Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<div><a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOM IN)</a>  aims to raise US$1.1bn in its upcoming India IPO, which will be launched next week. This would be the largest listing in India from the technology sector.</div><div>Zomato operates a technology platform that provides services for restaurant partners, customers, and delivery partners. During FY20, Zomato recorded 41.5m average MAU and was one of the leading Food Services platforms in India, in terms of value of goods sold, according to RedSeer. As of 31 Dec 20, it had a presence in 526 Indian cities and had 350,174 active restaurant listings.</div><div>We have covered some aspects of the deal in our earlier notes  <a href="https://www.smartkarma.com/insights/zomato-pre-ipo-filings-lack-narrative-a-little-bit-of-history-helps" target="_blank" rel="noopener">Zomato Pre-IPO - Filings Lack Narrative, a Little Bit of History Helps </a>and <a href="https://www.smartkarma.com/insights/zomato-pre-ipo-food-delivery-revenue-was-probably-up-16x" target="_blank" rel="noopener">Zomato Pre-IPO - Food Delivery Revenue Was Probably up 16x.</a></div><div>In this note, we will undertake a peer comparison with its global peers and its main local peer.</div>

Zomato (ZOM IN)  aims to raise US$1.1bn in its upcoming India IPO, which will be launched next week. This would be the largest listing in India from the technology sector.Zomato operates a technology platform that provides services for restaurant partners, customers, and delivery partners. During FY20, Zomato recorded 41.5m average MAU and was one of the leading Food Services platforms in India, in terms of value of goods sold, according to RedSeer. As of 31 Dec 20, it had a presence in 526 Indian cities and had 350,174 active restaurant listings.We have covered some aspects of the deal in our earlier notes  Zomato Pre-IPO - Filings Lack Narrative, a Little Bit of History Helps and Zomato Pre-IPO - Food Delivery Revenue Was Probably up 16x.In this note, we will undertake a peer comparison with its global peers and its main local peer.

Zomato Pre-IPO - Peer Comparison - Listed and Domestic

Daojia Limited (DL), one of the largest one-stop home services platforms in China, aims to raise at least US$300m in its US IPO, which now may or may not happen. The company is backed by 58.com and Baba.DL operates Swan Daojia, a platform where it offers multiple services across categories such as maternity nurse, nanny, housekeeping services, along with training services and SaaS-based solutions.

Daojia Limited (DL), one of the largest one-stop home services platforms in China, aims to raise at least US$300m in its US IPO, which now may or may not happen. The company is backed by 58.com and Baba.DL operates Swan Daojia, a platform where it offers multiple services across categories such as maternity nurse, nanny, housekeeping services, along with training services and SaaS-based solutions.

Daojia Pre-IPO - Can’t Pinpoint the True Growth

Global TMT analyst with Asia ex-Japan focus.

Mitchell Kim

Equity Bottom-Up

Coupang's share price is 14% above its IPO price of USD35 but it is down 21% from the peak closing price on 15 March.  Since the IPO, the company has weathered through the deteriorating public support over the death of an overworked logistics center employee and the public ire over the death of a firefighter in the fire at Coupang's logistics center in June.  Added to this, The Korea Fair Trade Commission (KFTC) investigated  <a href="https://www.smartkarma.com/entities/coupang" target="_blank" data-smartkarma-citation="entities:28425:1" rel="noopener">Coupang (CPNG US)</a> for possible violation of the Korean Fair Trade Law last week. KFTC is accusing Coupang has manipulated its search algorithm to prioritize its private-label items at the top of the search results, while placing other products in the lower-tiered areas at the bottom.   Moreover, Coupang is also accused of leveraging its dominance to demand the lowest pricing from suppliers and penalizing those suppliers who resisted preferential pricing over those provided to other platforms.   I was cautious on the stock pre-IPO (see my pre-IPO thoughts in <a href="https://www.smartkarma.com/insights/coupang-cpng-us-going-mano-e-mano-with-jd-com" target="_blank" data-smartkarma-citation="insights:49065" rel="noopener">Coupang (CPNG US): Going Mano E Mano with JD.com</a> and my view on 1Q21 results in <a href="https://www.smartkarma.com/insights/coupang-cpng-us-crack-in-the-armor" target="_blank" data-smartkarma-citation="insights:51455" rel="noopener">Coupang (CPNG US): Crack in the Armor</a>) as its valuations appeared expensive.  I remain a bear on the stock as I am concerned about the risk of operational disappointment, and the company's risky global ambition. Eroding public sentiment on the company and the rising regulatory risks further increases risk premium on the stock, in my view. One of the benefits of owning Coupang for investors was risk diversification from the Chinese Internet platforms currently facing their own intense regulatory restrictions.  However, increasing regulatory risk neutralizes this benefit, in my view.

