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Growth Ideas

Brief Growth Ideas: Hansoh Pharma (翰森制药) Post-IPO Trading Update: Fairly Valued and more

By | Daily Briefs, Growth Ideas

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Brief Growth Ideas: Hansoh Pharma (翰森制药) Post-IPO Trading Update: Fairly Valued and more

By | Daily Briefs, Growth Ideas

In this briefing:

  1. Hansoh Pharma (翰森制药) Post-IPO Trading Update: Fairly Valued
  2. Revisiting Nagacorp: The News Is Good and Apt to Get Better, yet the Stock Is Still Cheap

1. Hansoh Pharma (翰森制药) Post-IPO Trading Update: Fairly Valued

Liquidity%20of%202019%20ipos%20%281%29

Hansoh Pharma’s IPO was priced at the high end and started trading last Friday. In our earlier note, we argued that the company should trade at least on par with its close peer, Sino Biopharm. Its strong debut echos our positive view on the deal. In this insight, we will summarize the allocation and trading on the first day, and update our views on the company’s valuation.


Our previous coverage on Hansoh Pharma

2. Revisiting Nagacorp: The News Is Good and Apt to Get Better, yet the Stock Is Still Cheap

Cambodia nagaworld chen lip keong casino facebook e1550838928366

  • Cambodia’s VIP gaming sector is showing vitality while slowing in other markets.
  • Buoyed by the success of Nagaworld2, the company has launched a Naga3 project plan to be financed 50% by its principal owner and internal funding.
  • Nagacorp is also betting on the Russian Far East with a project while Lawrence Ho has moved on concerned about higher gaming taxes there.

Get Straight to the Source on Smartkarma

Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.



Brief Growth Ideas: Douyu Vs Huya: 2Q Top Streamers Analysis and more

By | Daily Briefs, Growth Ideas

In this briefing:

  1. Douyu Vs Huya: 2Q Top Streamers Analysis
  2. IPO Radar: S Hotels & Resorts, Singha’s Hospitality Arm
  3. IVD Medical (華檢醫療) Trading Update – Concentrated Shareholding, Tiny Adjusted Free-Float
  4. ECM Weekly (13 Jul 2019) – Budweiser APAC IPO Cancelled, Douyu Listing Next Week
  5. Slack (WORK): The Next-Gen Enterprise Aggregation Platform

1. Douyu Vs Huya: 2Q Top Streamers Analysis

Douyu%20 %20monetization%20distribution

Douyu, one of the two major e-sports broadcasting company in China, launched its IPO to raise up to USD 944 million last week. In our previous insight, we covered the company’s fundamentals, the latest financial numbers, and a detailed comparison between Douyu and Huya. We also looked at the IPO valuations. 

In this insight, we will compare key metrics of top streamers on both platforms and try to answer two questions in this insight: 1) how dependent are both platforms on top streamers, and 2) what is the difference of operating metrics for top streamers on both platforms.


Our previous coverage on Douyu

2. IPO Radar: S Hotels & Resorts, Singha’s Hospitality Arm

Tour%20growth

Singha Group plans to launch the IPO of its hotel arm SHR in Q3’19. Interestingly, they have more rooms and higher room rates than Erawan. These are some observations we make about this upcoming IPO:

  • Structure. The IPO will be firmly underwritten by CIMB and includes 70m warrants for executives and subsidiaries and staggered lock-up periods and expected free float of 40%. Singha Group already has four other listed entities we know of, namely S, NVD, SPRIME, and BGC.
  • Business. Over the past 3 years, SHR has grown revenues and earnings by 63% and 53% respectively. Their portfolio includes 39 hotel properties spread over 5 countries and 3 continents. They include several international brands (Hilton, Hard Rock, Holiday Inns) as well as a few in-house brands (Santiburi, Outrigger).
  • Valuation. We conservatively value SHR at Bt5.3/sh using DCF valuation and Bt10.5/sh using relative valuation. Depending on the market sentiment during the IPO period, we would expect the stock to be closer to one end of this spectrum.
  • Risk. The company/underwriter identifies many risks, most notably competitive risks. Others mentioned include those linked to branding, events risk, Brexit (since they have 29 in UK), and economic risks.

3. IVD Medical (華檢醫療) Trading Update – Concentrated Shareholding, Tiny Adjusted Free-Float

Srtuggled

IVD Medical (1931 HK) raised US$131m at HK$3.07 per share, the bottom end of its IPO price range. We have previously covered the IPO in our note:

In this insight, we will update on the deal dynamics, implied valuation, and include a valuation sensitivity table.

