TINGYI CAYMAN ISLANDS HLDGS CP ORDINARY (OTCMKTS:TCYMF) Sellers Strengthened By …

A Very Cheap Stub – Seeking Alpha” announced on March 20, 2015, “SoftBank Group Trades At A Considerable Discount To Its Portfolio – Rightfully …

TINGYI CAYMAN ISLANDS HLDGS CP ORDINARY (OTCMKTS:TCYMF) had an increase of its shares shorted by 203.8%. FINRA announced in January TCYMF’s total 840,000 shares shorted. The up change of 203.8% from 276,500 shares was reported.

$1.25 was the last price.It’s since January 12, 2018 and is 0.00% up. Cayman Islands Holding Corp the S&P 500 by 0.00%.

Tingyi Holding Corp., an investment holding company, makes and sells instant noodles, beverages, and instant food products in the PeopleÂ’s Republic of China.The company has $5.31 billion market cap. The firm operates through Instant Noodles, Beverages, Instant Food, and Others divisions.The P/E ratio is 16.89. It offers ready-to-drink teas, bottled water, juice drinks, carbonated drinks, sandwich crackers, egg rolls, cakes, and vitamin and milk drinks primarily under the Master Kong brand.

For more Tingyi (OTCMKTS:Cayman Islands Holding Corp) news announced briefly go to: Seekingalpha.com, Seekingalpha.com, Seekingalpha.com, Seekingalpha.com or Seekingalpha.com. The titles are as follows: “Wheelock & Co.: A Very Cheap Stub – Seeking Alpha” announced on March 20, 2015, “SoftBank Group Trades At A Considerable Discount To Its Portfolio – Rightfully So? – Seeking Alpha” on December 10, 2018, “Endeavour Mining: True Gold In Africa – Seeking Alpha” with a publish date: June 28, 2016, “The Pros And Cons To Investing In The North West Company – Seeking Alpha” and the last “Cellceutix: Empty Office, Unviable ‘Science’, Misleading Disclosures, 96% Downside – Seeking Alpha” with publication date: August 06, 2015.

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Matrix Partners China VA Filing. On Dec 4 David Su Published Form D.

Enter your email address below to receive a concise daily summary of the latest news and analysts’ ratings for Matrix Partners China V-A L.P. and …

Matrix Partners China V-A SEC Form D

The Cayman Islands-based Matrix Partners China V-A, L.P. filed $77.85 million amount financing. This is a new filing. $77.85 million was raised by the . The offering is still open.On 2018-12-04 The offering form was filed with total private financing amount of $77.85 million. Matrix Partners China V-A, L.P.’s clarification was: Total amounts include the amount of capital committed by the General Partner of the Issuer..

Matrix Partners China V-A is based in Cayman Islands. Pooled Investment Fund is the filler’s industry. David Su Director of General Partner of General Partner of Issuer filed the SEC form. The company was incorporated in 2018. The filler’s address is: C/O Maples Corporate Services Limited, Ugland House, P.O. Box 309, Grand Cayman, E9, Cayman Islands, Ky1-1104. David Su is the related person in the form and it has address: C/O Maples Corporate Services Limited, Ugland House, P.O. Box 309, Grand Cayman, E9, Cayman Islands, Ky1-1104. Here’s Matrix Partners China V-A ‘s Filing Link: 000175991918000001.

Matrix Partners China V-A Financing Details

The firms in the Pooled Investment Fund sector have average sell of 37.80 %. Matrix Partners China V-A reached 100.00 % of the fundraising. The avg investment size for the same sector is $24.76 million.Matrix Partners China V-A had minimum investment offering of $0.

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Matrix Partners China VA Filing. David Su Submitted Dec 4 Form D

The Cayman Islands-based Matrix Partners China V-A, L.P. released D Form regarding $77.85 million offering. This is a new filing. The raised $77.85 …

Matrix Partners China V-A Form D

The Cayman Islands-based Matrix Partners China V-A, L.P. released D Form regarding $77.85 million offering. This is a new filing. The raised $77.85 million. The offering is still open. The total private offering amount amount was $77.85 million. The offering filing was filed on 2018-12-04. Matrix Partners China V-A, L.P.’s clarification was: Total amounts include the amount of capital committed by the General Partner of the Issuer..

