, quality-focused investors who can wait patiently.


Technology One: Our Top SaaS Pick From APAC

Japan Specialist

Mark Chadwick

<p><span xml:lang="EN-US" data-contrast="auto">A wrong hire, skills mismatch, and inadequate training equals low efficiency and lost productivity. Companies pay a significant price for not correctly managing talent. It does not stop there. Low transparency, missed opportunities, and weak management lead to frustration and dissatisfaction for employees. The result is a lack of motivation and employee exits. Both companies and employees suffer when talent is not </span><span xml:lang="EN-US" data-contrast="auto">adequately managed</span><span xml:lang="EN-US" data-contrast="auto">. Companies can scarcely afford to lose or </span><span xml:lang="EN-US" data-contrast="auto">misallocate</span><span xml:lang="EN-US" data-contrast="auto"> the right people as the costs are enormous - lost productivity, lost business, and a dysfunctional environment that hurts from the top to bottom line. Talent management plays a critical role in the modern company, and in many cases, it can mean the difference between a successful culture and going out of business. Enter <a href="https://www.smartkarma.com/entities/kaonavi-inc" target="_blank" data-smartkarma-citation="entities:29703:1" rel="noopener">Kaonavi Inc (4435 JP)</a> </span></p>
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/166/617/original/image_9811369031603321138858.png?1603321148" class="editor-image img-responsive" data-smartkarma-image-id="166617"></figure>

A wrong hire, skills mismatch, and inadequate training equals low efficiency and lost productivity. Companies pay a significant price for not correctly managing talent. It does not stop there. Low transparency, missed opportunities, and weak management lead to frustration and dissatisfaction for employees. The result is a lack of motivation and employee exits. Both companies and employees suffer when talent is not adequately managed. Companies can scarcely afford to lose or misallocate the right people as the costs are enormous - lost productivity, lost business, and a dysfunctional environment that hurts from the top to bottom line. Talent management plays a critical role in the modern company, and in many cases, it can mean the difference between a successful culture and going out of business. Enter Kaonavi Inc (4435 JP) 


Small Cap Growth: Kaonavi (4435) – Turning Talent into Teams

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<p><span xml:lang="EN-US" data-contrast="auto">In May, Facebook CEO Mark Zuckerberg said that more than 95% of the company’s workforce was working remotely and that it planned to ensure employees could continue to do so on a long-term basis. Google workers will stay remote until summer 2021. Many others made similar announcements. </span><span data-ccp-props='{"201341983":0,"335559739":160,"335559740":259}'> </span></p>
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<p><span xml:lang="EN-US" data-contrast="auto">This would have been unthinkable even a decade ago, but cloud-based platforms are enabling employees to work from anywhere, on any device. Companies must now deploy systems rapidly, in a cost-effective and scalable manner to adapt to this new worldview. </span><span data-ccp-props='{"201341983":0,"335559739":160,"335559740":259}'> </span></p>
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<p><span xml:lang="EN-US" data-contrast="auto"><a href="https://www.smartkarma.com/entities/teamspirit-inc" target="_blank" data-smartkarma-citation="entities:29704:1" rel="noopener">TeamSpirit Inc (4397 JP)</a> ’s</span><span xml:lang="EN-US" data-contrast="auto"> workforce management platform helps Japanese companies to support telework, not only an essential way of working following the outbreak of COVID-19, but also a necessity as companies shift to a hybrid workforce. </span><span data-ccp-props='{"201341983":0,"335559739":160,"335559740":259}'> </span></p>
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<p><strong> <span xml:lang="EN-US" data-contrast="auto">Recent FY8/20 numbers (13 October)</span> </strong></p>
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<p><span xml:lang="EN-US" data-contrast="auto">Q4 revenue +25% YoY to ¥654m (slowed from 38% YoY in Q3)</span><span data-ccp-props='{"201341983":0,"335559739":160,"335559740":259}'> </span></p>
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<p><span xml:lang="EN-US" data-contrast="auto">Gross margin 60%</span><span data-ccp-props='{"201341983":0,"335559739":160,"335559740":259}'> </span></p>
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<p><span xml:lang="EN-US" data-contrast="auto">Annual Recurring Revenue +32% to ¥2.2b</span><span data-ccp-props='{"201341983":0,"335559739":160,"335559740":259}'> </span></p>
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<p><span xml:lang="EN-US" data-contrast="auto">Number of active licenses rose 41% to 269,000</span><span data-ccp-props='{"201341983":0,"335559739":160,"335559740":259}'> <br></span><span xml:lang="EN-US" data-contrast="auto">Number of client companies 1,409 (+14% YoY; +2% QoQ)</span><span data-ccp-props='{"201341983":0,"335559739":160,"335559740":259}'> </span></p>
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<p><span xml:lang="EN-US" data-contrast="auto">Covid had a negative impact on the business. The inflow of leads slowed due to the cancellation of promotional events. On boarding was delayed as customer struggled with the unfamiliarity of telework, with small businesses in particular slowing in terms of </span><span xml:lang="EN-US" data-contrast="auto">licenses</span><span xml:lang="EN-US" data-contrast="auto"> added.</span><span xml:lang="EN-US" data-contrast="auto"> </span><span xml:lang="EN-US" data-contrast="auto">The company guided for 29% revenue growth in FY8/21</span><span data-ccp-props='{"201341983":0,"335559739":160,"335559740":259}'> </span></p>
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<p><span xml:lang="EN-US" data-contrast="auto">The stock has corrected by around 20% in the week following full year earnings and is worth looking at for long-term growth investors.</span></p>
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In May, Facebook CEO Mark Zuckerberg said that more than 95% of the company’s workforce was working remotely and that it planned to ensure employees could continue to do so on a long-term basis. Google workers will stay remote until summer 2021. Many others made similar announcements.  


