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

'Quantamental' Japan Specialist, LightStream Research

Campbell Gunn

'Quantamental' Japan Specialist

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.

Thematic (Sector/Industry)

<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/146/525/original/2020-07-17_06-19-01.png?1594934496" class="editor-image img-responsive" data-smartkarma-image-id="146525"></figure><div class="content-caption">Source • Japan Analytics</div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/146/527/original/2020-07-17_06-37-29.png?1594935664" class="editor-image img-responsive" data-smartkarma-image-id="146527"></figure><div class="content-caption">Source • ZOOM</div><p><strong><a href="https://www.smartkarma.com/entities/zoom-corp" target="_blank" data-smartkarma-citation="entities:28943:1" rel="noopener">ZOOM (6694 JP)</a></strong>- Micro-cap ZOOM, not to be confused with <a href="https://www.smartkarma.com/entities/zoom-technologies-inc" target="_blank" data-smartkarma-citation="entities:28002:1" rel="noopener">ZOOM</a> US, although it appears many did just that in June, makes mobile audio recording equipment (as shown above) and was the only company that reported yesterday. The company has struggled in the wake of COVID-19 with parts shortages in China and the insolvency of two distribution companies in Europe which resulted in a ¥240 million impairment loss. Zoom has recently bought out the minorities in Zoom North America and will book a re-valuation gain which accounts for ¥178 million or two-thirds of the upward revision. Zoom has not generated positive operating cash flow since listing in March 2017 and has invested significantly in inventory and fixed assets for marginal residual returns. Despite yesterday's highly prescient 6.7% gain in Soom shares, we do not expect a second strike of lighting.</p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/146/528/original/2020-07-17_06-43-09.png?1594936605" class="editor-image img-responsive" data-smartkarma-image-id="146528"></figure><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/146/529/original/2020-07-17_06-55-14.png?1594936629" class="editor-image img-responsive" data-smartkarma-image-id="146529"></figure><div style="text-align: center;" class="content-caption">Source • Japan Analytics</div><hr><p></p><p style="text-align: center;"><strong>• COVID-19 •</strong></p><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/146/536/original/File%202020-07-17%202%2039%2040.jpeg?1594937209" class="editor-image img-responsive" data-smartkarma-image-id="146536"></figure><div class="content-caption">Source • Our World In Data</div><p><strong>IN OTHER NEWS</strong> - Tokyo recorded a new recorded high in daily confirmed cases of COVID-19 yesterday, and Japan overall is back in the red-zone in the chart above with greater than 3% increase in the seven0day rolling average. In the last month, Japan has seen one of the fastest rates in case -count growth globally, and the reimposition of restrictions on social activity will soon be necessary. Such a change in direction is not yet discounted in the stock market. </p><div>
<hr>
<p style="text-align: center;"><strong>DAILY STATS</strong></p>
</div><hr><div><p style="text-align: center;"><br><strong>6 Annual • 2 Interim Forecasts/Revision</strong>s</p></div><div><ul>
<li>
<strong>Annual Forecast/Revision Score:</strong> 1 Positive / 1 Neutral / 4 Negative</li>
<li>
<strong>Interim Forecast/Revision Score Change:</strong> 1 Positive / 0 Neutral / 1 Negative</li>
<li>
<strong>Average Forecast/Revision Score Change:</strong> 0.8</li>
</ul></div>

Source • Japan AnalyticsSource • ZOOMZOOM (6694 JP)- Micro-cap ZOOM, not to be confused with ZOOM US, although it appears many did just that in June, makes mobile audio recording equipment (as shown above) and was the only company that reported yesterday. The company has struggled in the wake of COVID-19 with parts shortages in China and the insolvency of two distribution companies in Europe which resulted in a ¥240 million impairment loss. Zoom has recently bought out the minorities in Zoom North America and will book a re-valuation gain which accounts for ¥178 million or two-thirds of the upward revision. Zoom has not generated positive operating cash flow since listing in March 2017 and has invested significantly in inventory and fixed assets for marginal residual returns. Despite yesterday's highly prescient 6.7% gain in Soom shares, we do not expect a second strike of lighting.Source • Japan Analytics• COVID-19 •Source • Our World In DataIN OTHER NEWS - Tokyo recorded a new recorded high in daily confirmed cases of COVID-19 yesterday, and Japan overall is back in the red-zone in the chart above with greater than 3% increase in the seven0day rolling average. In the last month, Japan has seen one of the fastest rates in case -count growth globally, and the reimposition of restrictions on social activity will soon be necessary. Such a change in direction is not yet discounted in the stock market. 