Coupang's share price is 14% above its IPO price of USD35 but it is down 21% from the peak closing price on 15 March.  Since the IPO, the company has weathered through the deteriorating public support over the death of an overworked logistics center employee and the public ire over the death of a firefighter in the fire at Coupang's logistics center in June.  Added to this, The Korea Fair Trade Commission (KFTC) investigated  Coupang (CPNG US) for possible violation of the Korean Fair Trade Law last week. KFTC is accusing Coupang has manipulated its search algorithm to prioritize its private-label items at the top of the search results, while placing other products in the lower-tiered areas at the bottom.   Moreover, Coupang is also accused of leveraging its dominance to demand the lowest pricing from suppliers and penalizing those suppliers who resisted preferential pricing over those provided to other platforms.   I was cautious on the stock pre-IPO (see my pre-IPO thoughts in Coupang (CPNG US): Going Mano E Mano with JD.com and my view on 1Q21 results in Coupang (CPNG US): Crack in the Armor) as its valuations appeared expensive.  I remain a bear on the stock as I am concerned about the risk of operational disappointment, and the company's risky global ambition. Eroding public sentiment on the company and the rising regulatory risks further increases risk premium on the stock, in my view. One of the benefits of owning Coupang for investors was risk diversification from the Chinese Internet platforms currently facing their own intense regulatory restrictions.  However, increasing regulatory risk neutralizes this benefit, in my view.       