Matrix Partners China V-A is based in Cayman Islands. The filler’s business is Pooled Investment Fund. The SEC form was submitted by David Su Director of General Partner of General Partner of Issuer. The company was incorporated in 2018. The filler’s address is: C/O Maples Corporate Services Limited, Ugland House, P.O. Box 309, Grand Cayman, E9, Cayman Islands, Ky1-1104. David Su is the related person in the form and it has address: C/O Maples Corporate Services Limited, Ugland House, P.O. Box 309, Grand Cayman, E9, Cayman Islands, Ky1-1104. Link to Matrix Partners China V-A Filing: 000175991918000001.

Analysis of Matrix Partners China V-A Offering

On average, startups in the Pooled Investment Fund sector, sell 37.80 % pooled investment interest. Matrix Partners China V-A sold 100.00 % of the offering. The average offering size is $24.76 million for companies in the Pooled Investment Fund industry sector. The minimum investment for Matrix Partners China V-A ‘s offering was $0.

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Aqr Style Premia Pm Master Account Filing. On Nov 8 WILLIAM FENRICH Published SEC Form.

Aqr Capital Management, Llc is the related person in the form and it has address: Two Greenwich Plaza, Greenwich, Ct, Connecticut, 06830.

Aqr Style Premia Pm Master Account SEC Form D

The Cayman Islands-based Aqr Style Premia Pm Master Account, L.P. released $12.00 million amount financing. The date of first sale was 2015-06-23. $12.00 million was raised by the Limited Partnership. The offering is still open.On 2018-11-08 The offering form was filed with total private financing amount of $12.00 million. Aqr Style Premia Pm Master Account, L.P.’s clarification was: The investment manager (or its affiliate) is entitled to receive an annual management fee in an amount equal to a specified percentage of assets under management..

Aqr Style Premia Pm Master Account is based in Cayman Islands. Pooled Investment Fund is the firm’s industry. WILLIAM FENRICH AUTHORIZED SIGNATORY filed the form. The company was incorporated in 2015. The filler’s address is: C/O Ogier Global (Cayman) Limited, 89 Nexus Way, Camana Bay, Grand Cayman, E9, Cayman Islands, Ky1-9009. Aqr Capital Management, Llc is the related person in the form and it has address: Two Greenwich Plaza, Greenwich, Ct, Connecticut, 06830. Here’s Aqr Style Premia Pm Master Account ‘s Filing Link: 000140508618000232.

Aqr Style Premia Pm Master Account Financing Details

The companies in the Pooled Investment Fund sector have average sell of 37.80 %. Aqr Style Premia Pm Master Account reached 100.00 % of the fundraising. The avg offering amount for the same sector is $24.76 million.In comparison with Pooled Investment Fund sector’s average the total increased amount is 51.52 % smaller.

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Buffett’s Stock Pick: StoneCo IPO Shows 74% Y/Y Revenue Growth

StoneCo provides financial technology solutions helping merchants and partners execute transactions online and through mobile channels.

With Warren Buffett buying shares of StoneCo (STNE) and revenue growth and profitability at the net income level, the company seems a very interesting name. StoneCo does not seem very cheap compared to other peers operating in Brazil. But if revenue growth and net income keep increasing, the company is a clear buy.

Source: Prospectus

Some of the best people on Wall Street are working on this deal. It will retain the interest of many investors:

Source: Prospectus

Business

Incorporated in The Cayman Islands and headquartered in São Paulo, Brazil, StoneCo provides financial technology solutions helping merchants and partners execute transactions online and through mobile channels.

Source: Prospectus

With a business model that combines different solutions with a cloud-based technology platform, an integrated distribution approach and on-demand customer service, StoneCo has revealed itself as completely disruptive. Despite launching only four years ago, the Nilson Report notes that StoneCo is the largest independent merchant acquirer in Brazil.

