Category

TMT/Internet

TMT: Gcl Poly Energy Holdings Limited, Link Administration, M Cash Integrasi PT and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • FTSE All-World/​​All-Cap Index Rebalance Preview: Some Big Changes in China
  • Merger Arb Mondays (04 Jul) – Link Admin, Ramsay, DTAC/True, Australian Unity Office Fund, Yashili
  • PT M Cash Integrasi Tbk – New Partnerships Bearing Fruits

FTSE All-World/​​All-Cap Index Rebalance Preview: Some Big Changes in China

By Brian Freitas

  • The price review period for the FTSE All-World/All-Cap September 2022 SAIR ended on 30 June. The changes are expected to be announced on 19 August and implemented on 19 September.
  • There are a lot of potential inclusions to the indices for China -some changes are a result of stocks being included in Northbound Stock Connect.
  • Gcl Poly Energy Holdings Limited (3800 HK) is the largest potential inclusion (in terms of passive flow) in the index following resumption of trading in November 2021.

Merger Arb Mondays (04 Jul) – Link Admin, Ramsay, DTAC/True, Australian Unity Office Fund, Yashili

By Arun George


PT M Cash Integrasi Tbk – New Partnerships Bearing Fruits

By SCCM Asia Research

  • 1Q22 saw robust performances: Revenue was -7.4% YoY to IDR3,044bn in 1Q22, largely driven by -67% YoY decline in digital products & services (on the flip side, this segment saw 2pp expansion in GPM).
  • Streamlining top-line estimates: We revised down our revenue estimates slightly by -0.5%/-2%/-4% to IDR15,044bn/IDR17,198bn/IDR19,135bn in FY22E/23E/24E, due to downward revisions for digital products and cloud advertising segments, offset by upward revisions for SaaS, Clean Energy, and the additional revenue streams from latest partnerships (E-wholesale, Audio Visual, and Content & Entertainment).
  • Improving PATMI margins from FY22-24E: Our PATMI margin estimates have mostly remained the same and on upward trends at 0.3%/0.5%/0.7% (prior: 0.3%/0.4%/0.7%) in FY22E/23E/24E, respectively, as MCAS leverages on its dist.

Before it’s here, it’s on Smartkarma

TMT: Gcl Poly Energy Holdings Limited, Viva Republica, Dunamu, Tencent, Yanolja and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Index Rebalance & ETF Flow Recap: FTSE JP, HSTECH, HSCEI, PCOMP, GCL Tech, Tencent, Tianqi Lithium
  • Viva Republica (Toss): A Fintech Giant in Korea
  • Dunamu: Operator of Upbit – The Number One Cryptocurrency Exchange in Korea
  • Last Week in Event SPACE: Prosus/Naspers, Link Admin, Bank of Kyoto, Tassel, Toshiba
  • Yanolja: Largest Travel App in Korea & Second Largest Property Management SaaS Provider Globally
  • ECM Weekly (3rd Jul 2022) – Tianqi, Thai Life, Prosus/Naspers, Tencent, SEA, Soosan, SoCar, Carsales

Index Rebalance & ETF Flow Recap: FTSE JP, HSTECH, HSCEI, PCOMP, GCL Tech, Tencent, Tianqi Lithium

By Brian Freitas


Viva Republica (Toss): A Fintech Giant in Korea

By Douglas Kim

  • Viva Republica (Toss) is one of the biggest fintech companies in Korea. Toss provides bundled fintech services including payments, banking, securities, and insurance. 
  • In late June 2022, Viva Republica reported that it received Series G funding with 500 billion won in new investments, valuing the company at 9.0 trillion won or more.
  • From 2018 to 2021, the company’s sales increased by 142% CAGR. Operating margin improved significantly from -97.2% in 2019 to -18.6% in 2020 but worsened slightly to -23% in 2021. 

Dunamu: Operator of Upbit – The Number One Cryptocurrency Exchange in Korea

By Douglas Kim

  • Dunamu operates Upbit which is the largest cryptocurrency exchange in Korea. As of April 2022, Upbit had more than 70% market share in the cryptocurrency trading market in Korea.
  • Dunamu’s sales surged by 1996% to 3.7 trillion won in 2021 and operating profit surged from 86.6 billion won in 2020 to 3.3 trillion won in 2021.
  • In January 2022, Dunamu was last valued Dunamu at nearly 15 trillion won. However, due to major decline in crypto prices in 2022, Dunamu’s valuation has declined significantly. 

