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

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<li>
<a href="https://www.smartkarma.com/entities/amtd-digital" target="_blank" data-smartkarma-citation="entities:36214:1" rel="noopener">AMTD Digital (HKD US)</a> shares are up 230x since its listing at US$7.80 per ADS on 15 July. Its market cap is a staggering US$334 billion.</li>
<li>
<a href="https://www.smartkarma.com/entities/amtd-idea-group" target="_blank" data-smartkarma-citation="entities:28137:1" rel="noopener">AMTD Idea Group (AMTD US)</a> accounts for 99.4% of the voting power. In January 2022, it increased its AMTD Digital shareholding to 97.1% of outstanding shares at US$1.2 billion valuation.</li>
<li>AMTD Digital’s financials are uninspiring and cannot justify the share price ramp. No sane valuation methodology can support the share price.    </li>
</ul>



AMTD Digital (HKD US) shares are up 230x since its listing at US$7.80 per ADS on 15 July. Its market cap is a staggering US$334 billion.

AMTD Idea Group (AMTD US) accounts for 99.4% of the voting power. In January 2022, it increased its AMTD Digital shareholding to 97.1% of outstanding shares at US$1.2 billion valuation.
AMTD Digital’s financials are uninspiring and cannot justify the share price ramp. No sane valuation methodology can support the share price.    


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

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Another Weak Number: Waterdrop (WDH.US) reported a third set of losses since its IPO, coming in at a negative CNY 477 mn  - improving CNY 227 mn (32.5%) QOQ; </li>
<li>
High Cumulative Losses: Cumulative losses since its IPO are over CNY 1.5 bn, and represent about 57% of IPO funds raised. Challenges come from weaker revenues and excessive costs; and    </li>
<li>
Notice” To Online Insurers: The CBIRC's roll out of the internet insurance revision plan aims to scrutinize mainland China’s insurance technology platforms. </li>
</ul>



Another Weak Number: Waterdrop (WDH.US) reported a third set of losses since its IPO, coming in at a negative CNY 477 mn  - improving CNY 227 mn (32.5%) QOQ; 

High Cumulative Losses: Cumulative losses since its IPO are over CNY 1.5 bn, and represent about 57% of IPO funds raised. Challenges come from weaker revenues and excessive costs; and    

Notice” To Online Insurers: The CBIRC's roll out of the internet insurance revision plan aims to scrutinize mainland China’s insurance technology platforms. 


Research from EqualOcean, EqualOcean

EqualOcean

Research from EqualOcean

EqualOcean is an investment research firm and information service provider focusing on China's Technology, Automotive and Consumer Internet sectors. With unique research and due diligence methodology, we provide tailored insights into a wide range of industries and companies, empowering our clients' value-added decisions.

Founded in 2014, EqualOcean is headquartered in Beijing and has offices in Shanghai, Shenzhen and New York.

<ul><li>Huize starts to show its forte – but loses steam</li><li>SelectQuote, an American 'twin' - Both operating online 'B2B2C' insurance intermediary businesses, Huize and SelectQuote (SLQT:NYSE) share several similarities. </li><li>Bottom line - Currently, the P/S ratio for Huize is at the trough – only 0.36 as of the press time – far below its peers as well as the industry average. </li></ul>

Huize starts to show its forte – but loses steamSelectQuote, an American 'twin' - Both operating online 'B2B2C' insurance intermediary businesses, Huize and SelectQuote (SLQT:NYSE) share several similarities. Bottom line - Currently, the P/S ratio for Huize is at the trough – only 0.36 as of the press time – far below its peers as well as the industry average. 

Without Backing from the Tech Giants, Huize Bucks the Trend

<a href="https://www.smartkarma.com/entities/policybazaar-insurance-web-aggregator" target="_blank" data-smartkarma-citation="entities:33470:1" rel="noopener">Policybazaar Insurance Web Aggregator (1569999D IN)</a>/PB Fintech operates the Policybazaar and Paisabazaar platforms in India. Policybazaar is India’s largest digital insurance marketplace with a 93.4% market share based on the number of policies sold in FY20, according to Frost &amp; Sullivan. Paisabazaar is India’s largest digital consumer credit marketplace with a 53.7% market share, based on disbursals in FY21, according to Frost &amp; Sullivan. PB Fintech’s shareholders include SoftBank Vision Fund, <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>, Tiger Global and <a href="https://www.smartkarma.com/entities/info-edge-india-ltd" target="_blank" data-smartkarma-citation="entities:14461:1" rel="noopener">Info Edge India (INFOE IN)</a>.   PB Fintech will launch its IPO on 01 November at an indicative price range of Rs940-980. The IPO comprises a primary raise of Rs37,500 million ($502 million) and a secondary raise up to Rs19,600 million ($262 million). The main secondary seller is SoftBank Vision Fund which aims to sell up to Rs18,750 million ($250 million) worth of shares. In <a href="https://www.smartkarma.com/insights/pb-fintech-policybazaar-ipo-initiation-insurance-policy" target="_blank" data-smartkarma-citation="insights:55735" rel="noopener">PB Fintech (Policybazaar) IPO Initiation: Insurance Policy</a>, we stated that Policybazaar, which is India’s largest digital consumer credit marketplace, is a direct play on the rising insurance penetration rates in India. PB Fintech operates an asset-light capital model and does not underwrite any insurance or retain any credit risk on loans. The business is well-positioned to benefit from the post-COVID-19 recovery in insurance policies sales and loan disbursals by its partners. Helped by strong brand recognition and retention rates, the favourable unit economics also suggest that medium-term profitability is within reach. <div class="content-highlight">In this note, we look at the updated prospectus which outlines the 1QFY22 results (for the quarter ending June) and recent developments. Overall, the recent results reinforce our view that PB Fintech has attractive fundamentals. We will discuss valuation in our next note.  </div>

