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.

Equity Capital Markets

<a href="https://www.smartkarma.com/entities/pinduoduo-inc" target="_blank" data-smartkarma-citation="entities:27250:1" rel="noopener">Pinduoduo (PDD US)</a> plans to raise around US$5bn via a mix of issuing shares and convertible bonds.The stock has been a one-way street since listing and has risen by 27% since it announced its 3Q20 results on 12th Nov 2020. In this insight, we will run the deal through our ECM framework and talk about valuations.

Pinduoduo (PDD US) plans to raise around US$5bn via a mix of issuing shares and convertible bonds.The stock has been a one-way street since listing and has risen by 27% since it announced its 3Q20 results on 12th Nov 2020. In this insight, we will run the deal through our ECM framework and talk about valuations. 

Pinduoduo Placement - Should Do Well If, It Corrects Beforehand

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Thematic (Sector/Industry)

<ul>
<li>The effect of the COVID pandemic saw an unprecedented level of sector rotation among EM active portfolios in 2020.</li>
<li>Banking stocks were hit the hardest, with Semiconductor, Internet Retail and Interactive Media industry groups the beneficiaries.</li>
<li>Banking exposure is at its lowest levels in over a decade, EM active investors at highest ever weights in Tech related Consumer Discretionary and Communication Services stocks.</li>
<li>Improving outlook for banking stocks, vaccine hopes, plus potential regulation in the Tech sector point to a potential unwind.  </li>
<li>'Beaten Up' banking stocks include <a href="https://www.smartkarma.com/entities/itau-unibanco-holding-sa-9d47d196-e503-471b-a84e-ca4401033062" target="_blank" data-smartkarma-citation="entities:24550:1" rel="noopener">Itau Unibanco Holding Sa (ITUB4 BZ)</a> , <a href="https://www.smartkarma.com/entities/kasikornbank-pcl" target="_blank" data-smartkarma-citation="entities:293:1" rel="noopener">Kasikornbank PCL (KBANK TB)</a> and <a href="https://www.smartkarma.com/entities/standard-bank-group-ltd" target="_blank" data-smartkarma-citation="entities:24988:1" rel="noopener">Standard Bank (SBK SJ)</a> </li>
<li>Fully owned Tech related stocks include <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> , <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a> and <a href="https://www.smartkarma.com/entities/mercadolibre-inc" target="_blank" data-smartkarma-citation="entities:27954:1" rel="noopener">MercadoLibre Inc (MELI US)</a> </li>
</ul>


The effect of the COVID pandemic saw an unprecedented level of sector rotation among EM active portfolios in 2020.
Banking stocks were hit the hardest, with Semiconductor, Internet Retail and Interactive Media industry groups the beneficiaries.
Banking exposure is at its lowest levels in over a decade, EM active investors at highest ever weights in Tech related Consumer Discretionary and Communication Services stocks.
Improving outlook for banking stocks, vaccine hopes, plus potential regulation in the Tech sector point to a potential unwind.  
'Beaten Up' banking stocks include Itau Unibanco Holding Sa (ITUB4 BZ) , Kasikornbank PCL (KBANK TB) and Standard Bank (SBK SJ) 
Fully owned Tech related stocks include Meituan (3690 HK) , JD.com Inc (ADR) (JD US) and MercadoLibre Inc (MELI US) 


GEM Fund Positioning Update:  The COVID Unwind.

Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

*Another Positive Update Ahead of AGM: The Australia Securities &amp; Investments Commission (ASIC) recently released its second report on the Buy Now Pay Later (BNPL) space, and the findings appear to be similar to its first report. This is quite positive for the shares of Afterpay Touch (APT.AU) [Afterpay], where Tencent Holdings (700.HK) [Tencent] holds what is likely to be a growing 5% stake. The AGM for Afterpay is on November 17th; and  *More Magic Fairy Dust: Tencent continues to hit it out of the park with its Afterpay stake. In addition to a superb return on investment of 394% over the past five plus months since the stake announcement, this alliance with Australia’s premier financial technology BNPL company is paying dividends to Tencent in numerous other ways.

*Another Positive Update Ahead of AGM: The Australia Securities &amp; Investments Commission (ASIC) recently released its second report on the Buy Now Pay Later (BNPL) space, and the findings appear to be similar to its first report. This is quite positive for the shares of Afterpay Touch (APT.AU) [Afterpay], where Tencent Holdings (700.HK) [Tencent] holds what is likely to be a growing 5% stake. The AGM for Afterpay is on November 17th; and  *More Magic Fairy Dust: Tencent continues to hit it out of the park with its Afterpay stake. In addition to a superb return on investment of 394% over the past five plus months since the stake announcement, this alliance with Australia’s premier financial technology BNPL company is paying dividends to Tencent in numerous other ways. 