Coupang (CPNG US): Under the Regulator's Microscope

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

On 6 July 2020, <a href="https://www.smartkarma.com/entities/sina-corp-china" target="_blank" data-smartkarma-citation="entities:22691:1" rel="noopener">Sina Corp (Class A) (SINA US)</a> made an <a href="http://ir.sina.com/index.php/static-files/69e95aee-2729-457f-be56-73628090b8ea" target="_blank" rel="noopener">announcement</a> they had received a preliminary non-binding “going private” proposal from New Wave MMXV - a company controlled by its chairman and CEO Charles Chao. The bid was US$41/share. The GlobalTimes had an <a href="https://www.globaltimes.cn/content/1202472.shtml" target="_blank" rel="noopener">article</a> where sources opined Sina would "go home" to list in HK or on the STAR Market. This was followed by an <a href="http://ir.sina.com/static-files/de1ddd0f-354f-42de-9b33-b1bc414ab1b4" target="_blank" rel="noopener">Agreement and Plan of Merger</a> pursuant to which New Wave would acquire all of outstanding ordinary shares not owned at US$43.30/share. Shareholders approved the merger on <a href="http://ir.sina.com/static-files/ea4a5614-30e8-472c-895c-31e120de3261" target="_blank" rel="noopener">23 December</a> 2020.The importance of Sina Corp was that it owned a very large stake in China's premier micro-blogging (twitter-equivalent) service, operated by <a href="https://www.smartkarma.com/entities/weibo-corp-adr" target="_blank" data-smartkarma-citation="entities:3826:1" rel="noopener">Weibo Corp (Adr) (WB US)</a>. Prior to that EGM, according to <a href="https://www.smartkarma.com/profiles/david-blennerhassett" target="_blank" data-smartkarma-citation="accounts:840" rel="noopener">David Blennerhassett</a>'s excellent write-ups of the deal in <a href="https://www.smartkarma.com/insights/sina-corp-management-buyout-offer" target="_blank" data-smartkarma-citation="insights:41035" rel="noopener">Sina Corp: Management Buyout Offer</a>, and <a href="https://www.smartkarma.com/insights/what-s-going-on-with-sina-corp" target="_blank" data-smartkarma-citation="insights:48344" rel="noopener">What's Going On With Sina Corp?</a> (along with a fabulous initial cut at dissenters' appraisal rights for Chinese companies coming home in <a href="https://www.smartkarma.com/insights/sina-corp-appraisal-rights-and-fair-value" target="_blank" data-smartkarma-citation="insights:41068" rel="noopener">Homecoming For Chinese Companies: Appraisal Rights &amp; Fair Value</a>), Sina had intended to issue written notices of authorization to objecting shareholders (prior to the EGM, <a href="http://ir.sina.com/static-files/722deb54-0426-4b43-a58a-1c8be8b59b61" target="_blank" rel="noopener">21.5mn shares or 35.9%</a> of the outstanding shares of Sina issued notices of objections to the company). The dissenting total was quite high, and could have been a reason for Charles Chao to walk away from the deal, but despite the "requirement" to issue authorization notices by early Feb, there was no public acknowledgment of the situation by SINA until 22 March when the company issued a <a href="https://www.prnewswire.com/news-releases/sina-announces-completion-of-merger-301253197.html" target="_blank" rel="noopener">press release</a> saying the merger had been completed.So that was done.Back in February, the Hong Kong capital markets world was atwitter (woefully bad pun intended) with the news (<a href="https://www.bloomberg.com/news/articles/2021-02-18/china-s-twitter-like-weibo-said-to-plan-hong-kong-second-listing" target="_blank" rel="noopener">Bloomberg</a>, <a href="https://www.reuters.com/world/china/chinas-weibo-hires-banks-hong-kong-secondary-listing-sources-say-2021-02-23/" target="_blank" rel="noopener">Reuters</a>, that <a href="https://www.smartkarma.com/entities/weibo-corp-adr" target="_blank" data-smartkarma-citation="entities:3826:1" rel="noopener">Weibo Corp (Adr) (WB US)</a>, China's largest micro-blogging service (China twitter) intended to launch a secondary offering in Hong Kong, like many other US ADR-listed Chinese companies, and had hired banks (GS, CLSA, CS) to do so. But since then, there has been no follow-up news. <h2>But There is Now NEW "News"... Which is Not Yet News</h2>Late in the Asia evening on 6 July 2021, Reuters had an <a href="https://www.reuters.com/technology/exclusive-weibo-chairman-state-firm-plan-take-chinas-twitter-private-sources-2021-07-06/" target="_blank" rel="noopener">EXCLUSIVE</a> which said Weibo chairman Charles Chao - with 45% of shares out but 71% of voting rights - would team up with an as-yet unnamed Shanghai-based state firm to take the company private. One goal would be to get <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a> out of their 30% stake. Two sources told Reuters the consortium plans to offer $90-100/share.<section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/217/007/original/Screenshot+2021-07-06+at+8.35.37+PM.png?1625574980" class="editor-image img-responsive" data-smartkarma-image-id="217007"></figure></section>As I wrote that sentence, the shares were indicated +30% at just over US$71/share. My first thought was that the shares would trade "wide" to these early-reported terms as there are political considerations (will the State Council appreciate that a regional SASAC puts up money to buy out an internet firm?), questions about where BABA would agree to sell, timeline, and questions about what Charles Chao and the unnamed Shanghai entity would do if materially all the minorities dissented.As I finish that paragraph, Bloomberg appears to have reached a <a href="https://www.smartkarma.com/entities/weibo-corp-adr" target="_blank" data-smartkarma-citation="entities:3826:1" rel="noopener">Weibo Corp (Adr) (WB US)</a> spokesperson who says that this rumour is not true. And a while later, we have a Weibo release which offers a pretty strong denial. <section class="figure"><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/217/010/original/Screenshot+2021-07-06+at+9.39.13+PM.png?1625578767" class="editor-image img-responsive" data-smartkarma-image-id="217010"></figure></section>Of course, that doesn't mean it isn't true. It just means that it isn't true for public consumption yet.But it is a big interesting situation so we take a closer look at the parameters! And the shares opened up 10%.