Last Week in Event SPACE: Prosus/Naspers, Link Admin, Bank of Kyoto, Tassel, Toshiba

By David Blennerhassett

  • Prosus (PRX NA) selling its JD.com (9618 HK) shares was expected. The beginning of an open-ended share repurchase programme of Prosus and Naspers (NPN SJ) shares was a welcome surprise.
  • Dye & Durham has reduced its Offer price for Link Administration (LNK AU) to $4.30/share, down from $5.50/share. It still may get board support.
  • A 40-45% discount is about the narrowest Bank of Kyoto (8369 JP) should get to. For that, there is probably 15-20% upside. But like all holdco trades, trade the range.

Yanolja: Largest Travel App in Korea & Second Largest Property Management SaaS Provider Globally

By Douglas Kim

  • Yanolja is the largest travel app in Korea and it is also considered to be the second largest property management software provider in the world after Oracle.
  • In July 2021, Softbank Group Corp’s Vision Fund II agreed to invest $1.7 billion in Yanolja, for a 25% stake in the company.
  • Yanoljia is a well known app for booking hotels in Korea. The company’s business model has expanded to providing property management software products and services.

ECM Weekly (3rd Jul 2022) – Tianqi, Thai Life, Prosus/Naspers, Tencent, SEA, Soosan, SoCar, Carsales

By Sumeet Singh

  • Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
  • There was a marked pickup in IPO activity with a number of smaller deals, along with two large deals being launched.
  • There were no major placements last week. In addition, Prosus single handedly took out two prospective large placements.

Before it’s here, it’s on Smartkarma

TMT: Prosus , Kurly Inc, Softbank Group, Qualtrics International and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Prosus: Finally, a Catalyst; Cash Flows, Capital Allocation, Should Limit Drop in Discount to NAV
  • Kurly: A Market Leader in Fresh Foods E-Commerce Market in Korea
  • Softbank Group – First Look at Q1 22 Performance
  • Qualtrics: Leading Pure-Play XM Provider. A Solid Risk-Reward Opportunity

Prosus: Finally, a Catalyst; Cash Flows, Capital Allocation, Should Limit Drop in Discount to NAV

By Wium Malan, CFA

  • Prosus (PRX NA)’s announced open-ended share repurchase programme, funded by on-market sale of its Tencent shares, is a significant positive catalyst to reduce its discount to NAV.
  • Continued operating losses will likely require funding through capital events, in the form of either asset sales or debt issuance.
  • Cash flow requirements and continued concerns around capital allocation should limit the reduction in the discount to NAV.

Kurly: A Market Leader in Fresh Foods E-Commerce Market in Korea

By Douglas Kim

  • Kurly is the number one player in Korea focusing on e-commerce of fresh foods. Kurly’s most recent valuation was about 4 trillion won in December 2021.
  • Coupang is trading at P/S and P/GP multiples of 1.2x and 7.4x (2021), respectively. Using these valuation multiples, Kurly’s valuation would be from 1.9 trillion won to 2.2 trillion won.
  • These valuations would represent nearly half of the 4 trillion won in private market valuation it received in December 2021.

Softbank Group – First Look at Q1 22 Performance

By Kirk Boodry

  • Vision Fund’s public portfolio lost $10bn in Q1 marking the third time in four quarters that valuation losses were in the tens of billions
  • Global tech weaness remains the main challenge as portfolio losses are matched with concerns on the private portfolio, especially ARM
  • And worries about ARM also feed into leverage concerns as Softbank’s QoQ decline in reported LTV was driven by an ARM upgrade.  Meanwhile, CDS prices are near all-time highs

Qualtrics: Leading Pure-Play XM Provider. A Solid Risk-Reward Opportunity

By Andrei Zakharov

  • Qualtrics International (XM US)  is the largest XM provider and pioneer in Experience Management. The company was founded in 2002 by Ryan Smith, Jared Smith, and their dad, Scott Smith.
  • In 2018, SAP acquired Qualtrics for ~$8B in an all-cash deal, one of the largest-ever acquisitions of a SaaS company.
  • We view Qualtrics International (XM US)  as well-positioned to continue to take market share with additional growth drivers such as new products and international expansion. 

