IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/aihuishou" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener">Aihuishou (RERE US)</a> operates the largest pre-owned consumer electronics transactions and services platform in China under the brand “ATRenew”, which stands for “all things renew.” The platform consists of <em>AHS Recycle</em> (an omnichannel business for the collection of pre-owned consumer electronics), <em>PJT Marketplace</em> (B2B channel) and <em>Paipai Marketplace</em> (B2C channel). </p></div><div>
<p>At the mid-point of the proposed IPO price range of $13.00-15.00 per ADS, AiHuiShou will have a market cap of $3.1 billion. At the mid-point of the IPO price range, the net proceeds are $205.7 million. The raise is materially below the rumoured target raise of $500 million to $1 billion, according to press reports.</p>
<p>Existing shareholders have indicated a total of $100 million of the IPO (44.0% of the ADSs at the mid-point of the IPO price range). The indications of interest from <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a> and Tiger Global.</p>
<p>In <a href="https://www.smartkarma.com/insights/aihuishou-ipo-initiation-turning-the-vicious-cycle-into-a-virtuous-one" target="_blank" data-smartkarma-citation="insights:52617" rel="noopener">AiHuiShou IPO Initiation: Turning the Vicious Cycle into a Virtuous One</a>, we stated that AiHuiShou as the largest player as measured by GMV and transacted devices, is well-positioned to capture its fair share of China's pre-owned consumer electronic devices market opportunity. AiHuiShou is delivering on this market opportunity through strong revenue growth, declining loss margin and improving cash burn. AiHuiShou’s business model will also appeal to investors with an ESG mandate. We concluded that AiHuiShou's story warrants a closer look.</p>
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<p>On a relative valuation basis and at the IPO price range, AiHuiShou is attractively valued on both an EV/Sales and growth adjusted EV/Sales multiples (an EV/Sales/Growth basis). Notably, the last funding round in May 2021 valued AiHuiShou at $19.43 per ordinary share, implying $12.96 per ADS which is broadly in line with the low-end of the IPO price range.</p>
<p>While the lower than expected raise suggest that AiHuiShou received lukewarm investor interest, yesterday's blistering first-day pop of <a href="https://www.smartkarma.com/entities/kanzhun-ltd" target="_blank" data-smartkarma-citation="entities:33368:1" rel="noopener">Kanzhun (BZ US)</a> suggests that the market may be warming up again to high-growth Chinese ADRs. Overall, we are inclined to participate. </p>
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Aihuishou (RERE US) operates the largest pre-owned consumer electronics transactions and services platform in China under the brand “ATRenew”, which stands for “all things renew.” The platform consists of AHS Recycle (an omnichannel business for the collection of pre-owned consumer electronics), PJT Marketplace (B2B channel) and Paipai Marketplace (B2C channel). 
At the mid-point of the proposed IPO price range of $13.00-15.00 per ADS, AiHuiShou will have a market cap of $3.1 billion. At the mid-point of the IPO price range, the net proceeds are $205.7 million. The raise is materially below the rumoured target raise of $500 million to $1 billion, according to press reports.
Existing shareholders have indicated a total of $100 million of the IPO (44.0% of the ADSs at the mid-point of the IPO price range). The indications of interest from JD.com Inc. (9618 HK) and Tiger Global.
In AiHuiShou IPO Initiation: Turning the Vicious Cycle into a Virtuous One, we stated that AiHuiShou as the largest player as measured by GMV and transacted devices, is well-positioned to capture its fair share of China's pre-owned consumer electronic devices market opportunity. AiHuiShou is delivering on this market opportunity through strong revenue growth, declining loss margin and improving cash burn. AiHuiShou’s business model will also appeal to investors with an ESG mandate. We concluded that AiHuiShou's story warrants a closer look.

On a relative valuation basis and at the IPO price range, AiHuiShou is attractively valued on both an EV/Sales and growth adjusted EV/Sales multiples (an EV/Sales/Growth basis). Notably, the last funding round in May 2021 valued AiHuiShou at $19.43 per ordinary share, implying $12.96 per ADS which is broadly in line with the low-end of the IPO price range.
While the lower than expected raise suggest that AiHuiShou received lukewarm investor interest, yesterday's blistering first-day pop of Kanzhun (BZ US) suggests that the market may be warming up again to high-growth Chinese ADRs. Overall, we are inclined to participate. 


