Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

Tuya is one of the global leaders in the IoT based software products and solutions. In 2020, Tuya powered over 116.5 million smart devices, making Tuya the largest IoT PaaS business in the global market of IoT PaaS in terms of the volume of smart devices powered.Established in 2014, the Hangzhou, China based Tuya plans to list on the NYSE. Morgan Stanley, BofA Securities, and CICC are the joint bookrunners in this IPO. The company has put the IPO placeholder at $100 million but this could be raised to as much as <a href="http://www.aastocks.com/en/stocks/news/aafn-news/NOW.1075476/3" target="_blank" rel="noopener">$1 billion. </a>Similar to how smartphones and mobile connectivity has changed the world in the past decade, there is a huge amount of interest in IoT (Internet of Things) driven technology which is just starting to get penetrated in businesses around the world. Similar to how smartphones have allowed millions of people to be better "connected", the IoT technology will now enable the "machines to be connected" to the network, enabling greater business efficiencies and new revenue opportunities. The company generated revenue of $179.9 million (up 70% YoY) and gross profit of $61.9 million (up 122.8% YoY) in 2020. Gross margin of the company improved from 26.3% in 2019 to 34.4% in 2020. Loss from operations as a percentage of revenue improved from -69.4% in 2019 to -38.8% in 2020.

Tuya is one of the global leaders in the IoT based software products and solutions. In 2020, Tuya powered over 116.5 million smart devices, making Tuya the largest IoT PaaS business in the global market of IoT PaaS in terms of the volume of smart devices powered.Established in 2014, the Hangzhou, China based Tuya plans to list on the NYSE. Morgan Stanley, BofA Securities, and CICC are the joint bookrunners in this IPO. The company has put the IPO placeholder at $100 million but this could be raised to as much as $1 billion. Similar to how smartphones and mobile connectivity has changed the world in the past decade, there is a huge amount of interest in IoT (Internet of Things) driven technology which is just starting to get penetrated in businesses around the world. Similar to how smartphones have allowed millions of people to be better "connected", the IoT technology will now enable the "machines to be connected" to the network, enabling greater business efficiencies and new revenue opportunities. The company generated revenue of $179.9 million (up 70% YoY) and gross profit of $61.9 million (up 122.8% YoY) in 2020. Gross margin of the company improved from 26.3% in 2019 to 34.4% in 2020. Loss from operations as a percentage of revenue improved from -69.4% in 2019 to -38.8% in 2020.

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.

Autohome Inc (Adr) / Equity Capital Markets

Autohome plans to raise around US$864m in its secondary listing in Hong Kong. Unlike the prior secondary listing, this one contains a sell down as well
I have covered most aspects of the deal in my earlier note, <a href="https://www.smartkarma.com/insights/autohome-secondary-listing-doesn-t-need-the-cash-at-all" target="_blank" rel="noopener">Autohome Secondary Listing - Doesn’t Need the Cash at All. </a>In this note, I'll only touch upon the updates since my last note.

Autohome plans to raise around US$864m in its secondary listing in Hong Kong. Unlike the prior secondary listing, this one contains a sell down as well
I have covered most aspects of the deal in my earlier note, Autohome Secondary Listing - Doesn’t Need the Cash at All. In this note, I'll only touch upon the updates since my last note.

Autohome Secondary Listing - Going Down a Different Route

Coupang, one of the largest product e-commerce players in Korea, aims to raise up to US$3.6bn in its US listing via a mix of selling primary and secondary shares. In this note, we’ll talk about the lock-up, index inclusion and run the deal through our framework.<div>Coupang offers its 14.8m customers a wide range of owned-inventory selection. In addition, on its marketplace it also offers millions of SKUs sourced from over 200,000 merchants. Apart from normal e-commerce operation, it also provides its customers with: grocery offering, Rocket Fresh; logistics food delivery offering, Coupang Eats; and digital financial services, Coupang Pay.</div><div>I've covered various aspects of the deal in my earlier insights: </div><div><ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/coupang-pre-ipo-the-positives-fast-growth-sticky-customers" target="_blank" rel="noopener">Coupang Pre-IPO - The Positives - Fast Growth, Sticky Customers</a>, </li>
<li><a href="https://www.smartkarma.com/insights/coupang-pre-ipo-the-negatives-horrendous-data-disclosures-including-no-mention-of-ott-launch" target="_blank" rel="noopener">Coupang Pre-IPO - The Negatives - Horrendous Data Disclosures, Including No Mention of OTT Launch</a></li>
<li><a href="https://www.smartkarma.com/insights/coupang-pre-ipo-fair-bit-of-competition-but-it-s-doing-better-than-most-local-peers" target="_blank" rel="noopener">Coupang Pre-IPO - Fair Bit of Competition but It’s Doing Better than Most Local Peers</a></li>
<li><a href="https://www.smartkarma.com/insights/coupang-pre-ipo-earnings-forecast-and-valuation" target="_blank" rel="noopener">Coupang Pre-IPO - Earnings Forecast and Valuation</a></li>
</ul></div>