Before it’s here, it’s on Smartkarma

TMT: Softbank Group, Shinko Electric Industries, LG Energy Solution, Tencent, Bukalapak, Hang Seng China Enterprises Index, Xiaomi Corp, Pure Storage Inc and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Softbank Group – Expiration of SenseTime Lock-Up Has Lopped $1.5bn off the VF Valuation
  • JPX-Nikkei 400 2022 Rebal: Final Predictions
  • End of Mandatory Lock-Up Periods for 40 Companies in Korea in July 2022
  • Tencent Bear Case for New Lows
  • Tencent: End of Another Quarter with No New Game Approval and Prosus Selling
  • Bukalapak (BUKA IJ) – Track the Execution Not the Headlines
  • HSCEI Index Rebalance: Bilibili Replaces Sunac Next Week
  • Hang Seng Index Constituents 30th June 2022
  • Pure Storage (PSTG): Market Leader Facing Commoditization of Its Products

Softbank Group – Expiration of SenseTime Lock-Up Has Lopped $1.5bn off the VF Valuation

By Kirk Boodry

  • Just as the December quarter was flattered by the last minute IPO of SenseTime Group (20 HK), expiration of the lockup six months later has delivered a corresonding valuation hit
  • Vision Fund is still up on that investment but the public portfolio is flirting with a $10bn loss for the quarter depending on how US shares trade later
  • The discount has improved modestly to 49% from 51% but remains at the high end of the recent range as worries on tech valuations cast a long shadow 

JPX-Nikkei 400 2022 Rebal: Final Predictions

By Janaghan Jeyakumar, CFA

  • JPX-Nikkei 400 is composed of stocks listed on the Tokyo Stock Exchange selected based on multiple metrics relating to size, liquidity, financial performance, and corporate governance.
  • The annual rebalance of the JPX-Nikkei 400 Index takes place in August every year and the cut-off date for the data used for this rebalance is the end of June.
  • In this insight, we take a look at Quiddity’s final predictions for Potential ADDs/DELs for the August 2022 review.

End of Mandatory Lock-Up Periods for 40 Companies in Korea in July 2022

By Douglas Kim

  • We discuss end of the mandatory lock-up periods for 40 stocks in Korea in July 2022, among which 7 are in KOSPI and 33 are in KOSDAQ.
  • These 40 stocks on average could be subject to further selling pressures in July and could underperform relative to the market. 
  • Among these 40 stocks, LG Energy Solution (373220 KS) and Heung A Shipping (003280 KS) could face further selling pressures in the coming weeks.

Tencent Bear Case for New Lows

By Thomas Schroeder

  • Tencent exhibits a compelling bear case in the form of triangle slated to break down to press on macro 310 support. A wave 5 new low near 280/263 is targeted.
  • MACD turning down from macro resistance stand out as a compelling direction signal that aligns with the bearish triangle a-b-c bounce count.
  • This new low would (terminal wave 5 cycle trough) represent a macro buy entry to challenge the 420 macro bull/bear line.

Tencent: End of Another Quarter with No New Game Approval and Prosus Selling

By Shifara Samsudeen, ACMA, CGMA

  • Tencent’s share price is down 6.5% over the last five days as largest shareholder Prosus sais that it would sell down Tencent shares to fund the buyback of Prosus/Naspers shares.
  • Though Chinese regulators removed the ban on new game approval in April this year, none of Tencent’s new game titles received approvals in over the last two months.
  • Tencent’s 1Q2022 earnings were weak and we expect 2Q2022E earnings to further decelerate with resurgence of Covid cases in China alongside weak macroeconomy.

Bukalapak (BUKA IJ) – Track the Execution Not the Headlines

By Angus Mackintosh

  • Bukalapak (BUKA IJ) held its AGM this week, which effectively repeated the messages from its 1Q2022 results including guidance for FY2022 but there is more excitement beneath the headline numbers.
  • One key metric tracked by management is the contribution margin, which is moving towards positive territory put take rates will improve for both Mitra and through its specialty store strategy. 
  • AlloFresh has launched and is testing the offline line efficiencies before being applied to Mitra partners and AlloBank has also started its digital journey. Bukalapak looks cheap. 