<div><p><a href="https://www.smartkarma.com/entities/aihuishou" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener">Aihuishou (RERE US)</a> operates the largest pre-owned consumer electronics transactions and services platform in China under the brand “ATRenew”, which stands for “all things renew.” The platform consists of AHS Recycle (an omnichannel business for the collection of pre-owned consumer electronics), PJT Marketplace (B2B channel) and Paipai Marketplace (B2C channel).  AiHuiShou is seeking to raise $500 million to $1 billion through an NYSE listing, according to press reports.   </p></div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/aihuishou-ipo-initiation-turning-the-vicious-cycle-into-a-virtuous-one" target="_blank" data-smartkarma-citation="insights:52617" rel="noopener">AiHuiShou IPO Initiation: Turning the Vicious Cycle into a Virtuous One</a>, we stated that AiHuiShou as the largest player as measured by GMV and transacted devices, is well-positioned to capture its fair share of China's pre-owned consumer electronic devices market opportunity. AiHuiShou is delivering on this market opportunity through strong revenue growth, declining loss margin and improving cash burn. AiHuiShou’s business model will also appeal to investors with an ESG mandate. We concluded that AiHuiShou's story warrants a closer look. In this note, we present our forecasts and take the first look at AiHuiShou's potential valuation range. </p></div></div>

Aihuishou (RERE US) operates the largest pre-owned consumer electronics transactions and services platform in China under the brand “ATRenew”, which stands for “all things renew.” The platform consists of AHS Recycle (an omnichannel business for the collection of pre-owned consumer electronics), PJT Marketplace (B2B channel) and Paipai Marketplace (B2C channel).  AiHuiShou is seeking to raise $500 million to $1 billion through an NYSE listing, according to press reports.   In AiHuiShou IPO Initiation: Turning the Vicious Cycle into a Virtuous One, we stated that AiHuiShou as the largest player as measured by GMV and transacted devices, is well-positioned to capture its fair share of China's pre-owned consumer electronic devices market opportunity. AiHuiShou is delivering on this market opportunity through strong revenue growth, declining loss margin and improving cash burn. AiHuiShou’s business model will also appeal to investors with an ESG mandate. We concluded that AiHuiShou's story warrants a closer look. In this note, we present our forecasts and take the first look at AiHuiShou's potential valuation range. 

President, Vision Research

Robert C Prather Jr

President

Vision Research

Vision Research was formed in 2004 with the vision of generating the best possible fundamental analysis and investment research for smid cap US equities. In 2008, we broadened our coverage to include mid/large cap US stocks.  After researching a  few ideas outside the US each year for a number of years, we launched a dedicated non-US equity product at the end of 2015.  This was followed by the introduction of a product focused on IPOs in mid-2017.

Fundamental Insight

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US) </a>officially launched its business in Poland this month, posing significant competition for Allegro.eu (also amidst increasing competition from <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> ) and causing Allegro.eu to provide muted guidance for 2021 in early March.  Subsequently, on March 16th, insiders announced the sale of approximately $1.3bn in shares at a discount to the current price and just ahead of the April 2021 IPO lock up expiration.</p>

Amazon.com Inc (AMZN US) officially launched its business in Poland this month, posing significant competition for Allegro.eu (also amidst increasing competition from Alibaba Group (9988 HK) ) and causing Allegro.eu to provide muted guidance for 2021 in early March.  Subsequently, on March 16th, insiders announced the sale of approximately $1.3bn in shares at a discount to the current price and just ahead of the April 2021 IPO lock up expiration.

Allegro.eu (ALE PW): Insiders Dump $1.3bn Ahead of Lockup Expiration and After Amazon Entry

