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

<div>
<p><a href="https://www.smartkarma.com/entities/freee-kk" target="_blank" data-smartkarma-citation="entities:28424:1" rel="noopener">Freee (4478 JP)</a> (freee) is looking to raise around US$400m via selling a mix of primary and secondary shares. </p>
<p>We had looked at the company at the time of listing, links to our previous notes are below: </p>
</div><div><ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/freee-pre-ipo-has-been-growing-fast-but-missing-data-points-leave-quite-a-few-niggling-doubts" target="_blank" rel="noopener">freee K.K. pre-IPO - Has been growing fast but missing data points leave quite a few niggling doubts,</a></li>
<li><a href="https://www.smartkarma.com/insights/freee-k-k-pre-ipo-the-battle-is-far-from-over" target="_blank" rel="noopener">Freee K. K. Pre-IPO - The Battle Is Far from Over,</a></li>
<li>
<a href="https://www.smartkarma.com/insights/free-k-k-ipo-it-s-not-exactly-freee-but-looks-ok-at-the-lower-end" target="_blank" rel="noopener">Freee K.K. IPO - It’s Not Exactly Free but Looks Ok at the Lower-End</a>, and</li>
<li><a href="https://www.smartkarma.com/insights/freee-ipo-trading-priced-at-par-to-comp-it-now-boils-down-to-how-much-premium-it-can-trade-at" target="_blank" rel="noopener">Freee IPO Trading - Priced at Par to Comp, It Now Boils Down to How Much Premium It Can Trade At</a></li>
</ul></div><div><p>In this note, we'll run the deal through our ECM framework and talk about deal dynamics.</p></div>


Freee (4478 JP) (freee) is looking to raise around US$400m via selling a mix of primary and secondary shares. 
We had looked at the company at the time of listing, links to our previous notes are below: 

freee K.K. pre-IPO - Has been growing fast but missing data points leave quite a few niggling doubts,
Freee K. K. Pre-IPO - The Battle Is Far from Over,

Freee K.K. IPO - It’s Not Exactly Free but Looks Ok at the Lower-End, and
Freee IPO Trading - Priced at Par to Comp, It Now Boils Down to How Much Premium It Can Trade At
In this note, we'll run the deal through our ECM framework and talk about deal dynamics.

Freee Placement - Needs to Correct by a Whole Lot More

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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.

Event-Driven

<p>With Effissimo winning an important victory for shareholder governance at Toshiba’s EGM and helping to sustain the momentum for corporate governance in Japan, we take a look over the pond to examine what is happening in Whitebox Advisors’ opposition to LG’s proposed spin-off.</p>

With Effissimo winning an important victory for shareholder governance at Toshiba’s EGM and helping to sustain the momentum for corporate governance in Japan, we take a look over the pond to examine what is happening in Whitebox Advisors’ opposition to LG’s proposed spin-off.