Coupang, one of the largest product e-commerce players in Korea, aims to raise up to US$3.6bn in its US listing via a mix of selling primary and secondary shares. In this note, we’ll talk about the lock-up, index inclusion and run the deal through our framework.Coupang offers its 14.8m customers a wide range of owned-inventory selection. In addition, on its marketplace it also offers millions of SKUs sourced from over 200,000 merchants. Apart from normal e-commerce operation, it also provides its customers with: grocery offering, Rocket Fresh; logistics food delivery offering, Coupang Eats; and digital financial services, Coupang Pay.I've covered various aspects of the deal in my earlier insights: 

Coupang Pre-IPO - The Positives - Fast Growth, Sticky Customers, 
Coupang Pre-IPO - The Negatives - Horrendous Data Disclosures, Including No Mention of OTT Launch
Coupang Pre-IPO - Fair Bit of Competition but It’s Doing Better than Most Local Peers
Coupang Pre-IPO - Earnings Forecast and Valuation


Coupang IPO - Momentum Play, Unequal Lock-Up, Index Inclusion

<a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a> plans to raise around US$4-5bn in its secondary listing in Hong Kong. The company is said to be looking at launching an offering this month. Yesterday, it undertook a share subdivision and ADR to shares ratio adjustment in its EGM.  So far ten companies have undertaken a secondary listing in Hong Kong, raising a total of US$28bn with a range of US$0.5-11.4bn. Along with covering all of the past listings, we have also looked at the drivers for the secondary listings in our earlier notes, links to which are below: <ul>
<li>
<a href="https://www.smartkarma.com/insights/china-adrs-secondary-listing-deep-dive-yin-and-yang" target="_blank" rel="noopener">China ADRs Secondary Listing Deep-Dive: Yin and Yang,</a> published in Feb 2020,  we looked at the background and rules around undertaking a secondary listing in Hong Kong and then came up with a short-list of companies that might undertake a secondary listing. </li>
<li>
<a href="https://www.smartkarma.com/insights/china-adrs-secondary-listing-covid-19-has-increased-the-tension-but-narrowed-the-short-list" target="_blank" rel="noopener">In China ADRs Secondary Listing: COVID-19 Has Increased the Tension but Narrowed the Short List</a> published in May 2020, we looked at the recent developments and provided an revised short-list</li>
<li>In <a href="https://www.smartkarma.com/insights/china-adrs-secondary-listing-holding-foreign-companies-accountable-act-i-m-coming-home" target="_blank" rel="noopener">China ADRs Secondary Listing - Holding Foreign Companies Accountable Act - I’m Coming Home</a>, published in May 2020, we spoke about the implication of the act which had made its way through the senate.</li>
<li>In <a href="https://www.smartkarma.com/insights/china-adrs-secondary-listing-pipeline-looks-rich-have-three-years-to-move" target="_blank" rel="noopener">China ADRs Secondary Listing - Pipeline looks rich, have three years to move</a>, published in Feb 2021, we looked at the recent updates from the Holding Foreign Companies Accountable Act and Hong Kong Exchanges changes to corporate weighted average voting rights. In this note, we’ll take an early look at the deal and talk about likely timing and impact of the raising.</li>
</ul>In this note, we’ll take a look at the deal and talk about the likely impact of the raising.

Baidu (BIDU US) plans to raise around US$4-5bn in its secondary listing in Hong Kong. The company is said to be looking at launching an offering this month. Yesterday, it undertook a share subdivision and ADR to shares ratio adjustment in its EGM.  So far ten companies have undertaken a secondary listing in Hong Kong, raising a total of US$28bn with a range of US$0.5-11.4bn. Along with covering all of the past listings, we have also looked at the drivers for the secondary listings in our earlier notes, links to which are below: 

China ADRs Secondary Listing Deep-Dive: Yin and Yang, published in Feb 2020,  we looked at the background and rules around undertaking a secondary listing in Hong Kong and then came up with a short-list of companies that might undertake a secondary listing. 