4. ECM Weekly (13 Jul 2019) – Budweiser APAC IPO Cancelled, Douyu Listing Next Week

Total deals since inception accuracy rate since inception  chartbuilder%20%281%29

Aequitas Research puts out a weekly update on the deals that have been covered by Smartkarma Insight Providers recently, along with updates for upcoming IPOs.

It’s an unfortunate week for Asia’s ECM market as Budweiser Brewing Company APAC (1876 HK) was not able to price its IPO on Friday and, as of this morning, AB InBev announced that the IPO has been called off. Perhaps the massive deal size without cornerstone investors and the tight valuation discount were too much for investors to digest. In any case, it will likely affect the sentiment of any upcoming mega IPOs in Hong Kong.

Beyond that, next week will be filled with trading debuts. In Hong Kong, there are Zhongliang Holdings (2772 HK), Edvantage Group (382 HK), and Jinshang Bank Co Ltd (2558 HK) listing on Tuesday and Thursday. Zhongliang priced close to the bottom of its price range while Edvantage and Jinshang priced at and slightly above their mid-point respectively.

In Singapore, Prime Us Reit (PRIME SP) is listing on Friday while Douyu International Holdings (DOYU US) is listing on Wednesday. We heard that Douyu’s books have already been covered.

Beyond that, this week’s IPO performance in Hong Kong had been lacklustre. CIMC Vehicle Group Co Ltd (1839 HK) closed below its IPO price on the first day while IVD Medical (1931 HK) struggled and closed right at its IPO price.

Accuracy Rate:

Our overall accuracy rate is 72.5% for IPOs and 64% for Placements 

(Performance measurement criteria is explained at the end of the note)

New IPO filings this week

  • SinoMab Bioscience (Hong Kong, ~US$200m)

Below is a snippet of our IPO tool showing upcoming events for the next week. The IPO tool is designed to provide readers with timely information on all IPO related events (Book open/closing, listing, initiation, lock-up expiry, etc) for all the deals that we have worked on. You can access the tool here or through the tools menu.

Source: Aequitas Research, Smartkarma

News on Upcoming IPOs

Analysis on Upcoming IPOs

NameInsight
Hong Kong
Alibaba

Alibaba IPO/Secondary Listing – The Real IPO Only Begins on the 11th Day Post Listing ​

AscentageAscentage Pharma (亚盛医药) IPO: Too Early for an IPO
Ascentage

Ascentage Pharma (亚盛医药) IPO: Updates and Thoughts on HQP1351 (3rd Gen Bcr-Abl TKI) ​

Ant FinancialAnt Financial IPO Early Thought: Understand Fintech Empire, Growth & Risk Factors
ByteDance

ByteDance (字节跳动) IPO: How Jinri Toutiao Paves The Way for a Bigger Empire (Part 1)

ByteDance

ByteDance (字节跳动) IPO: Tiktok the No.1 Short Video App for a Good Reason (Part 2)

Clarity

Clarity Medical (清晰医疗) IPO: Proxy to HK SMILE Surgery Demand

China Feihe

China Feihe (中国飞鹤) IPO: New Numbers, New Red Flag, and Demographic Risk 

Helenbergh

Helenbergh (海伦堡) Early Thoughts – The Usual Red Flag – Related Party Transactions

Hut Chi-Med

Hutchison-China Med (和黄医药) H-Share Listing: MNC Partnerships Endorsed Its R&D Capabilities

JS Global

JS Global Lifestyle (JS 环球生活) Early Thoughts – Declaring US$470m Dividend Before IPO 

MicuRxMicuRx Pharma (盟科医药) IPO: Betting on Single Drug in the Not so Attractive Antibiotic Segment
Renrui

Renrui Human Resources (人瑞人才) Pre-IPO Review – Riding on China’s Unicorns 

SH Henlius

Shanghai Henlius (复宏汉霖) IPO: Not an Impressive Biosimilar Portfolio 

SH Henlius

Shanghai Henlius (复宏汉霖) IPO: Valuation of Four Biosimilars

Topsports Topsports International Holdings Pre-IPO – Performing Well but All Proceeds Will Likely Go to Belle 
Topsports Topsports Pre-IPO – Quick Take – Nike & Adidas Data Throws up Some Interesting Nuggets 
TOT Bio TOT Biopharm (东曜药业) IPO: An Unimpressive Pipeline 
TubatuTubatu Group Pre-IPO – Performing Better than Qeeka but Growing Much Slower, US$1bn a Stretch
TubatuTubatu Group Pre-IPO – Online -> Online + Offline -> Online -> ?
India
ASK ASK Investment Managers Pre-IPO – Riding on a Wave of Wealth 
Aakash EduAakash Education Pre-IPO – Fast Growth in an Attractive Sector
Anmol IndAnmol Industries Pre-IPO Quick Take – No Growth, Generous Payments to Founders
Bharat Hotels