DAILY STATS
 6 Annual • 2 Interim Forecasts/Revisions

Annual Forecast/Revision Score: 1 Positive / 1 Neutral / 4 Negative

Interim Forecast/Revision Score Change: 1 Positive / 0 Neutral / 1 Negative

Average Forecast/Revision Score Change: 0.8


🇯🇵 JAPAN • Results & Revisions 16th July - The Other Zoom, ISI-D, Adastria

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Equity Bottom-Up

<ul>
<li>The spreading of COVID-19 has challenged the existence of most companies around the world. However, the share prices of communication platforms such as <a href="https://www.smartkarma.com/entities/zoom-technologies-inc" target="_blank" data-smartkarma-citation="entities:28002:1" rel="noopener">Zoom Technologies Inc (ZOOM US)</a> and <a href="https://www.smartkarma.com/entities/slack-technologies-inc" target="_blank" data-smartkarma-citation="entities:27904:1" rel="noopener">Slack Technologies Inc (WORK US)</a> soared more than 120% and 25% YTD respectively, while the broader market declined about 20%.</li>
<li>People are stuck indoors during this COVID19 pandemic, and they are turning to video calls to catch up with their friends and family. At the same time, remote working has been promoted by almost all companies around the world. As a result, the demand for communication platforms such as Zoom and slack has increased during this period.</li>
<li>However, we feel it is too late for an investor to get on board with such communication platforms, as we feel that the soaring demand is already reflected in the share price.</li>
<li>A related industry to communication platforms, which might also benefit from this COVID19 pandemic is global telcos.</li>
<li>It appears that the investors may have overlooked the potential benefit to telcos and the selloff of global equities driven by the virus pandemic which may have caused a substantial as well as an irrational drop in the share price.</li>
<li>This is the first of a series of insights explaining our reasoning behind our bullish stance on global telcos. In this insight, we focus on the overall industry and explain our reasoning for telcos to outperform the market in the short term. In the next insight, we will be covering a few names in the sector that could benefit the most from the current crisis.</li>
</ul>


The spreading of COVID-19 has challenged the existence of most companies around the world. However, the share prices of communication platforms such as Zoom Technologies Inc (ZOOM US) and Slack Technologies Inc (WORK US) soared more than 120% and 25% YTD respectively, while the broader market declined about 20%.
People are stuck indoors during this COVID19 pandemic, and they are turning to video calls to catch up with their friends and family. At the same time, remote working has been promoted by almost all companies around the world. As a result, the demand for communication platforms such as Zoom and slack has increased during this period.
However, we feel it is too late for an investor to get on board with such communication platforms, as we feel that the soaring demand is already reflected in the share price.
A related industry to communication platforms, which might also benefit from this COVID19 pandemic is global telcos.
It appears that the investors may have overlooked the potential benefit to telcos and the selloff of global equities driven by the virus pandemic which may have caused a substantial as well as an irrational drop in the share price.
This is the first of a series of insights explaining our reasoning behind our bullish stance on global telcos. In this insight, we focus on the overall industry and explain our reasoning for telcos to outperform the market in the short term. In the next insight, we will be covering a few names in the sector that could benefit the most from the current crisis.


Supun Walpola

<ul>
<li><strong>In this note, we look at the Google Play rankings of some popular mobile apps in the US, offered by public companies and potential IPO candidates, to get an idea as to how online businesses are shaping up as the US goes into an indefinite lockdown. </strong></li>
<li>A rather surprising theme across the board is that entertainment-related apps (such as video streaming, music, social media, gaming, etc.) haven’t really picked up despite people being stuck at home. Could this be because people are still in panic?</li>
<li>On the other hand, the lockdown seems to be working out well for some relatively newer apps, like Disney+, Amazon Prime, Smule, TikTok, and Nintendo Switch Online, with people willing to try new things in their newfound “free” time.</li>
<li>The sharing economy is falling apart – with both ride-hailing and food delivery services being interrupted.</li>
<li>As expected, the beneficiaries of the lockdown are, grocery delivery, video conferencing/team working and distant learning services.</li>
</ul>


In this note, we look at the Google Play rankings of some popular mobile apps in the US, offered by public companies and potential IPO candidates, to get an idea as to how online businesses are shaping up as the US goes into an indefinite lockdown. 
A rather surprising theme across the board is that entertainment-related apps (such as video streaming, music, social media, gaming, etc.) haven’t really picked up despite people being stuck at home. Could this be because people are still in panic?
On the other hand, the lockdown seems to be working out well for some relatively newer apps, like Disney+, Amazon Prime, Smule, TikTok, and Nintendo Switch Online, with people willing to try new things in their newfound “free” time.
The sharing economy is falling apart – with both ride-hailing and food delivery services being interrupted.
As expected, the beneficiaries of the lockdown are, grocery delivery, video conferencing/team working and distant learning services.