In China ADRs Secondary Listing: COVID-19 Has Increased the Tension but Narrowed the Short List published in May 2020, we looked at the recent developments and provided an revised short-list
In China ADRs Secondary Listing - Holding Foreign Companies Accountable Act - I’m Coming Home, published in May 2020, we spoke about the implication of the act which had made its way through the senate.
In China ADRs Secondary Listing - Pipeline looks rich, have three years to move, published in Feb 2021, we looked at the recent updates from the Holding Foreign Companies Accountable Act and Hong Kong Exchanges changes to corporate weighted average voting rights. In this note, we’ll take an early look at the deal and talk about likely timing and impact of the raising.
In this note, we’ll take a look at the deal and talk about the likely impact of the raising.

Baidu Secondary Listing Early Look - Will Be One of the Largest Secondary Listings This Year

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

Hang Seng China Enterprises Index / Event-Driven

Last evening, Hang Seng Indexes announced the conclusions of the market consultation on the "Proposal to enhance the Hang Seng Index as regards continuing to serve as the most representative and important benchmark of the Hong Kong stock market".Apart from the changes to the <a href="https://www.smartkarma.com/entities/hong-kong-hang-seng-index" target="_blank" data-smartkarma-citation="entities:22899:1" rel="noopener">Hong Kong Hang Seng Index (HSI INDEX)</a>, it was also decided that the weight of all <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a> constituents, including Secondary Listings and WVR Securities, would be capped at 8%. While this was not a part of the market consultation, we had highlighted this as a possibility in our earlier <a href="https://www.smartkarma.com/insights/hscei-dividends-structural-sell-bank-dividends-the-swing-factor" target="_blank" rel="noopener">Insight</a>.Post the 2 inclusions and 4 deletions in the March review, we see a further 3 potential changes at the June review.The big impact of the 8% cap on index constituents will be felt on the HSCEI dividend futures market. With a bulk of the 2021 dividends scheduled to go ex after the implementation of the rebalance, the dividend futures should move lower. The HSCEI 2021/22 dividend steepener should trade less negative than where it has been trading prior to the announcement.In this Insight, we look at the potential changes and their impact on the stocks and the dividend futures.<div class="content-highlight">This Insight is marked Bearish since we expect the HSCEI 2021 dividend futures to move lower.</div>

Last evening, Hang Seng Indexes announced the conclusions of the market consultation on the "Proposal to enhance the Hang Seng Index as regards continuing to serve as the most representative and important benchmark of the Hong Kong stock market".Apart from the changes to the Hong Kong Hang Seng Index (HSI INDEX), it was also decided that the weight of all Hang Seng China Enterprises Index (HSCEI INDEX) constituents, including Secondary Listings and WVR Securities, would be capped at 8%. While this was not a part of the market consultation, we had highlighted this as a possibility in our earlier Insight.Post the 2 inclusions and 4 deletions in the March review, we see a further 3 potential changes at the June review.The big impact of the 8% cap on index constituents will be felt on the HSCEI dividend futures market. With a bulk of the 2021 dividends scheduled to go ex after the implementation of the rebalance, the dividend futures should move lower. The HSCEI 2021/22 dividend steepener should trade less negative than where it has been trading prior to the announcement.In this Insight, we look at the potential changes and their impact on the stocks and the dividend futures.This Insight is marked Bearish since we expect the HSCEI 2021 dividend futures to move lower.

HSCEI June Index Rebalance Preview: Potential Changes & Impact of 8% Cap on Dividends

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.

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Alibaba Group Holding (9988 HK)

Tuya IPO Preview - An IoT Powerhouse

Tuya is one of the global leaders in the IoT based software products and services. This IPO could be in hot demand, especially among investors that...

Douglas Kim

Autohome Secondary Listing - Going Down a Different Route

Autohome plans to raise around US$864m in its secondary listing in Hong Kong. Unlike the prior secondary listing, this one contains a sell down as...

Sumeet Singh

Coupang IPO - Momentum Play, Unequal Lock-Up, Index Inclusion

Coupang aims to raise up to US$3.6bn in its US listing via selling primary and secondary shares. In this note, we’ll talk about the lock-up, index...

Sumeet Singh

Baidu Secondary Listing Early Look - Will Be One of the Largest Secondary Listings This Year

Baidu plans to raise around US$4-5bn in its secondary listing in Hong Kong. The company is said to be looking at launching an offering this month.

Sumeet Singh

HSCEI June Index Rebalance Preview: Potential Changes & Impact of 8% Cap on Dividends

The change in capping at 8% in the HSCEI at the June 21 review will result in large turnover at the review. The change will have a large impact on...

Brian Freitas

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