Bharat Hotels Pre-IPO – Catching up with Peers 

CMS InfoCMS Info Systems Pre-IPO – When a PE Sells to Another PE… Only One Gets the Timing Right
Crystal CropCrystal Crop Protection Pre-IPO – DRHP Raises More Questions than in Answers
Flemingo Flemingo Travel Retail Pre-IPO – Its a Different Business in Every Country
Emami Cem Emami Cement Pre-IPO – Still in Ramp Up Phase but Emami Shares Pledge Might Lead to an Early IPO 
NSENSE IPO Preview- Not Only Fast..its Risky and Expensive
NSENational Stock Exchange Pre-IPO Review – Bigger, Better, Stronger but a Little Too Fast for Some
MazagonMazagon Dock IPO Preview: A Monopoly Submarine Yard in India with Captive Navy Spending
Mrs. BectorMrs. Bectors Food Specialities Pre-IPO Quick Take – Sales for Its Main Segment Have Been Sta

Lodha

Lodha Developers Pre-IPO – Second Time Lucky but Not Really that Much Affordable
LodhaLodha Developers IPO: Presence in Affordable Segment Saves Lodha the Blushes in a Sluggish Mkt
PNB MetPNB Metlife Pre-IPO Quick Take – Doesn’t Stack up Well Versus Its Larger Peers
Sterling Sterling and Wilson Solar Pre-IPO – Potentially India’s Largest IPO This Year – Ain’t No Sunshine 
Malaysia
QSRQSR Brands Pre-IPO – As Healthy as Fast Food
The U.S
AMTDI AMTD International (尚乘国际) Pre-IPO – Avoid at All Costs 
DouyuDouyu (斗鱼直播) IPO: Leader At a Cost
DouyuDouyu (斗鱼直播) IPO: Comparison with Huya (Part 2)
Douyu Douyu (斗鱼直播) IPO: Latest Numbers Bode Well for Listing (Part 3) 
Douyu Douyu (斗鱼直播) IPO: Detailed E-Sports Broadcasting Comparison with Huya 
MetenMeten International Edu (美联国际教育) Early Thoughts – Unclear Strategies
Wanda SportsWanda Sports (万达体育) Early Thoughts – Convoluted by Contracts and Cyclicality
Wanda Sports Wanda Sports (万达体育) Pre-IPO – Closer Look at the Business Segments ​

5. Slack (WORK): The Next-Gen Enterprise Aggregation Platform

Slack16

Obex Capital Management’s investment process seeks 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.

This case study evaluates Slack Technologies Inc (WORK US) business fundamentals, unit economics, valuation, investors, management and culture. The one page up front summary is meant to be used by investors as a road map to evaluate Slack’s progress over its first few quarters.

We start with a Best Working Thesis which reflects our initial conclusions from the case study. Key Questions positively answered would make us incrementally more bullish, while evidence of rising Thesis Threats may potentially puncture our view.

We lean bullish on Slack’s competitive positioning and open-ended growth opportunity, and despite recent history showing us that investors have been rewarded for buying richly valued SaaS companies, we would be inclined to wait for a better entry point.

Get Straight to the Source on Smartkarma

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Brief Growth Ideas: Wanda Sports (万达体育) IPO Review – Shareholders Selling in the IPO and more

By | Daily Briefs, Growth Ideas

In this briefing:

  1. Wanda Sports (万达体育) IPO Review – Shareholders Selling in the IPO
  2. Tencent (700 HK): Decides to Pay Less to Outside Game Distributors
  3. RBI Confidential Reports Reveal a Gulf Between Axis Bank Annual Reports and Reality
  4. HK Connect Ideas: Nine Weeks of Inflows, Sino Biopharm, Yadea, Anta, Aoyuan (2019-07-12)
  5. IndusInd Bank – Excessive Loan Growth, Especially To Property Developers

1. Wanda Sports (万达体育) IPO Review – Shareholders Selling in the IPO

Selling%20shareholders

Wanda Sports Group (WSG US) is looking to raise up to US$500m in its US IPO. We have previously covered the company in:

In this insight, we will go through our assumptions, valuation forecast, run the deal through our ECM framework.

