IPO and L/S equity, 2015 Starmine top stock picker, Global Equity Research Ltd

Rickin Thakrar

IPO and L/S equity, 2015 Starmine top stock picker

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

<p><a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a> has reportedly hired investment banks in order to raise 3.5bn USD in a secondary listing with the expectation that the deal will commence in 1H21. We look at the fundamental investment case and key recent events for Baidu below.</p>

Baidu (BIDU US) has reportedly hired investment banks in order to raise 3.5bn USD in a secondary listing with the expectation that the deal will commence in 1H21. We look at the fundamental investment case and key recent events for Baidu below.

Baidu Secondary Listing: Do the Fundamentals Stack Up?

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.

Kuaishou Technology / Equity Capital Markets

<div><p>Kuaishou Technology (KT) is a content community and social platform that is looking to raise around US$5bn in its Hong Kong IPO. The company is backed by Tencent, Sequoia China, Baidu, DST Global, Boyu Capital, Temasek and others.</p></div><div><p>As of nine months ended Sep 2020, it had 305m daily active users (DAUs), who spent 86 mins on average on the app every day. It also had 769m monthly active users (MAUs) and total e-commerce GMV of RMB204.1bn. On an average 1.1bn short videos were uploaded on its app during 1H20.</p></div><div><p>As per iResearch, Kuaishou was globally the largest live streaming platform by gross billings from virtual gifting and average live streaming MPUs, the second largest short video platform by average DAUs, and the second largest live streaming e-commerce platform by GMV, over six months ended June 30, 2020.</p></div><div><p>I have covered various aspects of the company’s performance in my previous notes: </p></div><div><ul style="list-style-type: disc;">
<li> <a href="https://www.smartkarma.com/insights/kuaishou-technology-pre-ipo-the-positives-hot-segment-fast-growth" target="_blank" rel="noopener">Kuaishou Technology Pre-IPO - The Positives - Hot Segment, fast growth</a>
</li>
<li><a href="https://www.smartkarma.com/insights/kuaishou-technology-pre-ipo-the-negatives-ample-doubts-remain" target="_blank" rel="noopener">Kuaishou Technology Pre-IPO - The Negatives - Ample Doubts Remain</a></li>
<li><a href="https://www.smartkarma.com/insights/kuaishou-technology-pre-ipo-peer-comparison-and-thoughts-on-valuation" target="_blank" rel="noopener">Kuaishou Technology Pre-IPO - Peer Comparison and Thoughts on Valuation</a></li>
<li><a href="https://www.smartkarma.com/insights/kuaishou-technology-pre-ipo-phip-updates-user-growth-has-been-slowing-down-post-covid" target="_blank" rel="noopener">Kuaishou Technology Pre-IPO - PHIP Updates - User Growth Has Been Slowing Down Post COVID</a></li>
</ul></div><div><p>In this note, I’ll cover the updated earnings and forecast post the PHIP filing.</p></div>

Kuaishou Technology (KT) is a content community and social platform that is looking to raise around US$5bn in its Hong Kong IPO. The company is backed by Tencent, Sequoia China, Baidu, DST Global, Boyu Capital, Temasek and others.As of nine months ended Sep 2020, it had 305m daily active users (DAUs), who spent 86 mins on average on the app every day. It also had 769m monthly active users (MAUs) and total e-commerce GMV of RMB204.1bn. On an average 1.1bn short videos were uploaded on its app during 1H20.As per iResearch, Kuaishou was globally the largest live streaming platform by gross billings from virtual gifting and average live streaming MPUs, the second largest short video platform by average DAUs, and the second largest live streaming e-commerce platform by GMV, over six months ended June 30, 2020.I have covered various aspects of the company’s performance in my previous notes: 
 Kuaishou Technology Pre-IPO - The Positives - Hot Segment, fast growth

Kuaishou Technology Pre-IPO - The Negatives - Ample Doubts Remain
Kuaishou Technology Pre-IPO - Peer Comparison and Thoughts on Valuation
Kuaishou Technology Pre-IPO - PHIP Updates - User Growth Has Been Slowing Down Post COVID
In this note, I’ll cover the updated earnings and forecast post the PHIP filing.