HSCEI Index Rebalance: Bilibili Replaces Sunac Next Week

By Brian Freitas


Hang Seng Index Constituents 30th June 2022

By Untying The Gordian Knot

  • Hong Kong Stocks are more excited than the mainland about cutting the Quarantine period from 14 to 7 days.
  • The 25th Anniversary of the Hong Kong handover means more stability ahead of celebrations and trading dominated by position squaring.
  • Only Xiaomi shows signs of a breakout. It broke the downtrend from August 2021 with the inside days in the last two trading sessions. It looks like it will test the breakout and cover it next week.

Pure Storage (PSTG): Market Leader Facing Commoditization of Its Products

By Robert C Prather Jr

  • Enterprise storage hardware market faces numerous headwinds and increasing commoditization
  • STaaS is cannibalistic, facing increasing competition, and decelerated in the MRQ
  • Each of the last 2 quarters have seen some meaningful, non-recurring revenues lead to PSTG beating estimates

Before it’s here, it’s on Smartkarma

TMT: SenseTime Group, Prosus , SOCAR, Paypal Holdings and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • HSTECH Index Rebalance Preview (Sep): Free Float & Capping Changes To Drive Flows
  • StubWorld: Prosus & Naspers Gain On Buyback Funded By Tencent Share Sale
  • Socar IPO Valuation Analysis
  • PayPal Stock: Be Careful Of Looking At Price In Isolation

HSTECH Index Rebalance Preview (Sep): Free Float & Capping Changes To Drive Flows

By Brian Freitas

  • We do not expect any inclusions or exclusions for the Hang Seng Tech Index (HSTECH INDEX) at the September rebalance.
  • Float and capping changes will lead to a one-way turnover of 6.5% and that will result in a one-way trade of HK$4,913m.
  • SenseTime Group (20 HK) will have the largest buying flow due a potential increase in free float. The stock is also a potential inclusion to the HSCEI INDEX in September.

StubWorld: Prosus & Naspers Gain On Buyback Funded By Tencent Share Sale

By David Blennerhassett

  • It’s been a long-time coming. Prosus (PRX NA) and parent Naspers (NPN SJ) will gradually sell down their stake in Tencent (700 HK) to fund a share purchase program.
  • Preceding my comments on Prosus and Naspers, are the current setup/unwind tables for Asia-Pacific Holdcos. 
  • These relationships trade with a minimum liquidity of US$1mn, and a % of market capitalisation greater than 20%.

Socar IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of Socar is target price of 27,967 won, which is 18% lower than the low end of the IPO price range of 34,000 won.
  • Given the lack of upside, we would Pass on this IPO. Our valuation is also 23% lower than the valuation that Lotte Rental paid for its 13.9% stake in Socar.
  • We estimate Socar to generate sales of 396.4 billion won (up 37.2% YoY) and EBITDA margins of 12.6% in 2022. 

PayPal Stock: Be Careful Of Looking At Price In Isolation

By Pearl Gray Equity and Research

  • Business unit growth is slowing down after two years of exponential transaction growth.
  • High-yield debt is in bad shape considering the economy, according to a quantitative risk analysis.
  • PayPal owns a few promising subsidiaries. Yet, it could be a while before they provide significant value, says analyst.

Before it’s here, it’s on Smartkarma

TMT: Tencent, Prosus , JMDC Inc, Link Administration, Carsales.Com Ltd, Sungeel Hitech, Sea Ltd and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • Prosus, Tencent, JD.com – Good Intentions but Questionable Timing
  • Prosus/Naspers – Operation Ouroboros Commences, And It’s Big (Discount, Flows, Index Impact)
  • FTSE GEIS Sep 2022 Index Rebalance Preview: Japan
  • Link Admin: Dye & Durham’s Cuts Bid Price
  • Link’s Lower Offer of A$4.30 from DND Fails to Excite
  • Carsales Entitlement Offer – Well Flagged Deal for a Well Know Asset, but Last Deal Didn’t Do Well
  • Sungeel HiTech IPO Valuation Analysis
  • Tencent (700 HK): Impact of Prosus Selling & Passive Inflows
  • SEA Lock-Up – Tencent Is once Again About to Be Free to Trim Its US$8bn Stake

Prosus, Tencent, JD.com – Good Intentions but Questionable Timing

By Sumeet Singh

  • Today Prosus announced that it will begin an open-ended share repurchase programme of Prosus and Naspers shares which will be funded by on-market sale of Tencent shares.
  • Prosus also announced that it has sold its entire shareholding in JD.com, to raise US$3.67bn, on-market in Jun 2022.
  • In this note, we talk about the implication and timing of today’s announcements.