2. Tencent (700 HK): Decides to Pay Less to Outside Game Distributors

Pic%202

  • Tencent gave game distributors a new offer which reduces Tencent’s payment from 50% to 30%.
  • We believe most distributors will have to accept the offer because Tencent is the largest game developer.
  • We believe Tencent made the right decision as the Company needs to improve its margins.
  • We also believe it is the right time as distributors do not have many new game sources after one year’s new game suspension.

3. RBI Confidential Reports Reveal a Gulf Between Axis Bank Annual Reports and Reality

Axis%20rbi%20rar

Under the threat of being pulled up for contempt of court by the Supreme Court of India, the Reserve Bank of India (RBI) finally disclosed the confidential inspection reports, called Risk Assessment Reports, of some banks requested under the Right to Information Act (RTI), 2005. The reports, though dated (from FY2013 till FY2015), provide a valuable insight into the actual working of banks, at times in contrast to the management’s commentary to shareholders at that time. In the case of Axis Bank, the divergence of views of the management and the banking supervisor is evident. Many in the sell-side and business media tend to regard management’s commentary with reverence, and these supposed sentinels regurgitate the same to their clients and the public without the rigour of critical evaluation. The now public disclosures of the RARs of banks is a rude wake-up call to these watchpersons to thoroughly scrutinize and challenge audited accounts and management commentary. Media reports cite that Axis Bank may be considering a US$ 1.3 bn equity issue, and although a new CEO has taken charge, investors may well want to exercise caution regarding management commentary in light of the RARs that have been made public.

4. HK Connect Ideas: Nine Weeks of Inflows, Sino Biopharm, Yadea, Anta, Aoyuan (2019-07-12)

Sunac china holdings limited %281918 hk%29 daily southbound inflow2019 07 15%2010 27 28

In our weekly HK Connect Snippet series, we aim to help our investors understand the flow of southbound trades via the Hong Kong Connect, as analyzed by our proprietary data engine, and highlight interesting observations. 

We split the stocks eligible for the Hong Kong Connect trade into three groups: HSCEI component stocks, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.

In this insight, we would like to highlight the nine consecutive weeks of inflows from mainland China to Hong Kong stocks. We highlight the inflows into China Vanke Co Ltd (H) (2202 HK), Tencent Holdings (700 HK)Sino Biopharmaceutical (1177 HK), and outflows from Future Land Development Holdings (1030 HK), Sunac China Holdings (1918 HK), and WH Group (288 HK). In addition, we would highlight the trading opportunities on Meituan Dianping (3690 HK) and Xiaomi Corp (1810 HK)‘s likely inclusion into Hong Kong Connect this month. In the mid cap space, we highlighted Kingdee International Software (268 HK), China Aoyuan Property (3883 HK), Yadea Group Holdings (1585 HK) and Anta Sports Products (2020 HK).

5. IndusInd Bank – Excessive Loan Growth, Especially To Property Developers

1

Of India’s listed banks, there is only one that has seen credit growth higher than Indusind Bank (IIB IN) over the past three years: Yes Bank Ltd (YES IN). This is not particularly good company. Adding enormous amounts of credit risk amidst a frail economic environment can lead to high NPL growth. IndusInd Bank expanded its loans 111% over the past three years, where Yes Bank is the only listed bank higher, at 146%. Perhaps it is no wonder that IndusInd bank saw its NPLs up 132% last year, higher than all listed banks, other than Yes Bank at 200%. There are also concerns with what appears to be excessive substandard loans and over zealous growth in real estate developer loans.

Get Straight to the Source on Smartkarma

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Brief Growth Ideas: Revisiting Nagacorp: The News Is Good and Apt to Get Better, yet the Stock Is Still Cheap and more

By | Daily Briefs, Growth Ideas

In this briefing:

  1. Revisiting Nagacorp: The News Is Good and Apt to Get Better, yet the Stock Is Still Cheap

1. Revisiting Nagacorp: The News Is Good and Apt to Get Better, yet the Stock Is Still Cheap

Cambodia nagaworld chen lip keong casino facebook e1550838928366

  • Cambodia’s VIP gaming sector is showing vitality while slowing in other markets.
  • Buoyed by the success of Nagaworld2, the company has launched a Naga3 project plan to be financed 50% by its principal owner and internal funding.
  • Nagacorp is also betting on the Russian Far East with a project while Lawrence Ho has moved on concerned about higher gaming taxes there.

Get Straight to the Source on Smartkarma

Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.



Brief Growth Ideas: Revisiting Nagacorp: The News Is Good and Apt to Get Better, yet the Stock Is Still Cheap and more

By | Daily Briefs, Growth Ideas

In this briefing:

  1. Revisiting Nagacorp: The News Is Good and Apt to Get Better, yet the Stock Is Still Cheap
  2. The RealReal IPO Preview: The Devil Wears Prada, Chanel, Louis Vuitton, Gucci, & Secondhand Too!

