Research Analyst, AlphaBox Advisors

Vijay Lohia, CFA

Research Analyst

Value-Investing Philosophy and Bottom-up Approach

AlphaBox Advisors

At AlphaBox, our recommendations are sector and country agnostic and diversified by market cap. We follow value-investing philosophy and pursue a bottom-up approach to recommending stocks that has a good risk-reward profile and potential to generate market-beating returns, which in some cases would be complemented with an attractive dividend yield. Our recommendations fall into the following two broad categories: (i) Long-term Compounders – Global Markets (ii) EM and FM Alpha

Event-Driven

<ul>
<li>Overall, the sentiments are extremely negative with most sell-side analysts having a Sell/Neutral rating on the stock.</li>
<li>We believe either A) Revenue and earnings growth will pick up under the new management team, or B) Temenos will be taken over by some private equity firm.</li>
<li>While revenue growth has remained subdued, the company’s moat remains intact in our view.</li>
</ul>


Overall, the sentiments are extremely negative with most sell-side analysts having a Sell/Neutral rating on the stock.
We believe either A) Revenue and earnings growth will pick up under the new management team, or B) Temenos will be taken over by some private equity firm.
While revenue growth has remained subdued, the company’s moat remains intact in our view.


Temenos (TEMN SW): World's No.1; Improving Fundamentals; M&A Candidate

<ul>
<li>Temenos is an attractive takeover candidate with multiple M&amp;A  speculation in the media in the last 12-18 months. </li>
<li>The probability of Temenos being taken over continues to increase especially after the fresh round of banking industry turmoil witnessed in the last few weeks.</li>
<li>At a buy-out multiple of 10x EV/sales, Temenos would be worth CHF110 per share which is roughly 72% upside from here.</li>
</ul>


Temenos is an attractive takeover candidate with multiple M&amp;A  speculation in the media in the last 12-18 months. 
The probability of Temenos being taken over continues to increase especially after the fresh round of banking industry turmoil witnessed in the last few weeks.
At a buy-out multiple of 10x EV/sales, Temenos would be worth CHF110 per share which is roughly 72% upside from here.


Temenos (TEMN SW; TMSNY US): M&A Looks Imminent

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, 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

The Chinese financial technology company <a href="https://www.smartkarma.com/entities/bairong" target="_blank" data-smartkarma-citation="entities:31486:1" rel="noopener">Bairong (1569395D CH)</a>  has set the terms for its IPO. Bairong plans to issue 123.8m shares at an indicative IPO price range of HK$26.5-31.8 per share and will raise approx. HK$3.4bn (US$447.2m) at the midpoint of the IPO price range of HK$29.15 per share.<table class="table table-striped"><tbody>
<tr><td colspan="2" style="width: 100.0pt;">Bairong IPO Details</td></tr>
<tr>
<td style="width: 50.0pt;">No. of Shares Issued</td>
<td style="width: 50.0pt;">                      123,822,500</td>
</tr>
<tr>
<td style="width: 50.0pt;">IPO Price per Share (HK$)</td>
<td style="width: 50.0pt;">26.5-31.8</td>
</tr>
<tr>
<td style="width: 50.0pt;">Offer as a % of Outstanding Shares</td>
<td style="width: 50.0pt;">25.00%</td>
</tr>
<tr>
<td style="width: 50.0pt;">Total Shares Outstanding</td>
<td style="width: 50.0pt;">495,289,330</td>
</tr>
<tr>
<td style="width: 50.0pt;">Net Proceeds (HK$m)</td>
<td style="width: 50.0pt;">3,440.70</td>
</tr>
<tr>
<td style="width: 50.0pt;">Market Capitalisation (HK$m)</td>
<td style="width: 50.0pt;">14,437.68</td>
</tr>
<tr>
<td style="width: 50.0pt;">Enterprise Value (HK$m)</td>
<td style="width: 50.0pt;">10,807.23</td>
</tr>
</tbody></table>Source: Company disclosures, LSR (net proceeds, market capitalisation and EV are at the midpoint of the IPO price range, EV is adjusted for net IPO proceeds and net cash)Bairong plans to spend approx. 45% of the net IPO proceeds over the next three years on funding business expansion, particularly the company’s FSP (Financial Service Provider) client base while also penetrating the existing FSP client base. The company also plans to use 30% of the net proceeds on R&amp;D over the next three years to develop and improve its technology infrastructure such as AI algorithm and automatic real-time analysis.The company also has entered into cornerstone investment agreements with Cederberg, China Structural Reform Fund and Franchise Fund who have agreed to purchase approx. US$220m (HK$1.7m) worth of shares offered at the IPO.

The Chinese financial technology company Bairong (1569395D CH)  has set the terms for its IPO. Bairong plans to issue 123.8m shares at an indicative IPO price range of HK$26.5-31.8 per share and will raise approx. HK$3.4bn (US$447.2m) at the midpoint of the IPO price range of HK$29.15 per share.
Bairong IPO Details

No. of Shares Issued
                      123,822,500


IPO Price per Share (HK$)
26.5-31.8


Offer as a % of Outstanding Shares
25.00%


Total Shares Outstanding
495,289,330


Net Proceeds (HK$m)
3,440.70


Market Capitalisation (HK$m)
14,437.68


Enterprise Value (HK$m)
10,807.23

Source: Company disclosures, LSR (net proceeds, market capitalisation and EV are at the midpoint of the IPO price range, EV is adjusted for net IPO proceeds and net cash)Bairong plans to spend approx. 45% of the net IPO proceeds over the next three years on funding business expansion, particularly the company’s FSP (Financial Service Provider) client base while also penetrating the existing FSP client base. The company also plans to use 30% of the net proceeds on R&amp;D over the next three years to develop and improve its technology infrastructure such as AI algorithm and automatic real-time analysis.The company also has entered into cornerstone investment agreements with Cederberg, China Structural Reform Fund and Franchise Fund who have agreed to purchase approx. US$220m (HK$1.7m) worth of shares offered at the IPO.

Bairong IPO Valuation: Appealing Valuation

Switzerland

Temenos AG provides integrated software solutions. The Company offers analytics, channels, financial crime mitigation, funds and securities, risk and compliance, and front office and digital banking suits for the management of administrative tasks at banks and financial services companies. Temenos operates worldwide.

Temenos (TMSNY US)

Temenos (TEMN SW): World's No.1; Improving Fundamentals; M&A Candidate

World's No.1 Banking Software giant available at attractive valuations. With recent management changes, either earnings growth will pick up, or it...

Vijay Lohia, CFA

Temenos (TEMN SW; TMSNY US): M&A Looks Imminent

The probability of Temenos being taken over continues to increase especially after the fresh round of banking industry turmoil witnessed in the...

Vijay Lohia, CFA

Bairong IPO Valuation: Appealing Valuation

We believe Bairong’s IPO is attractively priced given strong key FSP client base, ability to generate higher revenue per key FSP Client and better...

Shifara Samsudeen, ACMA, CGMA