Prosus/Naspers – Operation Ouroboros Commences, And It’s Big (Discount, Flows, Index Impact)

By Travis Lundy

  • I wanted to write this insight over the weekend but could not finish it, but now there is new news to warrant it. 
  • Today, Prosus (PRX NA)  announced it had sold the 131,873,028 JD.com Inc. (9618 HK) shares it received in the Tencent (700 HK) distribution. This is as expected. Proceeds were US$3.67bn.
  • Also announced this morning is “the beginning of an open-ended share repurchase programme of Prosus and Naspers (NPN SJ) shares.” The details are the key to everything

FTSE GEIS Sep 2022 Index Rebalance Preview: Japan

By Brian Freitas

  • The FTSE Russell September 2022 SAIR will use closing prices from 30 June to calculate the market cap cut-offs to determine the inclusions and exclusions for the All-World/All-Cap indices.
  • We see 1 add for the All-World Index and 5 for the All-Cap Index. We see 3 stocks moving from All-Cap to All-World and 5 stocks moving the other way.
  • There are other stocks that are close adds, upweights, downweights and deletes and price moves over the next few days will determine their status.

Link Admin: Dye & Durham’s Cuts Bid Price

By David Blennerhassett

  • Dye & Durham (D&D) has reduced its Offer price for Link Administration (LNK AU) to $4.30/share, down from $5.50/share.
  • The revised offer followed the Australian Competition and Consumer Commission’s concerns that D&D’s acquisition of Link would lead to dominance in Australia’s conveyancing market.
  • To facilitate the new Offer, D&D said it is considering providing an undertaking to ACCC – presumably, but not stated, being the sale of its GlobalX business.

Link’s Lower Offer of A$4.30 from DND Fails to Excite

By Arun George

  • Dye & Durham/DND has proposed to lower its offer from A$5.50 to A$4.30 per share. The Link Administration (LNK AU) Board will provide shareholders with an update next week.
  • DND’s justification for a lower offer based on the potential undertaking to the ACCC and the current state of the financial markets smacks of opportunism.    
  • The proposed lower bid offers no premium to our valuation range or the undisturbed price. The Board should reject the lower offer and instead reignite interest from past suitors. 

Carsales Entitlement Offer – Well Flagged Deal for a Well Know Asset, but Last Deal Didn’t Do Well

By Sumeet Singh

  • Carsales aims to raise around US$835m (A$1.2bn) via a non-renounceable entitlement offer to part fund the purchase of remaining 51% of trader Interactive.
  • While the acquisition is probably well flagged and will be earnings accretive, the last entitlement offering didn’t do well in the near term.
  • In this note, we will talk about the deal dynamics and run the deal through our ECM framework.

Sungeel HiTech IPO Valuation Analysis

By Douglas Kim

  • Our base case valuation of Sungeel HiTech is target price of 70,992 won per share (49% higher than the high end of the IPO price).  
  • Our valuation is based on 15.9x P/E (50% discount to comps’ average multiple) using our estimated net profit of 54.9 billion won in 2023. 
  • Given the excellent upside, we have a Positive view of the Sungeel HiTech,  which is a leading recycling specialist in Korea that extracts valuable metals from lithium-ion secondary batteries.

Tencent (700 HK): Impact of Prosus Selling & Passive Inflows

By Brian Freitas

  • Prosus (PRX NA)/ Naspers (NPN SJ) hold 28.78% of Tencent (700 HK) and will be selling Tencent stock to fund their own buyback due to the large discount to NAV.
  • At 3-5% of Tencent (700 HK)‘s ADV, the selling will last from 9-15 years, though could take much longer (or not complete) if Prosus/Naspers’ discount to NAV shrinks considerably.
  • Passive trackers will buy only around 12-14% of the incremental stock and this will lead to a big overhang on Tencent (700 HK) in the near future.

SEA Lock-Up – Tencent Is once Again About to Be Free to Trim Its US$8bn Stake

By Sumeet Singh

  • Tencent sold US$3bn worth of SEA shares in Jan 22. The rest of its stake was locked up for six months.
  • The initial stake sale by Tencent didn’t go down too well and the stock is now trading over 63% below the deal price.
  • In this note, we will talk about the lock-up dynamics and recent updates.