1. Revisiting Nagacorp: The News Is Good and Apt to Get Better, yet the Stock Is Still Cheap

Cambodia nagaworld chen lip keong casino facebook e1550838928366

  • Cambodia’s VIP gaming sector is showing vitality while slowing in other markets.
  • Buoyed by the success of Nagaworld2, the company has launched a Naga3 project plan to be financed 50% by its principal owner and internal funding.
  • Nagacorp is also betting on the Russian Far East with a project while Lawrence Ho has moved on concerned about higher gaming taxes there.

2. The RealReal IPO Preview: The Devil Wears Prada, Chanel, Louis Vuitton, Gucci, & Secondhand Too!

Realreal 2

The RealReal (REAL US), the largest online marketplace for authenticated, consigned luxury goods in the world, is getting ready for an IPO in the next few weeks. 

The consumers that own luxury goods such as a Prada bag but want to sell it can mail it to the company or drop it off at The RealReal stores. The RealReal would then authenticate the Prada bag and resell it. 

The company generated revenue of $207.4 million (up 54.9% YoY), gross profit of $136.9 million (up 56.2% YoY), and operating loss of $73.9 million in 2018 (from operating loss of $51.8 million in 2017). 

The RealReal is doing a very good job in generating repeat buyers. The RealReal repeat buyers as a percentage of GMV improved from 78% in 2015 to 80.7% in 2017 and 82.2% in 2018.

Get Straight to the Source on Smartkarma

Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.



Brief Growth Ideas: Tencent (700 HK): Decides to Pay Less to Outside Game Distributors and more

By | Daily Briefs, Growth Ideas

In this briefing:

  1. Tencent (700 HK): Decides to Pay Less to Outside Game Distributors
  2. RBI Confidential Reports Reveal a Gulf Between Axis Bank Annual Reports and Reality
  3. HK Connect Ideas: Nine Weeks of Inflows, Sino Biopharm, Yadea, Anta, Aoyuan (2019-07-12)
  4. IndusInd Bank – Excessive Loan Growth, Especially To Property Developers
  5. Douyu Vs Huya: 2Q Top Streamers Analysis

1. Tencent (700 HK): Decides to Pay Less to Outside Game Distributors

Pic%202

  • Tencent gave game distributors a new offer which reduces Tencent’s payment from 50% to 30%.
  • We believe most distributors will have to accept the offer because Tencent is the largest game developer.
  • We believe Tencent made the right decision as the Company needs to improve its margins.
  • We also believe it is the right time as distributors do not have many new game sources after one year’s new game suspension.

2. RBI Confidential Reports Reveal a Gulf Between Axis Bank Annual Reports and Reality

Axis%20share%20price%2015%20july%202019

Under the threat of being pulled up for contempt of court by the Supreme Court of India, the Reserve Bank of India (RBI) finally disclosed the confidential inspection reports, called Risk Assessment Reports, of some banks requested under the Right to Information Act (RTI), 2005. The reports, though dated (from FY2013 till FY2015), provide a valuable insight into the actual working of banks, at times in contrast to the management’s commentary to shareholders at that time. In the case of Axis Bank, the divergence of views of the management and the banking supervisor is evident. Many in the sell-side and business media tend to regard management’s commentary with reverence, and these supposed sentinels regurgitate the same to their clients and the public without the rigour of critical evaluation. The now public disclosures of the RARs of banks is a rude wake-up call to these watchpersons to thoroughly scrutinize and challenge audited accounts and management commentary. Media reports cite that Axis Bank may be considering a US$ 1.3 bn equity issue, and although a new CEO has taken charge, investors may well want to exercise caution regarding management commentary in light of the RARs that have been made public.

3. HK Connect Ideas: Nine Weeks of Inflows, Sino Biopharm, Yadea, Anta, Aoyuan (2019-07-12)

Southbound weekly inflow %28usd m%292019 07 13%2016 16 59

In our weekly HK Connect Snippet series, we aim to help our investors understand the flow of southbound trades via the Hong Kong Connect, as analyzed by our proprietary data engine, and highlight interesting observations. 

We split the stocks eligible for the Hong Kong Connect trade into three groups: HSCEI component stocks, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.