What Are US Smartphone Users Downloading While in Lockdown?

<p><a href="https://www.smartkarma.com/entities/dynatrace-holdings-llc" target="_blank" data-smartkarma-citation="entities:28158:1" rel="noopener">Dynatrace Holdings LLC (DT US)</a> is a US-based Application Performance Monitoring (APM) SaaS company that is set go public on Monday (29th Monday 2019). At the mid-point of the IPO price range, Dynatrace is valued at a market cap of $3.5bn and an EV of $2.1bn. Dynatrace plans to raise $427m (at the mid-point of the IPO price range) floating 12% of ownership.</p>
<p>Dynatrace is yet another opportunity for investors to get exposure to the enterprise SaaS market following the success of recent IPOs like <a href="https://www.smartkarma.com/entities/slack-technologies-inc" target="_blank" data-smartkarma-citation="entities:27904:1" rel="noopener">Slack Technologies Inc (WORK US)</a>, <a href="https://www.smartkarma.com/entities/zoom-technologies-inc" target="_blank" data-smartkarma-citation="entities:28002:1" rel="noopener">Zoom Technologies Inc (ZOOM US)</a>, <a href="https://www.smartkarma.com/entities/crowdstrike-holdings-inc" target="_blank" data-smartkarma-citation="entities:28117:1" rel="noopener">Crowdstrike Holdings Inc (CRWD US)</a> and <a href="https://www.smartkarma.com/entities/medallia-inc" target="_blank" data-smartkarma-citation="entities:28160:1" rel="noopener">Medallia Inc (MDLA US)</a>. Dynatrace’s “all-in-one” AI-enabled software intelligence platform allows the company to compete effectively with other APM solutions currently in the market, however, investors should be wary of tightening competition in the APM space and Dynatrace’s higher customer acquisition costs both in terms of discounted prices, and higher sales and marketing costs which would deter the company’s profitability going forward.</p>

Dynatrace Holdings LLC (DT US) is a US-based Application Performance Monitoring (APM) SaaS company that is set go public on Monday (29th Monday 2019). At the mid-point of the IPO price range, Dynatrace is valued at a market cap of $3.5bn and an EV of $2.1bn. Dynatrace plans to raise $427m (at the mid-point of the IPO price range) floating 12% of ownership.
Dynatrace is yet another opportunity for investors to get exposure to the enterprise SaaS market following the success of recent IPOs like Slack Technologies Inc (WORK US), Zoom Technologies Inc (ZOOM US), Crowdstrike Holdings Inc (CRWD US) and Medallia Inc (MDLA US). Dynatrace’s “all-in-one” AI-enabled software intelligence platform allows the company to compete effectively with other APM solutions currently in the market, however, investors should be wary of tightening competition in the APM space and Dynatrace’s higher customer acquisition costs both in terms of discounted prices, and higher sales and marketing costs which would deter the company’s profitability going forward.

Dynatrace IPO: Attractive at 3.8x EV/Rev but High CAC Is a Concern

China

Zoom Technologies, Inc., through its subsidiaries manufactures, researches, develops and sells electronic communication products for the mobile phones, wireless communication circuitry, and related software products. The Company's products are both exported and sold domestically.

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Zoom Technologies Inc (ZOOM US)

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

🇯🇵 JAPAN • Results & Revisions 16th July - The Other Zoom, ISI-D, Adastria

ZOOM (6694 JP)- Micro-cap ZOOM, not to be confused with ZOOM US, although it appears many did just that in June, makes mobile audio recording...

Campbell Gunn

Global Telcos: An Overlooked COVID Play

The spreading of COVID-19 has challenged the existence of most companies around the world. However, the share prices of communication platforms...

Oshadhi Kumarasiri

What Are US Smartphone Users Downloading While in Lockdown?

In this note, we look at the Google Play rankings of some popular mobile apps in the US, offered by public companies and potential IPO candidates,...

Supun Walpola

Dynatrace IPO: Attractive at 3.8x EV/Rev but High CAC Is a Concern

Dynatrace Holdings LLC (DT US) is a US-based Application Performance Monitoring (APM) SaaS company that is set go public on Monday (29th Monday...

Supun Walpola

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