LG Corp – The Whitebox Case in Light of Activist Victory at Toshiba

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<div><p>The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.</p></div><div><p>Hong Kong saw shorts rise on <a href="https://www.smartkarma.com/entities/xinyi-solar-holdings-ltd" target="_blank" data-smartkarma-citation="entities:318:1" rel="noopener">Xinyi Solar Holdings (968 HK)</a>, <a href="https://www.smartkarma.com/entities/lenovo-group-ltd" target="_blank" data-smartkarma-citation="entities:13359:1" rel="noopener">Lenovo (992 HK)</a>, <a href="https://www.smartkarma.com/entities/ping-an-insurance-grp-co-of-china-ltd" target="_blank" data-smartkarma-citation="entities:12880:1" rel="noopener">Ping An Insurance (H) (2318 HK)</a>, <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a> and <a href="https://www.smartkarma.com/entities/jd-health-international-inc" target="_blank" data-smartkarma-citation="entities:29677:1" rel="noopener">JD Health (6618 HK)</a> while there was short covering on <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a>, <a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home Co Ltd (6690 HK)</a>, <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec Co. Ltd. (2359 HK)</a> and <a href="https://www.smartkarma.com/entities/aia-group-ltd" target="_blank" data-smartkarma-citation="entities:14895:1" rel="noopener">AIA Group Ltd (1299 HK)</a>. Shorts increased in Communication Services, Information Technology and Materials stocks, while decreasing in Utilities, Consumer Staples, Energy, Consumer Discretionary and Health Care stocks.</p></div><div><p>In Japan, stocks that saw the most shorts were <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a>, <a href="https://www.smartkarma.com/entities/toshiba-corp" target="_blank" data-smartkarma-citation="entities:637:1" rel="noopener">Toshiba Corp (6502 JP)</a>, <a href="https://www.smartkarma.com/entities/monex-group-inc" target="_blank" data-smartkarma-citation="entities:14211:1" rel="noopener">Monex Group Inc (8698 JP)</a> and <a href="https://www.smartkarma.com/entities/nihon-m-a-center-inc" target="_blank" data-smartkarma-citation="entities:17616:1" rel="noopener">Nihon M&amp;A Center (2127 JP)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/rakuten-inc" target="_blank" data-smartkarma-citation="entities:31:1" rel="noopener">Rakuten Inc (4755 JP)</a>, <a href="https://www.smartkarma.com/entities/fast-retailing-co-ltd" target="_blank" data-smartkarma-citation="entities:751:1" rel="noopener">Fast Retailing (9983 JP)</a>, <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a> and <a href="https://www.smartkarma.com/entities/rohm-co-ltd" target="_blank" data-smartkarma-citation="entities:2953:1" rel="noopener">ROHM Co Ltd (6963 JP)</a>. Shorts increased in Consumer Staples, Industrials, Financials and Materials, while shorts covered in the Consumer Discretionary sector.</p></div><div><p>In Korea, short increased on <a href="https://www.smartkarma.com/entities/doosan-infracore-co-ltd" target="_blank" data-smartkarma-citation="entities:3982:1" rel="noopener">Doosan Infracore (042670 KS)</a>, <a href="https://www.smartkarma.com/entities/lotte-chemical-corp" target="_blank" data-smartkarma-citation="entities:8757:1" rel="noopener">Lotte Chemical (011170 KS)</a>, <a href="https://www.smartkarma.com/entities/posco-chemical-co-ltd" target="_blank" data-smartkarma-citation="entities:12421:1" rel="noopener">Posco Chemical Co Ltd (003670 KS)</a> and <a href="https://www.smartkarma.com/entities/hyundai-motor-co" target="_blank" data-smartkarma-citation="entities:155:1" rel="noopener">Hyundai Motor Co (005380 KS)</a> while shorts decreased on <a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a>, <a href="https://www.smartkarma.com/entities/celltrion-inc" target="_blank" data-smartkarma-citation="entities:991:1" rel="noopener">Celltrion Inc (068270 KS)</a>, <a href="https://www.smartkarma.com/entities/korea-electric-power-corp" target="_blank" data-smartkarma-citation="entities:16:1" rel="noopener">Korea Electric Power (015760 KS)</a> and <a href="https://www.smartkarma.com/entities/lg-display-co-ltd" target="_blank" data-smartkarma-citation="entities:7145:1" rel="noopener">LG Display (034220 KS)</a>. </p></div><div><p>Stocks in Taiwan that saw the highest increase in shorts were <a href="https://www.smartkarma.com/entities/taiwan-semiconductor-manufacturing-company" target="_blank" data-smartkarma-citation="entities:11230:1" rel="noopener">TSMC (2330 TT)</a>, <a href="https://www.smartkarma.com/entities/pegatron-corp" target="_blank" data-smartkarma-citation="entities:12852:1" rel="noopener">Pegatron Corp (4938 TT)</a>, <a href="https://www.smartkarma.com/entities/fitipower-integrated-tech" target="_blank" data-smartkarma-citation="entities:8712:1" rel="noopener">Fitipower Integrated Tech (4961 TT)</a> and <a href="https://www.smartkarma.com/entities/walsin-technology-corp" target="_blank" data-smartkarma-citation="entities:11084:1" rel="noopener">Walsin Technology (2492 TT)</a> while shorts were covered on <a href="https://www.smartkarma.com/entities/taiwan-cement" target="_blank" data-smartkarma-citation="entities:19736:1" rel="noopener">Taiwan Cement (1101 TT)</a>, <a href="https://www.smartkarma.com/entities/evergreen-marine-corp-ltd" target="_blank" data-smartkarma-citation="entities:15428:1" rel="noopener">Evergreen Marine Corp (2603 TT)</a>, <a href="https://www.smartkarma.com/entities/innolux-corp" target="_blank" data-smartkarma-citation="entities:4509:1" rel="noopener">Innolux Corp (3481 TT)</a> and <a href="https://www.smartkarma.com/entities/richwave-technology-corp" target="_blank" data-smartkarma-citation="entities:18629:1" rel="noopener">Richwave Technology (4968 TT)</a>.</p></div>