Tencent – This Deal Keeps Rolling Along

Yatsen Holding Ltd / Equity Capital Markets

Yatsen Holding aims to raise around upto US$617m in its US IPO. The company is backed by Hillhouse, Tencent and Tiger Global. Yatsen was founded in 2016 and has since then launched three color cosmetics and skincare brands. Together, these brands have served 23.4m customers in 2019. According to the CIC report, Perfect Diary became the top color cosmetics brand in China in terms of online retail sales in 2019.Its revenue increased by 4.7x in 2019 and was up 73% YoY over 9M20. The increase in revenue was driven by a 2.4x increase in its customer base in 2019 and another 50% YoY growth over 9M20. Yatsen operates a DTC model and does most of its marketing through its network of 15,000 KOLs. On the flip side, growth for its biggest brand slowed down considerably over 9M20. At the same time, its selling and marketing expenses have ballooned leading to the company again reporting losses over 9M20. There is also the case of its founders repeatedly selling shares to the company.In terms of valuation, the company hasn’t generated consistent profits, hence, one can only compare it on EV/Sales basis, on which measure it looks alright. However, the timing of future profitability remains uncertain given the turnaround in selling and marketing expenses in FY20, the continued offline expansion and the company’s growing penchant for acquisitions.Link to my previous note:<a href="https://www.smartkarma.com/insights/yatsen-pre-ipo-growing-fast-but-slowing-down" target="_blank" rel="noopener">Yatsen Pre-IPO - Growing Fast but Slowing Down</a>

Yatsen Holding aims to raise around upto US$617m in its US IPO. The company is backed by Hillhouse, Tencent and Tiger Global. Yatsen was founded in 2016 and has since then launched three color cosmetics and skincare brands. Together, these brands have served 23.4m customers in 2019. According to the CIC report, Perfect Diary became the top color cosmetics brand in China in terms of online retail sales in 2019.Its revenue increased by 4.7x in 2019 and was up 73% YoY over 9M20. The increase in revenue was driven by a 2.4x increase in its customer base in 2019 and another 50% YoY growth over 9M20. Yatsen operates a DTC model and does most of its marketing through its network of 15,000 KOLs. On the flip side, growth for its biggest brand slowed down considerably over 9M20. At the same time, its selling and marketing expenses have ballooned leading to the company again reporting losses over 9M20. There is also the case of its founders repeatedly selling shares to the company.In terms of valuation, the company hasn’t generated consistent profits, hence, one can only compare it on EV/Sales basis, on which measure it looks alright. However, the timing of future profitability remains uncertain given the turnaround in selling and marketing expenses in FY20, the continued offline expansion and the company’s growing penchant for acquisitions.Link to my previous note:Yatsen Pre-IPO - Growing Fast but Slowing Down

Yatsen IPO - Pricey but It Comes with Strong Investor Backing

Founder

Kemp Dolliver, CFA

Cherrystone Hill Research

JD Health International  / Equity Capital Markets

The development of a leading online healthcare services business not only is a critical component of JD Health’s strategy, but also a key support to the rumored listing valuation of US$20 billion. In contrast with the retail pharmacy business, the company's online healthcare services segment is in its infancy. In fact, the industry has yet to generate profits. This Insight takes a ground-level view of the online healthcare services sector using academic research and competitors' data to provide tools to evaluate JD Health's and its peers' execution.

The development of a leading online healthcare services business not only is a critical component of JD Health’s strategy, but also a key support to the rumored listing valuation of US$20 billion. In contrast with the retail pharmacy business, the company's online healthcare services segment is in its infancy. In fact, the industry has yet to generate profits. This Insight takes a ground-level view of the online healthcare services sector using academic research and competitors' data to provide tools to evaluate JD Health's and its peers' execution.

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)

Pinduoduo Placement - Should Do Well If, It Corrects Beforehand

Pinduoduo (PDD US) plans to raise around US$5bn via a mix of issuing shares and convertible bonds. The stock has been a one-way street since listing.

Sumeet Singh

GEM Fund Positioning Update: The COVID Unwind.

How did Emerging Market managers react to the COVID-19 pandemic? Unprecedented rotation out of Bank stocks and in to Tech. How are managers now...

Steven Holden

Tencent – This Deal Keeps Rolling Along

TENCENT HOLDINGS: ASICs Second Report On The Buy Now Pay Later Space Is Yet Another Positive For Tencent's Afterpay Investment.

Thomas J. Monaco

Yatsen IPO - Pricey but It Comes with Strong Investor Backing

Yatsen Holding aims to raise around upto US$617m in its US IPO. The company is backed by Hillhouse, Tencent and Tiger Global.

Sumeet Singh

JD Health: Examining the Infant

This Insight offers a ground-level view of the nascent online healthcare services sector using academic research and other sources to evaluate the...

Kemp Dolliver, CFA

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