Issue 22
 

Malaysia’s Khazanah held talks to invest in SoftBank Vision Fund: Report


Malaysia’s sovereign wealth fund Khazanah Nasional Berhad may be looking to invest in SoftBank’s $100-billion Vision Fund after holding preliminary talks with the Japanese conglomerate, according to a report by Nikkei Asian Review. 

The report said that the talks between representatives of Khazanah and SoftBank were held in April, five months after Malaysian Prime Minister Mahathir Mohamad formally invited SoftBank chairman Masayoshi Son to join Khazanah as a director and adviser. Son turned down the offer, saying he wanted to focus solely on SoftBank. 

SoftBank is reportedly looking to raise an additional $15 billion for the Vision Fund, which is largely backed by the sovereign fund of Saudi Arabia. 

Since it was launched two years ago, the Vision Fund has so far invested around $70 billion in tech companies across the globe. Outside of Tokyo, Vision Fund has other offices in London and Silicon Valley. However, the massive fund is seen to be demonstrating an increased focus on the Asian market. 

DEALSTREETASIA recently reported that the Vision Fund is in advanced talks to open an office in China and expand its team in Singapore. Furthermore, the fund’s Asia director, Anna Lo, is also relocating from Silicon Valley to Singapore this year, she confirmed on LinkedIn recently. 

The Vision Fund has invested in a plethora of companies in Asia such as Hong Kong-based travel unicorn Klook, Chinese robotic startup Cloudminds; Chinese car trading platform Chehaoduo, and Delhivery, an Indian logistics startup. 

Its earlier portfolio companies in the region include Grab, OYO, Paytm and Tokopedia, among others.

 

From – Deal Street Asia

 

S Korea’s Samsung SDS to buy 25% stake in Vietnamese IT firm CMC


South Korea’s Samsung SDS, a system integration arm of Samsung Group, announced that it has signed a strategic partnership agreement with one of Vietnam’s leading IT services companies, CMC Corporation, to collaborate in the smart factory and cyber security sectors. 

It is understood that Samsung SDS pledged to buy 25 percent stake in CMC, to expand its business into the global IT services market. This investment follows the cooperation agreement in June 2018 for deploying joint business in smart factory and cyber security sectors. 

Under the agreement, Samsung SDS plans to work together with CMC’s engineers to enhance its global business competitiveness and actively participate in the global market including Southeast Asia. 

With around 3,000 employees, CMC is an IT services company in Vietnam and its main business is system integration (SI), software development, cloud and IT infrastructure management. The Hanoi-based IT corporation expects this investment to take it one step closer to its goal of achieving $1 billion in sales by 2023. 

“We have secured a strategic partner for business in Vietnam and Southeast Asia,” Samsung SDS CEO Hong Won-pyo said, adding the partnership will support global clients’ digital transformation. 

“CMC is now partnering with Samsung SDS, following AT&T, Oracle, SAP and Microsoft,” CMC Chairman and General Director Nguyen Trung Chinh said in a statement. “The strategic ties will hugely contribute to advancing the digital economy globally.” Founded in 1993, CMC engages in system integration, software service, telecommunication-Internet, and ICT products production and distribution in Vietnam and internationally. 

Currently, CMC concentrates all resources into 3 main business divisions: Technology & Solution, Global Business, and Telecommunications. CMC’s goal is to become a global corporation in providing digital transformation services.

 
From – Deal Street Asia
 


Thailand: Intouch plans to infuse over $6m into seven startups this year

Intouch Holdings, the parent company of Thailand’s largest mobile phone operator Advanced Info Service (AIS), has set aside a sum of 200 million baht ($6.33 million) to invest in seven startups this year, according to the company’s investor relations vice president Tomyantee Kongpoolsilp. 

The company is already conducting due diligence on four startups that might receive up to 125 million baht. “All four deals are set to close within this year. In addition to 200 million baht, we have around 1.8 billion baht in cash. Should we find more attractive deals, we are ready to invest,” she told local media. 

Intouch is focused on investing in telecom-media-technology (TMT), artificial intelligence, internet of things and blockchain data analytics. Intouch has injected the capital into startups via its corporate venture capital arm InVent, which has already invested around 540 million baht in 13 startups since it was set up in 2012. 

The startups it has invested included digital lifestyle platform Ookbee, restaurant review platform Wongnai, US-based advertising technology firm Social Nation and enterprise location-based application developer Ecartstudios. 

She cited that the value of its investment in its portfolio companies has surged over 100 per cent to 928 million baht. She added Intouch was also scouting acquisition opportunities in the TMT space. Previously, it had invested in High Shopping, a 51:49 joint venture between its subsidiary Intouch Media and Hyundai Home Shopping.

From – Deal Street Asia
 


Vietnam’s Vingroup acquires e-wallet platform MonPay

VinID Joint Stock Company, 80 per cent owned by Vietnamese business major Vingroup, has completed the acquisition of e-wallet platform MonPay, local media VnExpress reported. The portal cited confirmation from the State Bank of Vietnam (SBV) that VinID has completed the takeover procedure of MonPay, which is operated by People Care JSC. 