The Asia Short Interest weekly looks at moves in market wide short interest and highlights movements in stock specific short interest across Hong Kong, Japan, Korea and Taiwan using the last available data published by the relevant authorities.Hong Kong saw shorts rise on Xinyi Solar Holdings (968 HK), Lenovo (992 HK), Ping An Insurance (H) (2318 HK), Kuaishou Technology (1024 HK) and JD Health (6618 HK) while there was short covering on Alibaba Group (9988 HK), Xiaomi Corp (1810 HK), Haier Smart Home Co Ltd (6690 HK), WuXi AppTec Co. Ltd. (2359 HK) and AIA Group Ltd (1299 HK). Shorts increased in Communication Services, Information Technology and Materials stocks, while decreasing in Utilities, Consumer Staples, Energy, Consumer Discretionary and Health Care stocks.In Japan, stocks that saw the most shorts were Seven &amp; I Holdings (3382 JP), Toshiba Corp (6502 JP), Monex Group Inc (8698 JP) and Nihon M&amp;A Center (2127 JP) while shorts decreased on Rakuten Inc (4755 JP), Fast Retailing (9983 JP), Itochu Corp (8001 JP) and ROHM Co Ltd (6963 JP). Shorts increased in Consumer Staples, Industrials, Financials and Materials, while shorts covered in the Consumer Discretionary sector.In Korea, short increased on Doosan Infracore (042670 KS), Lotte Chemical (011170 KS), Posco Chemical Co Ltd (003670 KS) and Hyundai Motor Co (005380 KS) while shorts decreased on SK Hynix (000660 KS), Celltrion Inc (068270 KS), Korea Electric Power (015760 KS) and LG Display (034220 KS). Stocks in Taiwan that saw the highest increase in shorts were TSMC (2330 TT), Pegatron Corp (4938 TT), Fitipower Integrated Tech (4961 TT) and Walsin Technology (2492 TT) while shorts were covered on Taiwan Cement (1101 TT), Evergreen Marine Corp (2603 TT), Innolux Corp (3481 TT) and Richwave Technology (4968 TT).

Asia Short Interest: Kuaishou, JD Health, Xiaomi, 7&I, Monex, Rakuten, Hynix, Hyundai, Fitipower