With over 200,000 active clients of different sizes, the company’s ambitious and target market seems large. It is targeting a market of 8.8 million small-and-medium-sized businesses in Brazil. Additionally, as of June 2018 the company provides solutions to over 95 integrated partners including global payment service providers, digital marketplaces among others. They use StoneCo’s technology embedded into their own system. Thanks to these two channels, the company has seen how its key performance indicators performed astonishingly.

The total payment volume (“TPV”) in the three months ended September 30, 2018 was 83.7% more than that in the same period in 2017. Additionally, the TPV for the nine months ended September 30, 2018, equal to R$56.8 billion, represented 70.9% increase compared to that of September 30, 2017.

The number of active clients is also growing at a high pace. The number of active clients in Q2 2018 was equal to 0.2 million, 216% more than in Q2 2016.

The images below show the increase in active clients and TPV in the last nine quarters:

Source: Prospectus

Market Size: A Lot Is To Be Done

Brazil represents a market that is growing at fast pace. Statista notes that retail e-commerce sales are expected to reach $31.664 billion in 2022, 89% more than in 2016. The image below provides further details on this matter:

Source: Statista

With that, StoneCo believes that a lot is to be done since the penetration of electronic payments is significant compared to other developed markets. The World Bank and ABECS note that electronic payments volume was equal to only 28.4% of the total consumption in Brazil in 2016. There seems to be significant growth for improvement. Keep in mind that this figure in the United States is equal to 46.0%. That’s not all. The World Bank also reports that only 17.6% Brazilians make payment through the internet. This number is quite low compared to the same stat in the United States, which is 77.2%.

The company seems very well positioned to capitalize on these new technological changes. It has the technology in place, which clients seem to get to know right now. The business growth shows this fact. With this in mind, it seems to be an interesting time to jump into this market.

Balance Sheet

With an asset/liability ratio of 1.11x, the company’s financial shape seems stable. However, investors will need to check the company’s working capital very closely, which seems to be large. As of June 30, 2018, the account receivables is equal to $1.511 billion, which represents 82% of the total amount of assets. This means that the company is getting paid a bit late. Additionally, the amount of account payables, equal to $1.025 billion, represents 62% of the total amount of liabilities, which shows that StoneCo is paying a bit late too. With that, the company is paying suppliers at a faster rate than the rate at which it is paid. It is not an issue right now, but it is a feature to be supervised closely. In order to finance its working capital, StoneCo received money by signing obligations that are worth $0.533 billion as of June 30, 2018. The image below provides balance sheet as reported in the prospectus:

Source: Prospectus

As of today, StoneCo should not have liquidity issues. According to the list of contractual obligations, the company will need to pay the senior debt in one to three years. If the company raises capital to repay debt, the stock dilution risk could push the share price down. Investors should remember this date. The contractual obligations are shown below. The numbers are given in the currency of Brazil:

Source: Prospectus

74% y/y Revenue Growth

The revenue growth is astonishing. In 2017, the company reported $198.8 million, 74% more than that of 2016. The net income is not positive. In 2017, it was equal to -$27.2 million. The cost of services, equal to $58.1 million, and financial expenses of $61 million seem too large. With that, if the company keeps growing revenues at this level, growth investors will not really care about the net income losses in 2017. The market should study revenue growth very carefully in the next quarters. If it continues to grow at the same level, the share price should go higher.

Source: Prospectus

Investors may also check the figures reported in the six months ended June 30, 2018. The net income reported was positive, $22.7 million, which is beneficial. If the net income is positive in 2018, growth investors should not be the only ones appreciating this name. Value investors will also commence assessing the figures reported by StoneCo.