This would have been unthinkable even a decade ago, but cloud-based platforms are enabling employees to work from anywhere, on any device. Companies must now deploy systems rapidly, in a cost-effective and scalable manner to adapt to this new worldview.  


TeamSpirit Inc (4397 JP) ’s workforce management platform helps Japanese companies to support telework, not only an essential way of working following the outbreak of COVID-19, but also a necessity as companies shift to a hybrid workforce.  

 Recent FY8/20 numbers (13 October) 


Q4 revenue +25% YoY to ¥654m (slowed from 38% YoY in Q3) 


Gross margin 60% 


Annual Recurring Revenue +32% to ¥2.2b 


Number of active licenses rose 41% to 269,000  Number of client companies 1,409 (+14% YoY; +2% QoQ) 



Covid had a negative impact on the business. The inflow of leads slowed due to the cancellation of promotional events. On boarding was delayed as customer struggled with the unfamiliarity of telework, with small businesses in particular slowing in terms of licenses added. The company guided for 29% revenue growth in FY8/21 


The stock has corrected by around 20% in the week following full year earnings and is worth looking at for long-term growth investors.


Small Cap Growth: TeamSpirit (4397) - Nirvana for Workers

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<p>The MSCI ACWI index (USD) is breaking out to all-time highs while the MSCI EM index (local) is breaking above its prior highs from January. This is bullish and will continue to be as long as there is an absence of breakdowns. On the other hand, Europe’s <strong>EURO STOXX 50</strong> and Japan’s <strong>TOPIX </strong>have struggled to break above resistance and their RS remains near the lows -- be selective. In addition to covering important technical levels across all markets, we highlight additional ideas in the following Sectors: <strong>Services, Communications, Industrials, </strong>and <strong>Transportation.</strong></p>

The MSCI ACWI index (USD) is breaking out to all-time highs while the MSCI EM index (local) is breaking above its prior highs from January. This is bullish and will continue to be as long as there is an absence of breakdowns. On the other hand, Europe’s EURO STOXX 50 and Japan’s TOPIX have struggled to break above resistance and their RS remains near the lows -- be selective. In addition to covering important technical levels across all markets, we highlight additional ideas in the following Sectors: Services, Communications, Industrials, and Transportation.

Global Equity Strategy: Bullish Outlook Intact

Germany

SAP SE is a multinational software company. The Company develops business software, including e-business and enterprise management software, consults on organizational usage of its applications software, and provides training services. SAP markets its products and services worldwide.

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SAP (SAP GR)

Qualtrics IPO Preview

Qualtrics, which was acquired by SAP for $8 billion two years ago, is trying to complete an IPO again. The initial IPO valuation range of Qualtrics...

Douglas Kim

Technology One: Our Top SaaS Pick From APAC

Although the share seems a bit elevated at the moment, we feel that Technology One should be worth following among long-term, quality-focused...

Steven Chen

Small Cap Growth: Kaonavi (4435) – Turning Talent into Teams

Talent management plays a critical role in the modern company, and in many cases, it can mean the difference between a successful culture and going...

Mark Chadwick

Small Cap Growth: TeamSpirit (4397) - Nirvana for Workers

TeamSpirit is a cloud-based Workforce Management SaaS that enables workers to work from anywhere and allows companies to get the best out of their...

Mark Chadwick

Global Equity Strategy: Bullish Outlook Intact

The MSCI ACWI index (USD) is breaking out to all-time highs while the MSCI EM index (local) is breaking above its prior highs from January. This is...

Vermilion Research

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