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<p>Whether it be global rate markets expecting more inflation, inflation becoming visible, or US stimulus payments and China's not unimpressive economic results last year, or even a rebounding dollar/yen rate and better-than-expected Japanese corporate earnings, the BOJ has decided now that it can step mostly back. </p><p>The Nikkei newspaper <a href="https://asia.nikkei.com/Economy/BOJ-to-widen-interest-rate-target-range-to-support-bank-profits" target="_blank" rel="noopener">reported</a> at noon Japan time today that the Bank of Japan would increase the range of fluctuation permitted around its long-term interest rate guidance policy to 0.25% plus or minus vs the current center rate of 0.20%. </p><div class="content-highlight">
<p>The bigger news in terms of markets is likely to be the news about ETFs. The BOJ has had a "Target ETF Purchasing Rate" of ¥6 trillion/year for the past few years though actual purchasing has fluctuated up and down with demand (and famously briefly popped last March in the covid-crash).</p>
<p>The new guidance, according to the Nikkei, will be that the ¥6 trillion/year target will be abolished and the BOJ will only step in when markets get turbulent. </p>
</div><div>
<p>The subject of the BOJ stopping to buy ETFs has been a repeated question of interest in Parliament when Mr Kuroda makes an appearance, and any number of People With Important Thoughts have opined on the issue, saying the BOJ should stop buying stocks.</p>
<p>When Mr Kuroda was in front of parliament four months ago in mid-November, answering questions about when the BOJ would stop and what it would do to stop buying, he was quite clear with his answer. From a Reuters <a href="https://www.reuters.com/article/japan-economy-kuroda-etf-idUST9N2GT02I" target="_blank" rel="noopener">note</a> ...</p>
</div><div><blockquote>
<p>The BOJ already buys ETFs “quite flexibly” and can reduce purchases when the market risk premium is not rising, Kuroda told parliament.</p>
<p>“If inflation hits our 2% target and an exit from our massive stimulus programme comes into sight, there will certainly be debate on how to end our ETF buying. But it’s premature to do so at this stage.”</p>
</blockquote></div><div>
<p>Kazuo Momma, who used to be assistant governor at the BOJ and is now an economist at the Mizuho Research Institute had recently criticized the entire program, saying it is not something central banks should be doing. </p>
<blockquote>
<p>"The BOJ's ETF buying started out as an emergency step. It's not something central banks should be doing in the first place," he told <a href="https://www.marketscreener.com/quote/currency/EURO-JAPANESE-YEN-EUR-4592/news/Ideas-emerge-for-alternative-ways-to-unload-Bank-of-Japan-s-huge-ETF-holdings-31827846/" target="_blank" rel="noopener">Reuters</a> [in response to the Kuroda Diet sessions].</p>
<p>"At the very least, the BOJ should stop buying ETFs except for when market sentiment sours enough to inflict severe damage to the economy."</p>
</blockquote>
<p>After its December meeting, the BOJ said it would be conducting a policy review and the official review is expected tomorrow after the MPC decisions.</p>
<p>The Nikkei has jumped the gun. One assumes they do so with a fair bit of insider knowledge. But this policy looks like it came from Kazuo Momma.</p>
<p>But this should not come as that much of a surprise. </p>
<p>The chart below can be separated into three sections. The thick red line stepping up is the official policy purchase rate line and the blue lines around it are actual BOJ purchases. The red and yellow dots (with the thin red line average) are the AM session down performance on days when the BOJ does NOT buy, showing that on average, the BOJ is letting larger falls go by without stepping in, and the green line is TOPIX.</p>
<section class="figure"><section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/195/215/original/Screenshot+2021-03-18+at+1.31.06+PM.png?1616045488" class="editor-image img-responsive" data-smartkarma-image-id="195215"></figure></section><p>This tells you the BOJ has been less present than for a long time, and has stepped back. The BOJ has been virtually tapering for months. The fact that they stepped in early and in size last March tells you what they will do if things get turbulent.</p></section><p>The question now is what does that change. </p>
<p>That and understanding the impact of the cessation of buying on different stocks below the fold. </p>
</div>

Whether it be global rate markets expecting more inflation, inflation becoming visible, or US stimulus payments and China's not unimpressive economic results last year, or even a rebounding dollar/yen rate and better-than-expected Japanese corporate earnings, the BOJ has decided now that it can step mostly back. The Nikkei newspaper reported at noon Japan time today that the Bank of Japan would increase the range of fluctuation permitted around its long-term interest rate guidance policy to 0.25% plus or minus vs the current center rate of 0.20%. 
The bigger news in terms of markets is likely to be the news about ETFs. The BOJ has had a "Target ETF Purchasing Rate" of ¥6 trillion/year for the past few years though actual purchasing has fluctuated up and down with demand (and famously briefly popped last March in the covid-crash).
The new guidance, according to the Nikkei, will be that the ¥6 trillion/year target will be abolished and the BOJ will only step in when markets get turbulent. 