In this insight, we would like to highlight the nine consecutive weeks of inflows from mainland China to Hong Kong stocks. We highlight the inflows into China Vanke Co Ltd (H) (2202 HK), Tencent Holdings (700 HK)Sino Biopharmaceutical (1177 HK), and outflows from Future Land Development Holdings (1030 HK), Sunac China Holdings (1918 HK), and WH Group (288 HK). In addition, we would highlight the trading opportunities on Meituan Dianping (3690 HK) and Xiaomi Corp (1810 HK)‘s likely inclusion into Hong Kong Connect this month. In the mid cap space, we highlighted Kingdee International Software (268 HK), China Aoyuan Property (3883 HK), Yadea Group Holdings (1585 HK) and Anta Sports Products (2020 HK).

4. IndusInd Bank – Excessive Loan Growth, Especially To Property Developers

1

Of India’s listed banks, there is only one that has seen credit growth higher than Indusind Bank (IIB IN) over the past three years: Yes Bank Ltd (YES IN). This is not particularly good company. Adding enormous amounts of credit risk amidst a frail economic environment can lead to high NPL growth. IndusInd Bank expanded its loans 111% over the past three years, where Yes Bank is the only listed bank higher, at 146%. Perhaps it is no wonder that IndusInd bank saw its NPLs up 132% last year, higher than all listed banks, other than Yes Bank at 200%. There are also concerns with what appears to be excessive substandard loans and over zealous growth in real estate developer loans.

5. Douyu Vs Huya: 2Q Top Streamers Analysis

Huya%20 %20followers%20distribution

Douyu, one of the two major e-sports broadcasting company in China, launched its IPO to raise up to USD 944 million last week. In our previous insight, we covered the company’s fundamentals, the latest financial numbers, and a detailed comparison between Douyu and Huya. We also looked at the IPO valuations. 

In this insight, we will compare key metrics of top streamers on both platforms and try to answer two questions in this insight: 1) how dependent are both platforms on top streamers, and 2) what is the difference of operating metrics for top streamers on both platforms.


Our previous coverage on Douyu

Get Straight to the Source on Smartkarma

Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.



Brief Growth Ideas: The RealReal IPO Preview: The Devil Wears Prada, Chanel, Louis Vuitton, Gucci, & Secondhand Too! and more

By | Daily Briefs, Growth Ideas

In this briefing:

  1. The RealReal IPO Preview: The Devil Wears Prada, Chanel, Louis Vuitton, Gucci, & Secondhand Too!

1. The RealReal IPO Preview: The Devil Wears Prada, Chanel, Louis Vuitton, Gucci, & Secondhand Too!

Realreal 2

The RealReal (REAL US), the largest online marketplace for authenticated, consigned luxury goods in the world, is getting ready for an IPO in the next few weeks. 

The consumers that own luxury goods such as a Prada bag but want to sell it can mail it to the company or drop it off at The RealReal stores. The RealReal would then authenticate the Prada bag and resell it. 

The company generated revenue of $207.4 million (up 54.9% YoY), gross profit of $136.9 million (up 56.2% YoY), and operating loss of $73.9 million in 2018 (from operating loss of $51.8 million in 2017). 

The RealReal is doing a very good job in generating repeat buyers. The RealReal repeat buyers as a percentage of GMV improved from 78% in 2015 to 80.7% in 2017 and 82.2% in 2018.

Get Straight to the Source on Smartkarma

Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.



Brief Growth Ideas: RBI Confidential Reports Reveal a Gulf Between Axis Bank Annual Reports and Reality and more

By | Daily Briefs, Growth Ideas

In this briefing:

  1. RBI Confidential Reports Reveal a Gulf Between Axis Bank Annual Reports and Reality
  2. HK Connect Ideas: Nine Weeks of Inflows, Sino Biopharm, Yadea, Anta, Aoyuan (2019-07-12)
  3. IndusInd Bank – Excessive Loan Growth, Especially To Property Developers
  4. Douyu Vs Huya: 2Q Top Streamers Analysis
  5. IPO Radar: S Hotels & Resorts, Singha’s Hospitality Arm

1. RBI Confidential Reports Reveal a Gulf Between Axis Bank Annual Reports and Reality

Axis%20rbi%20rar

Under the threat of being pulled up for contempt of court by the Supreme Court of India, the Reserve Bank of India (RBI) finally disclosed the confidential inspection reports, called Risk Assessment Reports, of some banks requested under the Right to Information Act (RTI), 2005. The reports, though dated (from FY2013 till FY2015), provide a valuable insight into the actual working of banks, at times in contrast to the management’s commentary to shareholders at that time. In the case of Axis Bank, the divergence of views of the management and the banking supervisor is evident. Many in the sell-side and business media tend to regard management’s commentary with reverence, and these supposed sentinels regurgitate the same to their clients and the public without the rigour of critical evaluation. The now public disclosures of the RARs of banks is a rude wake-up call to these watchpersons to thoroughly scrutinize and challenge audited accounts and management commentary. Media reports cite that Axis Bank may be considering a US$ 1.3 bn equity issue, and although a new CEO has taken charge, investors may well want to exercise caution regarding management commentary in light of the RARs that have been made public.

