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.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a>’s 180-day lock-up period on its 89.75% <a href="https://www.smartkarma.com/entities/arm-holdings-inc" target="_blank" data-smartkarma-citation="entities:21816:1" rel="noopener">ARM Holdings (ARM US)</a> shareholding expires on 12 March. SoftBank’s stake is worth US$124 billion.</li>
<li>SoftBank will likely monetise its ARM stake using the <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba (ADR) (BABA US)</a> playbook. This playbook uses prepaid forward contracts to raise capital with eventual settlement through shares. </li>
<li>ARM is currently trading 2.6x its IPO price on AI-driven hype. ARM trades at a premium multiple to <a href="https://www.smartkarma.com/entities/nvidia-corp" target="_blank" data-smartkarma-citation="entities:5891:1" rel="noopener">NVIDIA Corp (NVDA US)</a>, despite forecasted lower growth and margin.  </li>
</ul>



Softbank Group (9984 JP)’s 180-day lock-up period on its 89.75% ARM Holdings (ARM US) shareholding expires on 12 March. SoftBank’s stake is worth US$124 billion.
SoftBank will likely monetise its ARM stake using the Alibaba (ADR) (BABA US) playbook. This playbook uses prepaid forward contracts to raise capital with eventual settlement through shares. 
ARM is currently trading 2.6x its IPO price on AI-driven hype. ARM trades at a premium multiple to NVIDIA Corp (NVDA US), despite forecasted lower growth and margin.  


ARM Holdings (ARM US): Lock up Expiry on 12 March

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

<ul>
<li>In Aug 2022, <a href="https://www.smartkarma.com/entities/zomato-ltd" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOMATO IN)</a> completed the acquisition of 91% of Blinkit’s outstanding shares via issuing its own shares. These shares were released from their lockup in Aug 2023.</li>
<li>Leading to a selldown by <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> in the same month, followed by another selldown in Oct 2023. Softbank will once again be released from its lockup soon.</li>
<li>In this note, we will talk about the lock-up dynamics and recent updates.</li>
</ul>


In Aug 2022, Zomato (ZOMATO IN) completed the acquisition of 91% of Blinkit’s outstanding shares via issuing its own shares. These shares were released from their lockup in Aug 2023.
Leading to a selldown by Softbank Group (9984 JP) in the same month, followed by another selldown in Oct 2023. Softbank will once again be released from its lockup soon.
In this note, we will talk about the lock-up dynamics and recent updates.


Zomato Lock-Up - Last of the Softbank Selldown

<ul>
<li>As per Reuters, <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a> could look to sell up to 10% of <a href="https://www.smartkarma.com/entities/denso-corp" target="_blank" data-smartkarma-citation="entities:18703:1" rel="noopener">Denso Corp (6902 JP)</a> to raise around US$4.7bn before the end of the year.</li>
<li>Toyota is the company’s largest shareholder and its largest customer.</li>
<li>In this note, we will talk about the deal dynamics.</li>
</ul>


As per Reuters, Toyota Motor (7203 JP) could look to sell up to 10% of Denso Corp (6902 JP) to raise around US$4.7bn before the end of the year.
Toyota is the company’s largest shareholder and its largest customer.
In this note, we will talk about the deal dynamics.


Denso Corp Placement - Possible Placement by Toyota to Raise US$4.7bn

<ul>
<li>In Jun 2023, CPPIB raised around US$750m via selling a 1.6% stake in <a href="https://www.smartkarma.com/entities/kotak-mahindra-bank-ltd" target="_blank" data-smartkarma-citation="entities:126:1" rel="noopener">Kotak Mahindra Bank (KMB IN)</a>. Prior to that it had sold a similar amount in Mar 2022.</li>
<li>CPPIB will be released from its placement linked lockup early next month.</li>
<li>In this note, we will talk about the lockup dynamics and past deals performance.</li>
</ul>


In Jun 2023, CPPIB raised around US$750m via selling a 1.6% stake in Kotak Mahindra Bank (KMB IN). Prior to that it had sold a similar amount in Mar 2022.
CPPIB will be released from its placement linked lockup early next month.
In this note, we will talk about the lockup dynamics and past deals performance.