Use Of Proceeds

The company will use the proceeds for general corporate purposes. The prospectus reads that the company may use the money for mergers. However, M&A activity does not seem likely in this case. Keep in mind that the company is growing organically. In this case, StoneCo seems more likely to finance its working capital with the money received from the IPO. Additionally, it is expected that the company will use some money to repurchase shares from a shareholder. Some investors will not appreciate this feature. The image below provides further details:

Source: Prospectus

Share Classes And Valuation

The image below shows the capitalization expected after the IPO. It is beneficial that the company will not use the proceeds to pay debt. The total amount of debt will remain $534.3 million. Take a look at it:



Source: Prospectus

The company expects to have two types of shares, class A and class B shares. StoneCo is selling class A shares, which hold one vote. Class B shareholders have the right to 10 votes. This is not unusual. Most investors will not appreciate it. The lines below provide further details:

“Class A common shares and our Class B common shares. The rights of the holders of Class A common shares and Class B common shares will be identical, except with respect to voting, conversion and transfer restrictions applicable to the Class B common shares. Each Class A common share will be entitled to one vote. Each Class B common share will be entitled to 10 votes and will be convertible into one Class A common share automatically upon transfer, subject to certain exceptions. Holders of Class A common shares and Class B common shares will vote together as a single class on all matters unless otherwise required by law.” Source: Prospectus

In total, after the IPO, there will be 268.062 million shares. At $22 per share, the total market capitalization will be 5.897 billion. Adding debt of $0.534 billion and deducting $852.8 million in cash from the IPO and $91 million in cash in June 2018, the enterprise value is expected to be $5.487 billion. With revenues of $164 million in the six months ended June 30, 2018, forward revenues of $328 million for the year 2018 seem reasonable. With this figure in mind, the company is selling shares at 16.72x forward sales.

The lines below provide information about the competitors of StoneCo:

Source: Prospectus

Competitors like First Data Corporation (FDC) and Global Payments Inc. (GPN) seem too large and too diversified to be comparable to StoneCo. PagSeguro Digital seems to be the best peer to assess the valuation of StoneCo. PagSeguro Digital Ltd. (PAGS), which also operates in Brazil, with an enterprise value of $7.78 billion, trades at 6.85x sales. Its net income in 2014 seemed similar to that of StoneCo right now. If StoneCo is able to increase its net income to the level of PAGS as of today, its capitalization should increase.

Source: Seeking Alpha

PAGS seems to be growing revenues at a higher pace than StoneCo. Total revenues were equal to $326 million and $790 million in 2016 and 2017 respectively. Additionally, PAGS has no debt. It makes sense that the market capitalization of PAGS is larger than that of StoneCo. The image below provides further details:

Source: Seeking Alpha

StoneCo does not seem undervalued compared to PAGS. With that, both PAGS and StoneCo are growing at a high pace. Thus, it may be the same buying one or the other. Investors interested in getting exposure to this may acquire both to diversify. If revenues and net income keep growing at the same pace, the share price of both should increase.

Berkshire Hathaway Could Buy Shares

It is very interesting that Berkshire Hathaway A (BRK.A) could acquire approximately 13.712 million shares of StoneCo. Additionally, T. Rowe Price Group, Inc (TROW) and Madrone Opportunity Fund could acquire acquire large stakes in the company. The stock price could increase after the IPO as demand will increase after the market sees these shareholders.

Source: Prospectus

The Jurisdiction Will Be That Of The Cayman Islands

Investors should be aware of the fact that the jurisdiction is that of the The Cayman Islands. The assets are located in Brazil, but the company was incorporated in The Cayman Islands. The image below provides the business structure:

Source: Prospectus

As a result, the right of shareholders will not be that of the United States. The protection of shareholders is a bit less significant than that in the U.S. The lines below provide further details on this matter:

“We are a Cayman Islands exempted company with limited liability. The rights of our shareholders may be different from the rights of shareholders governed by the laws of U.S. jurisdictions” Source: Prospectus

Conclusion

StoneCo seems a very interesting opportunity for several reasons. First of all, the e-commerce brazilian market is large and is growing at a high pace. Additionally, StoneCo shows large revenue growth and profitability at the net income level in 2018. The company does not seem cheap compared to PAGS, but it seems a clear buy. Also, both are growing at a high pace. Finally, the fact that Warren Buffett is expected to buy shares is quite interesting. The demand for the stock could increase because of this reason.

Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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