The subject of the BOJ stopping to buy ETFs has been a repeated question of interest in Parliament when Mr Kuroda makes an appearance, and any number of People With Important Thoughts have opined on the issue, saying the BOJ should stop buying stocks.
When Mr Kuroda was in front of parliament four months ago in mid-November, answering questions about when the BOJ would stop and what it would do to stop buying, he was quite clear with his answer. From a Reuters note ...

The BOJ already buys ETFs “quite flexibly” and can reduce purchases when the market risk premium is not rising, Kuroda told parliament.
“If inflation hits our 2% target and an exit from our massive stimulus programme comes into sight, there will certainly be debate on how to end our ETF buying. But it’s premature to do so at this stage.”

Kazuo Momma, who used to be assistant governor at the BOJ and is now an economist at the Mizuho Research Institute had recently criticized the entire program, saying it is not something central banks should be doing. 

"The BOJ's ETF buying started out as an emergency step. It's not something central banks should be doing in the first place," he told Reuters [in response to the Kuroda Diet sessions].
"At the very least, the BOJ should stop buying ETFs except for when market sentiment sours enough to inflict severe damage to the economy."

After its December meeting, the BOJ said it would be conducting a policy review and the official review is expected tomorrow after the MPC decisions.
The Nikkei has jumped the gun. One assumes they do so with a fair bit of insider knowledge. But this policy looks like it came from Kazuo Momma.
But this should not come as that much of a surprise. 
The chart below can be separated into three sections. The thick red line stepping up is the official policy purchase rate line and the blue lines around it are actual BOJ purchases. The red and yellow dots (with the thin red line average) are the AM session down performance on days when the BOJ does NOT buy, showing that on average, the BOJ is letting larger falls go by without stepping in, and the green line is TOPIX.
This tells you the BOJ has been less present than for a long time, and has stepped back. The BOJ has been virtually tapering for months. The fact that they stepped in early and in size last March tells you what they will do if things get turbulent.The question now is what does that change. 
That and understanding the impact of the cessation of buying on different stocks below the fold. 


Changes In BOJ ETF Buying - Which Stocks Impacted and How?

<p>With Toshiba’s EGM set for tomorrow, we summarise its dispute with shareholders Effissimo and Farallon and discuss potential implications of the vote, not just for Toshiba, but for Japan more broadly.</p>

With Toshiba’s EGM set for tomorrow, we summarise its dispute with shareholders Effissimo and Farallon and discuss potential implications of the vote, not just for Toshiba, but for Japan more broadly.

Japan

Toshiba Corporation manufactures and markets electrical and electronic products. The Company's products include digital products such as PCs and televisions, NAND flash memories, and system LSIs (large-scale integrated), as well as social infrastructures such as power generators, medical equipment, and home appliances.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Toshiba Corp (6502 JP)

Freee Placement - Needs to Correct by a Whole Lot More

Freee (4478 JP) (freee) is looking to raise around US$400m via selling a mix of primary and secondary shares. In this note, we'll run the deal...

Sumeet Singh

LG Corp – The Whitebox Case in Light of Activist Victory at Toshiba

Could the Effisimo's victory over Toshiba at its EGM signal a wave of improved corporate governance in Asia? LG Corp's battle against Whitebox will...

Mio Kato

Asia Short Interest: Kuaishou, JD Health, Xiaomi, 7&I, Monex, Rakuten, Hynix, Hyundai, Fitipower

The Insight looks at large short interest movements across HK, Japan, Korea and Taiwan stocks and highlights large increases/decreases in shorts to...

Brian Freitas

Changes In BOJ ETF Buying - Which Stocks Impacted and How?

The Nikkei says the BOJ will stop its normal ETF buying program. Stocks reacted negatively, but then came back. This is a look at the impact.

Travis Lundy

Toshiba – The EGM Showdown

With Toshiba's much anticipated EGM scheduled for tomorrow we articulate why we believe Effissimo's proposal has a better chance to succeed than...

Mio Kato

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)