Kotak Mahindra Bank - US$1.2 Billion Lockup Release

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>There is downside risk to SoftBank’s NAV, due to valuations relating to Arm and the Vision Funds including LatAm; on aggregate, these holdings account for 70% of group equity value</li>
<li>We believe that Arm’s super-premium valuation is unsustainable; there is lack of transparency on the valuations relating to the unlisted Vision Fund holdings, especially in SVF2</li>
<li>We estimate that SoftBank shares trade at a 44% NAV discount, tighter than the average at the end of the last eight quarters; add to this Arm’s current over valuation</li>
</ul>


There is downside risk to SoftBank’s NAV, due to valuations relating to Arm and the Vision Funds including LatAm; on aggregate, these holdings account for 70% of group equity value
We believe that Arm’s super-premium valuation is unsustainable; there is lack of transparency on the valuations relating to the unlisted Vision Fund holdings, especially in SVF2
We estimate that SoftBank shares trade at a 44% NAV discount, tighter than the average at the end of the last eight quarters; add to this Arm’s current over valuation


SoftBank Group (9984 JP): More Downside Risk to the NAV than Upside Potential

Japan

SoftBank Group Corp provides telecommunication services.  The Company also operates ADSL (Asymmetric Digital Subscriber Line) and fiber optic high-speed Internet connection, e-Commerce businesses, and Internet based advertising and auction businesses.

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Softbank Group (ADR) (SFTBY US)

ARM Holdings (ARM US): Lock up Expiry on 12 March

SoftBank will likely monetise its ARM stake using the Alibaba playbook. This playbook uses prepaid forward contracts to raise capital with eventual...

Arun George

Zomato Lock-Up - Last of the Softbank Selldown

In Aug 2022, Zomato completed the acquisition of 91% of Blinkit’s outstanding shares via issuing its own shares. This has led to two earlier...

Sumeet Singh

Denso Corp Placement - Possible Placement by Toyota to Raise US$4.7bn

As per Reuters, Toyota Motor (7203 JP) could look to sell up to 10% of Denso Corp (6902 JP) to raise around US$4.7bn before the end of the year.

Sumeet Singh

Kotak Mahindra Bank - US$1.2 Billion Lockup Release

In Jun 2023, CPPIB raised around US$750m via selling a 1.6% stake in Kotak Mahindra Bank (KMB IN). Prior to that it had sold a similar amount in...

Sumeet Singh

SoftBank Group (9984 JP): More Downside Risk to the NAV than Upside Potential

SoftBank trades at a 44% discount to the NAV; it has downside risk due to high market valuations of Arm and the unlisted SVF holdings lack...

Victor Galliano

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

ARM Holdings (ARM US): Lock up Expiry on 12 March

SoftBank will likely monetise its ARM stake using the Alibaba playbook. This playbook uses prepaid forward contracts to raise capital with eventual...

Arun George

Zomato Lock-Up - Last of the Softbank Selldown

In Aug 2022, Zomato completed the acquisition of 91% of Blinkit’s outstanding shares via issuing its own shares. This has led to two earlier...

Sumeet Singh

Denso Corp Placement - Possible Placement by Toyota to Raise US$4.7bn

As per Reuters, Toyota Motor (7203 JP) could look to sell up to 10% of Denso Corp (6902 JP) to raise around US$4.7bn before the end of the year.

Sumeet Singh

Kotak Mahindra Bank - US$1.2 Billion Lockup Release

In Jun 2023, CPPIB raised around US$750m via selling a 1.6% stake in Kotak Mahindra Bank (KMB IN). Prior to that it had sold a similar amount in...

Sumeet Singh

SoftBank Group (9984 JP): More Downside Risk to the NAV than Upside Potential

​SoftBank trades at a 44% discount to the NAV; it has downside risk due to high market valuations of Arm and the unlisted SVF holdings lack...

Victor Galliano

SoftBank trades at a 44% discount to the NAV; it has downside risk due to high market valuations of Arm and the unlisted SVF holdings lack...