2. HK Connect Ideas: Nine Weeks of Inflows, Sino Biopharm, Yadea, Anta, Aoyuan (2019-07-12)

Future land development holdings limited %281030 hk%29 daily southbound inflow2019 07 15%2010 27 27

In our weekly HK Connect Snippet series, we aim to help our investors understand the flow of southbound trades via the Hong Kong Connect, as analyzed by our proprietary data engine, and highlight interesting observations. 

We split the stocks eligible for the Hong Kong Connect trade into three groups: HSCEI component stocks, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.

In this insight, we would like to highlight the nine consecutive weeks of inflows from mainland China to Hong Kong stocks. We highlight the inflows into China Vanke Co Ltd (H) (2202 HK), Tencent Holdings (700 HK)Sino Biopharmaceutical (1177 HK), and outflows from Future Land Development Holdings (1030 HK), Sunac China Holdings (1918 HK), and WH Group (288 HK). In addition, we would highlight the trading opportunities on Meituan Dianping (3690 HK) and Xiaomi Corp (1810 HK)‘s likely inclusion into Hong Kong Connect this month. In the mid cap space, we highlighted Kingdee International Software (268 HK), China Aoyuan Property (3883 HK), Yadea Group Holdings (1585 HK) and Anta Sports Products (2020 HK).

3. IndusInd Bank – Excessive Loan Growth, Especially To Property Developers

1

Of India’s listed banks, there is only one that has seen credit growth higher than Indusind Bank (IIB IN) over the past three years: Yes Bank Ltd (YES IN). This is not particularly good company. Adding enormous amounts of credit risk amidst a frail economic environment can lead to high NPL growth. IndusInd Bank expanded its loans 111% over the past three years, where Yes Bank is the only listed bank higher, at 146%. Perhaps it is no wonder that IndusInd bank saw its NPLs up 132% last year, higher than all listed banks, other than Yes Bank at 200%. There are also concerns with what appears to be excessive substandard loans and over zealous growth in real estate developer loans.

4. Douyu Vs Huya: 2Q Top Streamers Analysis

Huya%20 %20monetization%20distribution

Douyu, one of the two major e-sports broadcasting company in China, launched its IPO to raise up to USD 944 million last week. In our previous insight, we covered the company’s fundamentals, the latest financial numbers, and a detailed comparison between Douyu and Huya. We also looked at the IPO valuations. 

In this insight, we will compare key metrics of top streamers on both platforms and try to answer two questions in this insight: 1) how dependent are both platforms on top streamers, and 2) what is the difference of operating metrics for top streamers on both platforms.


Our previous coverage on Douyu

5. IPO Radar: S Hotels & Resorts, Singha’s Hospitality Arm

Tour%20growth

Singha Group plans to launch the IPO of its hotel arm SHR in Q3’19. Interestingly, they have more rooms and higher room rates than Erawan. These are some observations we make about this upcoming IPO:

  • Structure. The IPO will be firmly underwritten by CIMB and includes 70m warrants for executives and subsidiaries and staggered lock-up periods and expected free float of 40%. Singha Group already has four other listed entities we know of, namely S, NVD, SPRIME, and BGC.
  • Business. Over the past 3 years, SHR has grown revenues and earnings by 63% and 53% respectively. Their portfolio includes 39 hotel properties spread over 5 countries and 3 continents. They include several international brands (Hilton, Hard Rock, Holiday Inns) as well as a few in-house brands (Santiburi, Outrigger).
  • Valuation. We conservatively value SHR at Bt5.3/sh using DCF valuation and Bt10.5/sh using relative valuation. Depending on the market sentiment during the IPO period, we would expect the stock to be closer to one end of this spectrum.
  • Risk. The company/underwriter identifies many risks, most notably competitive risks. Others mentioned include those linked to branding, events risk, Brexit (since they have 29 in UK), and economic risks.