Before it’s here, it’s on Smartkarma

TMT: Gcl Poly Energy Holdings Limited, Link Administration, Meituan, Epam Systems, Z Holdings, Money Forward, Accenture Plc Cl A and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • GCL Poly (3800 HK): Double Index Inclusion & HUGE Passive Inflows
  • Link Admin: Speculation Mounts that DND Will Revive the Deal with a Lower Offer
  • Meituan Push into Sell Resistance
  • Long Idea: EPAM Systems
  • Z Holdings (4689) | An Online Goldmine
  • Money Forward (3994 JP): Raising Our Rating to Buy. Cash Is King
  • Accenture – Good Performance; Macro Weakness Begins to Show up in Some Aspects

GCL Poly (3800 HK): Double Index Inclusion & HUGE Passive Inflows

By Brian Freitas

  • After being suspended for 7 months for not publishing its 2020 annual results, Gcl Poly Energy Holdings Limited (3800 HK) resumed trading on 1 November 2021.
  • We expect Gcl Poly Energy Holdings Limited (3800 HK) to be added to the MSCI China Index in August and to the FTSE All-World Index in September.
  • Passive index trackers will need to buy over US$1.1bn of stock over the next few months. The stock has run-up inline with peers and this demand could keep it supported.

Link Admin: Speculation Mounts that DND Will Revive the Deal with a Lower Offer

By Arun George

  • The AFR reports that after weeks of talk, Dye & Durham (DND) is expected to lob a revised lower proposal for Link Administration (LNK AU) as soon as this week.
  • Presumably, DND’s justification for a lower offer is to facilitate ACCC approval timelines. It remains to be seen if this is enough for the Board to recommend a lower offer. 
  • Tweaking the IE’s valuation range for the current peer multiples and PEXA Group (PXA AU) share price points to a Link valuation range of A$3.52-4.40 per share. 

Meituan Push into Sell Resistance

By Thomas Schroeder

  • Meituan is starting to show waning upside momentum as it near key resistance at 220/230 (sell or short zone) ahead of a harder pullback cycle that will be choppy initially.
  • Meituan has outperformed its peer group but due for a pullback. Price and RSI rising wedges are maturing and nearing a bearish inflection point to short (watch poor buy volume).
  • Tactical rally window in mid July with a better rally cycle slated for August head of a negative September.

Long Idea: EPAM Systems

By Aaron Gabin

  • EPAM is an IT Services firm that does high end software development for Fortune 2000 customers.
  • One of the great under the radar compounders of all time. Feb 2012 IPO-Feb 2022: ~27% revenue, earnings, FCF CAGR, 45% equity CAGR.
  • Core engineering talent historically in Ukraine, Belarus, and Russia, this is the overhang. We think great management team can navigate relocation and return to growth.

Z Holdings (4689) | An Online Goldmine

By Mark Chadwick

  • Z HD’s media business accounts for 80% of consolidated earnings.
  • We believe that the combination of Yahoo Japan and LINE is driving new synergies and growth opportunities.
  • We believe that the media business alone could justify an EV of ¥4.5t, way above ZHD’s current EV of ¥3.5t

Money Forward (3994 JP): Raising Our Rating to Buy. Cash Is King

By Mita Securities

  • Our new target price 4,000 yen; Raising our rating to Buy

  • We believe that market participants have become increasingly concerned about the sustainability of high growth for loss-making SaaS companies

  • We raise our 2Q (Mar-May) FY11/22 sales forecast from 5.102bn yen to 5.145bn yen (+28.8% YoY, company guidance median 4.912 bn yen)


Accenture – Good Performance; Macro Weakness Begins to Show up in Some Aspects

By Nirmal Bang

  • Consistent performance in 3QFY22: ACN’s revenue for 3QFY22 stood at US$16.16bn, an increase of 22% in USD terms and 27% in LC terms.
  • Five forces to be harnessed by clients: ACN believes that there are five forces that clients should harness over the next decade to drive growth.
  • These are total enterprise reinvention, talent, sustainability, metaverse continuum and the ongoing tech revolution.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


Before it’s here, it’s on Smartkarma

TMT: SOCAR Inc, Playtech Plc, SenseTime Group and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • SOCAR IPO: Another Absurd Valuation
  • TTB/Playtech: PUSU Deadline Looming
  • Last Week in Event SPACE: Toshiba, Hutch Tel, SenseTime, Giordano, DTAC/True, Toyo Const., ResApp

SOCAR IPO: Another Absurd Valuation

By Sanghyun Park

  • This IPO’s valuation is the trickiest among Korea’s recent IPOs. Whether all of these ten valuation peers have high enough business relevance to SOCAR is highly doubtful.
  • Whether SOCAR can evolve from a simple car sharing (or rental) operator to an in-vehicle software platform provider actually determines the success or failure of this IPO.
  • However, the IPO prospectus available to us lacks the evidence to favorably judge SOCAR’s growth potential. So, I will consider taking this IPO as conservatively as possible.