Policybazaar Insurance Web Aggregator (1569999D IN)/PB Fintech operates the Policybazaar and Paisabazaar platforms in India. Policybazaar is India’s largest digital insurance marketplace with a 93.4% market share based on the number of policies sold in FY20, according to Frost &amp; Sullivan. Paisabazaar is India’s largest digital consumer credit marketplace with a 53.7% market share, based on disbursals in FY21, according to Frost &amp; Sullivan. PB Fintech’s shareholders include SoftBank Vision Fund, Tencent (700 HK), Tiger Global and Info Edge India (INFOE IN).   PB Fintech will launch its IPO on 01 November at an indicative price range of Rs940-980. The IPO comprises a primary raise of Rs37,500 million ($502 million) and a secondary raise up to Rs19,600 million ($262 million). The main secondary seller is SoftBank Vision Fund which aims to sell up to Rs18,750 million ($250 million) worth of shares. In PB Fintech (Policybazaar) IPO Initiation: Insurance Policy, we stated that Policybazaar, which is India’s largest digital consumer credit marketplace, is a direct play on the rising insurance penetration rates in India. PB Fintech operates an asset-light capital model and does not underwrite any insurance or retain any credit risk on loans. The business is well-positioned to benefit from the post-COVID-19 recovery in insurance policies sales and loan disbursals by its partners. Helped by strong brand recognition and retention rates, the favourable unit economics also suggest that medium-term profitability is within reach. In this note, we look at the updated prospectus which outlines the 1QFY22 results (for the quarter ending June) and recent developments. Overall, the recent results reinforce our view that PB Fintech has attractive fundamentals. We will discuss valuation in our next note.  

PB Fintech (Policybazaar) IPO: Signs of Life

*Another Weak Number: Waterdrop, Inc. (WDH.US) [Waterdrop] reported its second set of earnings results since its IPO, coming in at a negative CNY 656 mn  - declining CNY 286 mn or 77.3% linked quarter bringing cumulative losses since the IPO to over CNY 1.0 bn or about 38% of IPO funds raised. Challenges came from overall cost growth of CNY 411 mn (30.6%) due primarily to sales and marketing spend; and    *”Notice” To Online Insurers: The China Banking and Insurance Regulatory Commission’s (CBIRC) roll out of the internet insurance revision plan “Notice on Carrying out Special Rectification of Internet Insurance Disorders”, aims to scrutinize mainland China’s insurance technology platforms, ordering firms and agencies to end improper marketing and pricing practices, and improve privacy protections. This will be a direct challenge for Waterdrop and other mainland Chinese insurers.

*Another Weak Number: Waterdrop, Inc. (WDH.US) [Waterdrop] reported its second set of earnings results since its IPO, coming in at a negative CNY 656 mn  - declining CNY 286 mn or 77.3% linked quarter bringing cumulative losses since the IPO to over CNY 1.0 bn or about 38% of IPO funds raised. Challenges came from overall cost growth of CNY 411 mn (30.6%) due primarily to sales and marketing spend; and    *”Notice” To Online Insurers: The China Banking and Insurance Regulatory Commission’s (CBIRC) roll out of the internet insurance revision plan “Notice on Carrying out Special Rectification of Internet Insurance Disorders”, aims to scrutinize mainland China’s insurance technology platforms, ordering firms and agencies to end improper marketing and pricing practices, and improve privacy protections. This will be a direct challenge for Waterdrop and other mainland Chinese insurers. 

United States

Waterdrop Inc. is an insurtech platform headquartered in China. Founded in 2016, with coverage of Waterdrop Insurance Marketplace and Medical Crowdfunding, Waterdrop offers insurance and healthcare service through technology.

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Waterdrop Inc (WDH US)

AMTD Digital: Irrational Frenzy 2.0

The shares are currently up 143% today. AMTD’s financials are uninspiring and cannot justify the share price ramp. No sane valuation assumption can...

Arun George

Waterdrop – Still Bleeding

WATERDROP: Waterdrop reported losses of CNY 477 mn - improving CNY 227 mn or 32.5% linked quarter and bringing cumulative losses since its IPO to...

Thomas J. Monaco

Without Backing from the Tech Giants, Huize Bucks the Trend

We've all heard terms like traditional insurance companies and third-party insurance agents – but there may be less awareness about insurance...

EqualOcean

PB Fintech (Policybazaar) IPO: Signs of Life

PB Fintech (Policybazaar) will launch its IPO on 01 November to raise up to $764m. The updated prospectus reinforce our view that PB Fintech has...

Arun George

Waterdrop – Someone Plug The Dike

WATERDROP: WDH reported its second set of earnings since the IPO, coming in at a negative CNY 656 mn - declining 77.3% QOQ bringing cumulative...

Thomas J. Monaco

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