Kuaishou Technology Pre-IPO - Updated Forecasts and Valuation

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

<div>
<p><a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Beijing Kuaishou Technology Co Ltd (1496219D CH)</a> is the second-largest short video platform by average DAUs (daily active users) in 9M20, according to iResearch. Kuaishou has started pre-marketing for Hong Kong IPO to raise up to $5-6 billion. Kuaishou which was previously seeking a $50 billion valuation is now being valued by the syndicate at $65-91 billion, according to <a href="http://www.aastocks.com/en/stocks/news/aafn-con/NOW.1070003/ipo-news" target="_blank" rel="noopener">Chinese media reports</a>. Potential IPO investors seem to be more sanguine and according to these same reports are said to be a seeking a $60-70 billion valuation. </p>
<p>In <a href="https://www.smartkarma.com/insights/kuaishou-ipo-initiation-dancing-to-its-own-tune" target="_blank" data-smartkarma-citation="insights:45032" rel="noopener">Kuaishou IPO Initiation: Dancing to Its Own Tune</a>, we stated that while Kuaishou’s performance over the track record period is distorted due to various factors, we believe that the underlying fundamentals are attractive. In <a href="https://www.smartkarma.com/insights/kuaishou-ipo-thrill-seekers" target="_blank" data-smartkarma-citation="insights:47104" rel="noopener">Kuaishou IPO: Thrill Seekers</a>,  we noted that the PHIP which discloses 9M20 results and key operating data for 11M20 reinforces our view that Kuaishou is worth a look. </p>
<div class="content-highlight"><p>In this note, we update our forecasts and valuation presented in <a href="https://www.smartkarma.com/insights/kuaishou-ipo-valuation-first-look" target="_blank" data-smartkarma-citation="insights:46787" rel="noopener">Kuaishou IPO: Valuation First Look </a>for the latest set of results. Overall, based on valuation analysis, we think that a $65 billion valuation is justifiable (the low-end of the rumoured syndicate range) but would be hesitant to participate at a higher valuation.</p></div>
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Beijing Kuaishou Technology Co Ltd (1496219D CH) is the second-largest short video platform by average DAUs (daily active users) in 9M20, according to iResearch. Kuaishou has started pre-marketing for Hong Kong IPO to raise up to $5-6 billion. Kuaishou which was previously seeking a $50 billion valuation is now being valued by the syndicate at $65-91 billion, according to Chinese media reports. Potential IPO investors seem to be more sanguine and according to these same reports are said to be a seeking a $60-70 billion valuation. 
In Kuaishou IPO Initiation: Dancing to Its Own Tune, we stated that while Kuaishou’s performance over the track record period is distorted due to various factors, we believe that the underlying fundamentals are attractive. In Kuaishou IPO: Thrill Seekers,  we noted that the PHIP which discloses 9M20 results and key operating data for 11M20 reinforces our view that Kuaishou is worth a look. 
In this note, we update our forecasts and valuation presented in Kuaishou IPO: Valuation First Look for the latest set of results. Overall, based on valuation analysis, we think that a $65 billion valuation is justifiable (the low-end of the rumoured syndicate range) but would be hesitant to participate at a higher valuation.


Kuaishou IPO: Valuation and Forecast Update

Indian Railway Finance Corporation / Equity Capital Markets

<p>Indian Railway Finance Corporation (IRFC) aims to raise around US$630m via selling new and existing shares in its Indian IPO.</p><p>IRFC is the dedicated financing arm of the Indian Railways for mobilizing funds from domestic as well as overseas capital markets. Its primary business is financing the acquisition of rolling stock assets and project assets of the Indian railways and lending to other entities under the Ministry of Railways.</p><p>IRFC’s AUM has grown by 25-32% over FY18-FY20, while disbursements have been growing at 34-43%. Although revenue growth has lagged AUM growth since at least FY18 as its net interest margin had been under pressure due to the rising cost of funds and fluctuation margin set by the Ministry of Railways. </p><p>We have covered the above and other points in our previous note: </p><ul><li dir="ltr"><p><a href="https://www.smartkarma.com/insights/indian-railway-finance-pre-ipo-low-risk-low-margin-business" target="_blank" rel="noopener">Indian Railway Finance Pre-IPO - Low risk, low margin business</a></p></li></ul><p>In this note, we'll talk about updates for the newly filed DRHP and run the deal through our ECM framework</p>

Indian Railway Finance Corporation (IRFC) aims to raise around US$630m via selling new and existing shares in its Indian IPO.IRFC is the dedicated financing arm of the Indian Railways for mobilizing funds from domestic as well as overseas capital markets. Its primary business is financing the acquisition of rolling stock assets and project assets of the Indian railways and lending to other entities under the Ministry of Railways.IRFC’s AUM has grown by 25-32% over FY18-FY20, while disbursements have been growing at 34-43%. Although revenue growth has lagged AUM growth since at least FY18 as its net interest margin had been under pressure due to the rising cost of funds and fluctuation margin set by the Ministry of Railways. We have covered the above and other points in our previous note: Indian Railway Finance Pre-IPO - Low risk, low margin businessIn this note, we'll talk about updates for the newly filed DRHP and run the deal through our ECM framework