On 6 July 2020, Sina Corp (Class A) (SINA US) made an announcement they had received a preliminary non-binding “going private” proposal from New Wave MMXV - a company controlled by its chairman and CEO Charles Chao. The bid was US$41/share. The GlobalTimes had an article where sources opined Sina would "go home" to list in HK or on the STAR Market. This was followed by an Agreement and Plan of Merger pursuant to which New Wave would acquire all of outstanding ordinary shares not owned at US$43.30/share. Shareholders approved the merger on 23 December 2020.The importance of Sina Corp was that it owned a very large stake in China's premier micro-blogging (twitter-equivalent) service, operated by Weibo Corp (Adr) (WB US). Prior to that EGM, according to David Blennerhassett's excellent write-ups of the deal in Sina Corp: Management Buyout Offer, and What's Going On With Sina Corp? (along with a fabulous initial cut at dissenters' appraisal rights for Chinese companies coming home in Homecoming For Chinese Companies: Appraisal Rights &amp; Fair Value), Sina had intended to issue written notices of authorization to objecting shareholders (prior to the EGM, 21.5mn shares or 35.9% of the outstanding shares of Sina issued notices of objections to the company). The dissenting total was quite high, and could have been a reason for Charles Chao to walk away from the deal, but despite the "requirement" to issue authorization notices by early Feb, there was no public acknowledgment of the situation by SINA until 22 March when the company issued a press release saying the merger had been completed.So that was done.Back in February, the Hong Kong capital markets world was atwitter (woefully bad pun intended) with the news (Bloomberg, Reuters, that Weibo Corp (Adr) (WB US), China's largest micro-blogging service (China twitter) intended to launch a secondary offering in Hong Kong, like many other US ADR-listed Chinese companies, and had hired banks (GS, CLSA, CS) to do so. But since then, there has been no follow-up news. But There is Now NEW "News"... Which is Not Yet NewsLate in the Asia evening on 6 July 2021, Reuters had an EXCLUSIVE which said Weibo chairman Charles Chao - with 45% of shares out but 71% of voting rights - would team up with an as-yet unnamed Shanghai-based state firm to take the company private. One goal would be to get Alibaba Group (BABA US) out of their 30% stake. Two sources told Reuters the consortium plans to offer $90-100/share.As I wrote that sentence, the shares were indicated +30% at just over US$71/share. My first thought was that the shares would trade "wide" to these early-reported terms as there are political considerations (will the State Council appreciate that a regional SASAC puts up money to buy out an internet firm?), questions about where BABA would agree to sell, timeline, and questions about what Charles Chao and the unnamed Shanghai entity would do if materially all the minorities dissented.As I finish that paragraph, Bloomberg appears to have reached a Weibo Corp (Adr) (WB US) spokesperson who says that this rumour is not true. And a while later, we have a Weibo release which offers a pretty strong denial. Of course, that doesn't mean it isn't true. It just means that it isn't true for public consumption yet.But it is a big interesting situation so we take a closer look at the parameters! And the shares opened up 10%.

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<a href="https://www.smartkarma.com/entities/coupang" target="_blank" data-smartkarma-citation="entities:28425:1" rel="noopener">Coupang (CPNG US)</a>, the largest e-commerce company in South Korea with US$ 12.0bn in annual revenue, has come under a lot of scrutiny ever since its extremely successful IPO.The latest in a series of negative publicity for Coupang is the news that South Korea’s antitrust watchdog has launched an investigation over an accusation that the company has meddled with algorithms to prioritize its own products.Although the shares were down over 40% from the first-day peak, Softbank Group-backed company is trading at $40.46 per share, 15% above the IPO price.Mega cap Chinese e-commerce companies like <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a> have underperformed the S&amp;P index by almost 50% during the last one-year period due to concerns over strict oversight by the government. Given how things have fared so far, it seems like Coupang is heading in a direction that invites strict oversight from the government.

Coupang (CPNG US), the largest e-commerce company in South Korea with US$ 12.0bn in annual revenue, has come under a lot of scrutiny ever since its extremely successful IPO.The latest in a series of negative publicity for Coupang is the news that South Korea’s antitrust watchdog has launched an investigation over an accusation that the company has meddled with algorithms to prioritize its own products.Although the shares were down over 40% from the first-day peak, Softbank Group-backed company is trading at $40.46 per share, 15% above the IPO price.Mega cap Chinese e-commerce companies like Alibaba Group (BABA US) have underperformed the S&amp;P index by almost 50% during the last one-year period due to concerns over strict oversight by the government. Given how things have fared so far, it seems like Coupang is heading in a direction that invites strict oversight from the government.

Coupang: Inviting Strict Oversight from Government Regulators

China

Alibaba Group Holding Limited provides online sales services. The Company provides internet infrastructure, electronic commerce, online financial, and internet content services through its subsidiaries. Alibaba Group Holding offers its products and services worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Alibaba Group Holding (BABA US)

Zomato Pre-IPO - Peer Comparison - Listed and Domestic

Zomato (ZOM IN) aims to raise US$1.1bn in its upcoming India IPO, which will be launched next week. This would be the largest listing in India...

Sumeet Singh

Daojia Pre-IPO - Can’t Pinpoint the True Growth

Daojia Limited (DL), one of the largest one-stop home services platforms in China, aims to raise US$300m in its US IPO, which now may or may not...

Sumeet Singh

Coupang (CPNG US): Under the Regulator's Microscope

Not unlike its Chinese counterparts, Coupang too has come under anti-trust regulatory scrutiny for flexing its dominant player's power. Risk...

Mitchell Kim

What's Going On With Weibo?

Weibo was in the news as a story suggested the chairman would join with a state entity to take the company private. This was denied shortly after....

Travis Lundy

Coupang: Inviting Strict Oversight from Government Regulators

If bulls start to doubt because of regulatory risks then the downtrend could be long and hard for Coupang shares as there's a lot to lose before...

Oshadhi Kumarasiri

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)