TTB/Playtech: PUSU Deadline Looming

By Jesus Rodriguez Aguilar

  • PUSU deadline for TTB (Gopher) has been extended until 15 July. Playtech states that this time will allow progress in additional negotiations. Talks are credible, but progress is at snail’s pace.
  • Taking comparables’ median 9x EV/Fwd EBITDA, fair value for Playtech would be 772p. TTB should offer close to 800p to entice the Honk Kong based shareholders who derailed Aristocrat’s offer.
  • I see the current valuation of Playtech as an attractive entry point, with the upside of a likely bid. Long PTEC LN.

Last Week in Event SPACE: Toshiba, Hutch Tel, SenseTime, Giordano, DTAC/True, Toyo Const., ResApp

By David Blennerhassett

  • There is a risk that the ¥7,000/share bid for Toshiba Corp (6502 JP) gets pulled/lowered in Round 2 because of due diligence, conditionality, market environment, etc.
  • Hutchison Telecommunications Hong Kong Holdings (215 HK)‘s share price was up 33% month to date, on triple the average daily volume. Then promptly sheds 23% on an even larger volume. 
  • Even if one assumes that Softbank, Baba, and Cornerstones won’t sell, there is still 45% of SenseTime Group (20 HK) of shares out, worth US$11bn, unlocking next week.

Before it’s here, it’s on Smartkarma

TMT: iShares MSCI South Korea Index Fund (ETF), Baozun, Z Holdings, SOCAR Inc and more

By | Daily Briefs, TMT/Internet

In today’s briefing:

  • MSCI Annual Market Classification Review: Korea Doesn’t Make It to the Watchlist
  • China E-Commerce Pair Trade: Long Bozun Short Huitongda
  • Z Holdings (4689) | The Expanding Opportunity in E-Commerce
  • Socar IPO Preview

MSCI Annual Market Classification Review: Korea Doesn’t Make It to the Watchlist

By Brian Freitas

  • MSCI had announced the results of the 2022 Global Market Accessibility Review earlier this month. Based on that, no changes were expected at the Market Classification Review.
  • Earlier this morning, MSCI announced the results of the Market Classification Review and there are no changes for Asia.
  • Korea has not been placed on the watchlist for an upgrade from Emerging to Developed Market. The earliest that Korea could be reclassified from EM to DM is now 2025.

China E-Commerce Pair Trade: Long Bozun Short Huitongda

By Oshadhi Kumarasiri

  • Chinese e-commerce is having a solid month with most names up 30% in June. Yet this seems more a dead-cat-bounce than a change in direction of the share price momentum.
  • While there’s plenty of additional downside to big e-commerce players in e-commerce, smaller ones such as Baozun Inc. (BZUN US) has limited down side with shares trading near 1.0x P/B multiple.   
  • Meanwhile Huitongda (9878 HK) is yet to experience the post IPO sell-off and trading at expensive multiples. This raises an opportunity for a Long Bozun Short Huitongda trade.

Z Holdings (4689) | The Expanding Opportunity in E-Commerce

By Mark Chadwick

  • Z Holdings has the best ecosystem in Japan with 30% top line growth over the past year
  • We think that Z HD can out grow the competition in E-Commerce this year by leveraging group synergies
  • Z HD has earmarked an aggressive ¥35b to grow its Commerce Business this year 

Socar IPO Preview

By Douglas Kim

  • Socar, the largest car sharing platform in Korea, is getting ready to complete its IPO in KOSPI. The IPO base case offering size is from $120 million to $159 million.
  • The IPO price range is from 34,000 won to 45,000 won. The expected market cap of the company is from 1.2 trillion won to 1.6 trillion won.
  • Book building for the institutional investors starts on 1 August. Mirae Asset Securities and Samsung Securities are the lead underwriters in this IPO. 

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