Indian Railway Finance IPO - Low Risk, Low Margin, Low Returns

<div><p>Kuaishou Technology (KT) is a content community and social platform that is looking to raise around US$5bn in its Hong Kong IPO. The company is backed by Tencent, Sequoia China, Baidu, DST Global, Boyu Capital, Temasek and others.</p></div><div><p>As of six months ended Jun 2020, it had 302m daily active users (DAUs), who spent 85 mins on average on the app every day. It also had 776m monthly active users (MAUs) and total e-commerce GMV of RMB109.6bn. On an average 1.1bn short videos were uploaded on its app during 1H20.</p></div><div><p>As per iResearch, Kuaishou was globally the largest live streaming platform by gross billings from virtual gifting and average live streaming MPUs, the second largest short video platform by average DAUs, and the second largest live streaming e-commerce platform by GMV, over six months ended June 30, 2020.</p></div><div><p>I have covered various aspects of the company’s performance in my previous notes: </p></div><div><ul style="list-style-type: disc;">
<li> <a href="https://www.smartkarma.com/insights/kuaishou-technology-pre-ipo-the-positives-hot-segment-fast-growth" target="_blank" rel="noopener">Kuaishou Technology Pre-IPO - The Positives - Hot Segment, fast growth</a>
</li>
<li><a href="https://www.smartkarma.com/insights/kuaishou-technology-pre-ipo-the-negatives-ample-doubts-remain" target="_blank" rel="noopener">Kuaishou Technology Pre-IPO - The Negatives - Ample Doubts Remain</a></li>
<li><a href="https://www.smartkarma.com/insights/kuaishou-technology-pre-ipo-peer-comparison-and-thoughts-on-valuation" target="_blank" rel="noopener">Kuaishou Technology Pre-IPO - Peer Comparison and Thoughts on Valuation</a></li>
</ul></div><div><p>In this note, I’ll cover the updates from its recently filed PHIP.</p></div>

Kuaishou Technology (KT) is a content community and social platform that is looking to raise around US$5bn in its Hong Kong IPO. The company is backed by Tencent, Sequoia China, Baidu, DST Global, Boyu Capital, Temasek and others.As of six months ended Jun 2020, it had 302m daily active users (DAUs), who spent 85 mins on average on the app every day. It also had 776m monthly active users (MAUs) and total e-commerce GMV of RMB109.6bn. On an average 1.1bn short videos were uploaded on its app during 1H20.As per iResearch, Kuaishou was globally the largest live streaming platform by gross billings from virtual gifting and average live streaming MPUs, the second largest short video platform by average DAUs, and the second largest live streaming e-commerce platform by GMV, over six months ended June 30, 2020.I have covered various aspects of the company’s performance in my previous notes: 
 Kuaishou Technology Pre-IPO - The Positives - Hot Segment, fast growth

Kuaishou Technology Pre-IPO - The Negatives - Ample Doubts Remain
Kuaishou Technology Pre-IPO - Peer Comparison and Thoughts on Valuation
In this note, I’ll cover the updates from its recently filed PHIP.

Kuaishou Technology Pre-IPO - PHIP Updates - User Growth Has Been Slowing Down Post COVID

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent Holdings (ADR) (TCEHY US)

Baidu Secondary Listing: Do the Fundamentals Stack Up?

Baidu (BIDU US) has reportedly hired investment banks in order to raise 3.5bn USD in a secondary listing with the expectation that the deal will...

Rickin Thakrar

Kuaishou Technology Pre-IPO - Updated Forecasts and Valuation

Kuaishou Technology is a content community and social platform that is looking to raise around US$5bn in its Hong Kong IPO. The company is backed...

Sumeet Singh

Kuaishou IPO: Valuation and Forecast Update

Kuaishou is being valued by the syndicate at $65-91 bn, according to Chinese media reports. We think that a $65 bn valuation is justifiable but...

Arun George

Indian Railway Finance IPO - Low Risk, Low Margin, Low Returns

Indian Railway Finance Corporation (IRFC) aims to raise around US$630m via its Indian IPO. IRFC is the dedicated financing arm of the Indian...

Sumeet Singh

Kuaishou Technology Pre-IPO - PHIP Updates - User Growth Has Been Slowing Down Post COVID

Kuaishou Technology (KT) is a content community and social platform that is looking to raise around US$5bn in its Hong Kong IPO. The company is...

Sumeet Singh

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