Financial details of the transaction, however, were not disclosed. The Vingroup’s spokesperson has not reverted to a query sent by DEALSTREETASIA. Early 2018, 4 months after receiving the operation license, People Care JSC launched e-wallet platform MonPay, officially marking a foray into Vietnam’s burgeoning e-payment market. VinID JSC, on the other hand, was established in July 2018. 

So far, it has chartered capital of VND 3 trillion ($128.8 million). VinID claims that it runs a customer care programme of its holding company Vingroup, and caters to customers using the company’s products and services such as shopping, consumption, relaxation, health and education, food and entertainment. Vingroup’s acquisition of MonPay comes in at a time when a plethora of e-payment applications have mushroomed in the country such as MoMo, Moca, Viettel Pay, Zalo Pay, AirPay, and ePay. 

Vietnam, which is experiencing a boom in mobile payments with people adopting e-wallets to pay for goods and services, is likely to see cashless payment grow to 50 per cent over the three years, according to MoMo CEO Pham Thanh Duc. This is leading to significant M&A activity in the market. 

Singapore’s sovereign wealth fund GIC in April reportedly led an investment in Vietnam-based payments firm VNPAY. The investment is upwards of $50 million, two of the executives had told DEALSTREETASIA. Earlier, e-wallet MoMo had raised a Series C funding round led by global private equity firm Warburg Pincus in January. 

While the financial terms remain undisclosed, a source familiar with the matter had said, the investment was in the region of $100 million, making it one of the largest single rounds ever raised by a Vietnamese startup. Vietnam has more than 40 payment companies but there is still no clear winner in sight. 

Local information technology and telecom companies, including Vietnam Posts and Telecommunications Group, Viettel and FPT, also introduced e-wallets and encouraged people to put away their cash.

 
From – Deal Street Asia
 


How Alibaba’s potential $20b HK listing is a brilliant derisking move

Alibaba Group Holding Ltd.’s potential plan to raise $20 billion in Hong Kong is huge. That’s not just because $20 billion is a lot of money. 

After going public in New York, the Chinese e-commerce giant is considering a secondary listing in Hong Kong, Bloomberg News reported on Monday – a coup for the city that’s still sore from missing out on the biggest IPO in history. 

It’s also a major boost to Beijing amid the trade spat. Having its pride and joy trade on a foreign bourse isn’t a good look these days. Investors will rightly start asking why China’s most-valuable company would want to do this. After all, it has plenty of money. Politics may be the most obvious consideration. 

By coming closer to home, Alibaba shows Beijing where its loyalties lie; and authorities can revel in what they see as an example of China’s growing power. You can just imagine the state-media editorials crowing about this evidence of the U.S.’s decline. 

Beijing isn’t the only consideration. Trading in Hong Kong would provide a buffer if its New York-listed shares fell victim to global anxiety about U.S.-China tensions. 

Hong Kong investors – and by virtue of Stock Connect, those on the mainland – are likely to remain more positive toward Alibaba, whose products they use every day. 

That could put a floor under the company’s American depositary receipts: Given the Hong Kong dollar’s peg with the greenback, any major deviation in share price would present arbitrage opportunities that hedge funds and day traders will quickly shut down. 

All this begs the question why Alibaba wouldn’t list directly on the mainland, given China is setting up a technology board aimed squarely at attracting tech stars. Quite simply, the A-share market wouldn’t be able to digest it. 

An IPO this size would be almost double the largest-ever domestic listing: the $10 billion Shanghai leg of Agricultural Bank of China Ltd.’s 2010 listing. And it’s more than just hanging out a shingle. 

While this IPO wouldn’t match the scale of shares trading in New York, a Hong Kong IPO would mean the amount of Alibaba ownership circulating in the city would be significant. Even on the corporate-finance front, there’s a lot Alibaba could do with an extra $20 billion. 

At $28 billion, it currently has the sixth-largest holdings of cash and equivalents in the world, if you exclude financial companies. That figure is a little misleading, though. If you account for current liabilities, then factor back in its free cash flow, Alibaba isn’t quite as rich as it seems: This is more cash than Alibaba is likely to self-generate in a year – even though it appears to be sitting on a lot of money – and would allow it to make some important purchases. 

Among the most obvious would be to buy back SoftBank Group Corp.’s stake in Alibaba, which is valued at around $12 billion. 

This would be a favor to Masayoshi Son, since SoftBank is trading at a massive discount to book value and has a ton of debt to service. Such a deal might include Alibaba becoming a cornerstone investor in Son’s forthcoming Softbank Vision Fund II. And there are plenty of unicorns to chase, notably in Southeast Asia. 

Rival Tencent Holdings Ltd. never far away from the hunt. Back home, food-delivery provider Meituan Dianping is giving Alibaba’s ele.me a run for its money – the war for takeout customers is one neither company would willingly surrender. 

So with plenty of good reasons for a Hong Kong IPO, it would be almost ridiculous for Alibaba not to do it.

From – Deal Street Asia
 
 All Rights Reserved 2019.

Vision Ventures Management Berhad, 
22-3a & 22-5, Menara Oval Damansara
+603 7733 4593

[References] [Disclosure]