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.

Event-Driven

<ul>
<li>PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.</li>
<li>The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.</li>
<li>In this note, we'll talk about the latest developments, possible outcomes and implications.</li>
</ul>


PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
In this note, we'll talk about the latest developments, possible outcomes and implications.


China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Equity Bottom-Up

Summary: Coursera, an online education platform will see its business model decelerate faster than expected. While the TAM trajectory of online education has clearly inflected higher due to the pandemic, we think  the Coursera’s growth trajectory is being mismodeled based on 2020’s surge in signups. Coursera’s profitability is dependent on scaling its enterprise and degree customer bases. While the demand for upskilling employees is real, intense competition from LinkedIn, Pluralsight, and others may crimp growth and gross margins segment, while a lack of leverage with its content suppliers (university partners), plus edX’s open source alternative  weaken revenue sharing over time. A lack of tangible evidence of Coursera’s skills-based credentialing translating to jobs will result in underwhelming consumer growth and lack of pricing power. Downside risks around regulation and competitive incursion by tech platforms paired with an obscene valuation make a compelling short case. Base Case Valuation: $33                                  Bull Case: $57                                 Bear Case: $20<div class="content-highlight">Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</div>

Summary: Coursera, an online education platform will see its business model decelerate faster than expected. While the TAM trajectory of online education has clearly inflected higher due to the pandemic, we think  the Coursera’s growth trajectory is being mismodeled based on 2020’s surge in signups. Coursera’s profitability is dependent on scaling its enterprise and degree customer bases. While the demand for upskilling employees is real, intense competition from LinkedIn, Pluralsight, and others may crimp growth and gross margins segment, while a lack of leverage with its content suppliers (university partners), plus edX’s open source alternative  weaken revenue sharing over time. A lack of tangible evidence of Coursera’s skills-based credentialing translating to jobs will result in underwhelming consumer growth and lack of pricing power. Downside risks around regulation and competitive incursion by tech platforms paired with an obscene valuation make a compelling short case. Base Case Valuation: $33                                  Bull Case: $57                                 Bear Case: $20Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

APAC IPOs & Placements

Zhen Zhou, Toh

New Oriental Education & Techn / Equity Bottom-Up

China online education are trading about 60% lower on average since a year ago. This was largely due to expectations that there will be tightening of regulations on after-school tutoring sector including online education sectors. In this note, we will discuss how we would position heading into the tightening of regulations.

China online education are trading about 60% lower on average since a year ago. This was largely due to expectations that there will be tightening of regulations on after-school tutoring sector including online education sectors. In this note, we will discuss how we would position heading into the tightening of regulations.

China Online Education - Diversified Revenue Stream Wins Here - Balance in All Things

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

<ul>
<li>Total revenue grew by 15% YoY and operating margin improved YoY in 1Q22.</li>
<li>The authorities began to grant licenses and new games will be launched in China and overseas.</li>
<li>We set an upside of 25% and a price target at US$120. Buy.</li>
</ul>


Total revenue grew by 15% YoY and operating margin improved YoY in 1Q22.
The authorities began to grant licenses and new games will be launched in China and overseas.
We set an upside of 25% and a price target at US$120. Buy.


NetEase (9999 HK): Steady Without New Games in 1Q22 and New Games in Pipeline, Buy

<ul>
<li>NTES is exploring overseas market by starting studios and selling games.</li>
<li>We believe NTES has the experience in dealing with the license suspension for new games.</li>
<li>We believe the stock has an upside of 48% for year end 2022.</li>
</ul>


NTES is exploring overseas market by starting studios and selling games.
We believe NTES has the experience in dealing with the license suspension for new games.
We believe the stock has an upside of 48% for year end 2022.


NetEase (NTES) Pre-Earnings: Exploring Overseas Market

China

Youdao, Inc. develops and markets mobile internet applications. The Company provides language translation applications, personal cloud applications, e-commerce shopping applications, and other related products. Youdao also develops investment related applications.

Youdao, Inc. (DAO US)

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

Coursera: Back to School

Coursera, an online education platform will see its business model decelerate faster than expected. Downside risks around regulation and...

Aaron Gabin

China Online Education - Diversified Revenue Stream Wins Here - Balance in All Things

China online education are trading about 60% lower on average since a year ago. This was largely due to expectations that there will be tightening...

Zhen Zhou, Toh

NetEase (9999 HK): Steady Without New Games in 1Q22 and New Games in Pipeline, Buy

Total revenue grew by 15% YoY and operating margin improved YoY in 1Q22. The authorities began to grant licenses and new games will be launched in...

Ming Lu

NetEase (NTES) Pre-Earnings: Exploring Overseas Market

NTES is exploring oversea market. We believe NTES has the experience in dealing with the license suspension for new games. We believe the stock has...

Ming Lu