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Brief Growth Ideas: HK Connect Ideas: Nine Weeks of Inflows, Sino Biopharm, Yadea, Anta, Aoyuan (2019-07-12) and more

By | Daily Briefs, Growth Ideas

In this briefing:

  1. HK Connect Ideas: Nine Weeks of Inflows, Sino Biopharm, Yadea, Anta, Aoyuan (2019-07-12)
  2. IndusInd Bank – Excessive Loan Growth, Especially To Property Developers
  3. Douyu Vs Huya: 2Q Top Streamers Analysis
  4. IPO Radar: S Hotels & Resorts, Singha’s Hospitality Arm
  5. IVD Medical (華檢醫療) Trading Update – Concentrated Shareholding, Tiny Adjusted Free-Float

1. HK Connect Ideas: Nine Weeks of Inflows, Sino Biopharm, Yadea, Anta, Aoyuan (2019-07-12)

China vanke co., ltd. %282202 hk%29 daily southbound inflow2019 07 15%2010 27 23

In our weekly HK Connect Snippet series, we aim to help our investors understand the flow of southbound trades via the Hong Kong Connect, as analyzed by our proprietary data engine, and highlight interesting observations. 

We split the stocks eligible for the Hong Kong Connect trade into three groups: HSCEI component stocks, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.

In this insight, we would like to highlight the nine consecutive weeks of inflows from mainland China to Hong Kong stocks. We highlight the inflows into China Vanke Co Ltd (H) (2202 HK), Tencent Holdings (700 HK)Sino Biopharmaceutical (1177 HK), and outflows from Future Land Development Holdings (1030 HK), Sunac China Holdings (1918 HK), and WH Group (288 HK). In addition, we would highlight the trading opportunities on Meituan Dianping (3690 HK) and Xiaomi Corp (1810 HK)‘s likely inclusion into Hong Kong Connect this month. In the mid cap space, we highlighted Kingdee International Software (268 HK), China Aoyuan Property (3883 HK), Yadea Group Holdings (1585 HK) and Anta Sports Products (2020 HK).

2. IndusInd Bank – Excessive Loan Growth, Especially To Property Developers

1

Of India’s listed banks, there is only one that has seen credit growth higher than Indusind Bank (IIB IN) over the past three years: Yes Bank Ltd (YES IN). This is not particularly good company. Adding enormous amounts of credit risk amidst a frail economic environment can lead to high NPL growth. IndusInd Bank expanded its loans 111% over the past three years, where Yes Bank is the only listed bank higher, at 146%. Perhaps it is no wonder that IndusInd bank saw its NPLs up 132% last year, higher than all listed banks, other than Yes Bank at 200%. There are also concerns with what appears to be excessive substandard loans and over zealous growth in real estate developer loans.

3. Douyu Vs Huya: 2Q Top Streamers Analysis

Douyu%20 %20followers%20distribution

Douyu, one of the two major e-sports broadcasting company in China, launched its IPO to raise up to USD 944 million last week. In our previous insight, we covered the company’s fundamentals, the latest financial numbers, and a detailed comparison between Douyu and Huya. We also looked at the IPO valuations. 

In this insight, we will compare key metrics of top streamers on both platforms and try to answer two questions in this insight: 1) how dependent are both platforms on top streamers, and 2) what is the difference of operating metrics for top streamers on both platforms.


Our previous coverage on Douyu

4. IPO Radar: S Hotels & Resorts, Singha’s Hospitality Arm

Sing%20hotel%20main

Singha Group plans to launch the IPO of its hotel arm SHR in Q3’19. Interestingly, they have more rooms and higher room rates than Erawan. These are some observations we make about this upcoming IPO:

  • Structure. The IPO will be firmly underwritten by CIMB and includes 70m warrants for executives and subsidiaries and staggered lock-up periods and expected free float of 40%. Singha Group already has four other listed entities we know of, namely S, NVD, SPRIME, and BGC.
  • Business. Over the past 3 years, SHR has grown revenues and earnings by 63% and 53% respectively. Their portfolio includes 39 hotel properties spread over 5 countries and 3 continents. They include several international brands (Hilton, Hard Rock, Holiday Inns) as well as a few in-house brands (Santiburi, Outrigger).
  • Valuation. We conservatively value SHR at Bt5.3/sh using DCF valuation and Bt10.5/sh using relative valuation. Depending on the market sentiment during the IPO period, we would expect the stock to be closer to one end of this spectrum.
  • Risk. The company/underwriter identifies many risks, most notably competitive risks. Others mentioned include those linked to branding, events risk, Brexit (since they have 29 in UK), and economic risks.

5. IVD Medical (華檢醫療) Trading Update – Concentrated Shareholding, Tiny Adjusted Free-Float

Top%20ten%20sharheoders

IVD Medical (1931 HK) raised US$131m at HK$3.07 per share, the bottom end of its IPO price range. We have previously covered the IPO in our note:

In this insight, we will update on the deal dynamics, implied valuation, and include a valuation sensitivity table.

Get Straight to the Source on Smartkarma

Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.