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<p><a href="https://www.smartkarma.com/entities/coupang" target="_blank" data-smartkarma-citation="entities:28425:1" rel="noopener">Coupang (CPNG US)</a> is the largest e-commerce platform in South Korea, according to Euromonitor. Coupang is best known for Rocket Delivery, which provides free, next-day delivery for orders placed any time of the day.</p>
<p>At the proposed IPO price range of $27-30 per share, Coupang will have a market cap of $46-51 billion. The IPO which comprises of a primary and secondary offering will raise total gross proceeds up to $3.6 billion.  At the mid-point of the IPO price range, the net proceeds from the primary raise are $2.8 million. </p>
</div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/coupang-ipo-initiation-delivering-the-goods" target="_blank" data-smartkarma-citation="insights:48125" rel="noopener">Coupang IPO Initiation: Delivering the Goods</a>, we opined that Coupang's fundamentals tick all the right boxes and worth a look, in our view. Coupang is a new-economy growth story and at the IPO price range, is attractively priced for its growth potential vs global e-commerce peers. Consequently, we would participate in the IPO. </p></div></div></div>


Coupang (CPNG US) is the largest e-commerce platform in South Korea, according to Euromonitor. Coupang is best known for Rocket Delivery, which provides free, next-day delivery for orders placed any time of the day.
At the proposed IPO price range of $27-30 per share, Coupang will have a market cap of $46-51 billion. The IPO which comprises of a primary and secondary offering will raise total gross proceeds up to $3.6 billion.  At the mid-point of the IPO price range, the net proceeds from the primary raise are $2.8 million. 
In Coupang IPO Initiation: Delivering the Goods, we opined that Coupang's fundamentals tick all the right boxes and worth a look, in our view. Coupang is a new-economy growth story and at the IPO price range, is attractively priced for its growth potential vs global e-commerce peers. Consequently, we would participate in the IPO. 

<div><p><a href="https://www.smartkarma.com/entities/coupang" target="_blank" data-smartkarma-citation="entities:28425:1" rel="noopener">Coupang (CPNG US)</a> is the largest e-commerce platform in South Korea, according to Euromonitor. Coupang is best known for Rocket Delivery, which provides free, next-day delivery for orders placed any time of the day.</p></div><div><p>Coupang is seeking to raise up to $2 billion at a $50 billion valuation, according to Reuters. The rumoured valuation is a significant increase to the December 2018 fundraising at a $9 billion valuation, according to press reports. </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/coupang-ipo-initiation-delivering-the-goods" target="_blank" data-smartkarma-citation="insights:48125" rel="noopener">Coupang IPO Initiation: Delivering the Goods</a>, we opined that Coupang's fundamentals tick all the right boxes and worth a look, in our view. In this note, we take a first look at Coupang's valuation. Overall, based on our valuation analysis, we think that the rumoured IPO valuation can be justified.</p></div></div></div>

Coupang (CPNG US) is the largest e-commerce platform in South Korea, according to Euromonitor. Coupang is best known for Rocket Delivery, which provides free, next-day delivery for orders placed any time of the day.Coupang is seeking to raise up to $2 billion at a $50 billion valuation, according to Reuters. The rumoured valuation is a significant increase to the December 2018 fundraising at a $9 billion valuation, according to press reports. In Coupang IPO Initiation: Delivering the Goods, we opined that Coupang's fundamentals tick all the right boxes and worth a look, in our view. In this note, we take a first look at Coupang's valuation. Overall, based on our valuation analysis, we think that the rumoured IPO valuation can be justified.

Poland

Allegro.eu SA operates shopping e-commerce platform. The Company offers products in categories such as automotive, fashion, home and garden, electronics, books and collectibles, and health and beauty. Allegro.eu serves customers in Europe.

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Allegro.eu (ALE PW)

AiHuiShou IPO: Valuation Insights

While the lower than expected raise suggest lukewarm investor interest, yesterday's blistering first-day pop of Kanzhun points to improving market...

Arun George

AiHuiShou IPO: Valuation First-Look

AiHuiShou is seeking to raise $0.5-1.0 billion through an NYSE listing. In this note, we present our forecasts and take the first look at...

Arun George

Allegro.eu (ALE PW): Insiders Dump $1.3bn Ahead of Lockup Expiration and After Amazon Entry

Why are insiders dumping stock at a discount prior to the IPO lock-up expiration and shortly after Amazon's official entry?

Robert C Prather Jr

Coupang IPO: Valuation Insights

The $27-30 price range implies gross proceeds up to $3.6 billion and values Coupang at $46-51 billion. At the price range, Coupang is attractively...

Arun George

Coupang IPO: Valuation First Look

Coupang is seeking a $50 billion valuation, according to Reuters. Overall, based on our valuation analysis, we think that the rumoured IPO...

Arun George

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