Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/chewy-inc" target="_blank" data-smartkarma-citation="entities:28110:1" rel="noopener">Chewy (CHWY US)</a> reported a strong quarter but provided weak 3Q revenue guidance, pushing shares down over 10% on heavy volume during regular trading session.</li>
<li>
<a href="https://www.smartkarma.com/entities/chewy-inc" target="_blank" data-smartkarma-citation="entities:28110:1" rel="noopener">Chewy (CHWY US)</a> shares massively underperformed in 2023, with shares down ~34% year-to-date vs a 16% gain on the S&amp;P 500 index.</li>
<li>In July, Chewy CFO Mario Marte stepped down after 8 years in the company. He sold ~$10M worth of Chewy shares in 2023.</li>
</ul>



Chewy (CHWY US) reported a strong quarter but provided weak 3Q revenue guidance, pushing shares down over 10% on heavy volume during regular trading session.

Chewy (CHWY US) shares massively underperformed in 2023, with shares down ~34% year-to-date vs a 16% gain on the S&amp;P 500 index.
In July, Chewy CFO Mario Marte stepped down after 8 years in the company. He sold ~$10M worth of Chewy shares in 2023.


Chewy: CFO Stepped Down, Weak 3Q Guidance, More Selling Pressure Is Likely

<ul>
<li>Chewy will report 1QFY23 financial results after the market close on Wednesday, May 31, 2023. Management expects 1QFY23 net sales of between $2.72B and $2.74B, representing 12%-13% y/y growth.</li>
<li>I calculate that insiders such as CEO &amp; Director Mr. Singh, CFO Mr. Marte, and other management team sold ~$28M worth of Chewy shares during the last six months.</li>
<li>My bear case scenario suggests downside on the continued slowdown in consumables, hard goods sales, intense competition in the pet insurance and pet health care segments, and uncertain macro environment.</li>
</ul>


Chewy will report 1QFY23 financial results after the market close on Wednesday, May 31, 2023. Management expects 1QFY23 net sales of between $2.72B and $2.74B, representing 12%-13% y/y growth.
I calculate that insiders such as CEO &amp; Director Mr. Singh, CFO Mr. Marte, and other management team sold ~$28M worth of Chewy shares during the last six months.
My bear case scenario suggests downside on the continued slowdown in consumables, hard goods sales, intense competition in the pet insurance and pet health care segments, and uncertain macro environment.


Insiders Continue To Sell Chewy Stock. FY23 Guidance Seems Overly Optimistic

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>In spite of the operating and economic climate difficulties, Chewy managed to deliver an all-around beat, surpassing the revenue, profitability, and free cash flow expectations of Wall Street.</li><li>Their net sales climbed 13% to $10 billion during the fourth quarter, representing an annual growth rate of roughly 14%.</li><li>Baptista Research looks to evaluate the different factors that could influence the company's price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.</li></ul>

In spite of the operating and economic climate difficulties, Chewy managed to deliver an all-around beat, surpassing the revenue, profitability, and free cash flow expectations of Wall Street.Their net sales climbed 13% to $10 billion during the fourth quarter, representing an annual growth rate of roughly 14%.Baptista Research looks to evaluate the different factors that could influence the company's price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

Chewy Inc.: Growing Market Share In Pet Products – Key Drivers

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC 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

New Ruipeng Pet Group / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/new-ruipeng-pet-group-inc" target="_blank" data-smartkarma-citation="entities:36735:1" rel="noopener">New Ruipeng Pet Group (RPET US)</a> is looking to raise at least US$100m in its upcoming US IPO.</li>
<li>New Ruipeng Pet Group (Ruipeng) is a pet services platform, primarily offering pet care services, supply chain services and local services, covering the entire lifecycle of pets. </li>
<li>In our previous notes, we have looked at the company’s past performance. In this note, we undertake a peer comparison.</li>
</ul>



New Ruipeng Pet Group (RPET US) is looking to raise at least US$100m in its upcoming US IPO.
New Ruipeng Pet Group (Ruipeng) is a pet services platform, primarily offering pet care services, supply chain services and local services, covering the entire lifecycle of pets. 
In our previous notes, we have looked at the company’s past performance. In this note, we undertake a peer comparison.


New Ruipeng Pet Group Pre-IPO Peer Comparison - Largest Domestic Player, but Smallest Margins

Algosun Global

<ul>
<li>New Ruipeng Pet Group, a China-based pet clinic operator and provider of pet care services, filed for a U.S. IPO. The company plans to list ADSs under the ticker "RPET."</li>
<li>The company’s most recent private round was a $500M venture round led by Boehringer Ingelheim and Tencent at a ~$4.4B valuation in September 2020. </li>
<li>We believe investors should think twice before investing in the New Ruipeng IPO as the pet hospital operator struggled to grow revenues, operating losses mounted, and labor costs increased.</li>
</ul>


New Ruipeng Pet Group, a China-based pet clinic operator and provider of pet care services, filed for a U.S. IPO. The company plans to list ADSs under the ticker "RPET."
The company’s most recent private round was a $500M venture round led by Boehringer Ingelheim and Tencent at a ~$4.4B valuation in September 2020. 
We believe investors should think twice before investing in the New Ruipeng IPO as the pet hospital operator struggled to grow revenues, operating losses mounted, and labor costs increased.


New Ruipeng Pet Group IPO: Struggling Pet Hospital Operator. Hard To Justify Premium Valuation

United States

Chewy, Inc. is an online retailer of pet food and other pet-related products. The Company through its retail website and mobile application offers pet food, treats, supplies, and healthcare products for dogs, cats, fish, birds, horses, and reptiles, as well as provides a range of pet clothing and medications. Chewy serves customers in the United States.

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Chewy (CHWY US)

Chewy: CFO Stepped Down, Weak 3Q Guidance, More Selling Pressure Is Likely

Investors continued to sell Chewy shares post 2QFY23 earnings. I believe more selling pressure is likely as our bear case scenario suggests...

Andrei Zakharov

Insiders Continue To Sell Chewy Stock. FY23 Guidance Seems Overly Optimistic

I see further room for downside on the continued slowdown in consumables and hard goods sales, intense competition in the pet insurance and pet...

Andrei Zakharov

New Ruipeng Pet Group Pre-IPO Peer Comparison - Largest Domestic Player, but Smallest Margins

New Ruipeng Pet Group (RPET US) is looking to raise at least US$100m in its upcoming US IPO. In this note, we undertake a peer comparison.

Clarence Chu

New Ruipeng Pet Group IPO: Struggling Pet Hospital Operator. Hard To Justify Premium Valuation

We believe investors should think twice before investing as the company’s revenue growth deceleration, competition, and worsening fundamentals may...

Andrei Zakharov

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Chewy: CFO Stepped Down, Weak 3Q Guidance, More Selling Pressure Is Likely

​Investors continued to sell Chewy shares post 2QFY23 earnings. I believe more selling pressure is likely as our bear case scenario suggests...

Andrei Zakharov

Insiders Continue To Sell Chewy Stock. FY23 Guidance Seems Overly Optimistic

I see further room for downside on the continued slowdown in consumables and hard goods sales, intense competition in the pet insurance and pet...

Andrei Zakharov

Chewy Inc.: Growing Market Share In Pet Products – Key Drivers

In spite of the operating and economic climate difficulties, Chewy managed to deliver an all-around beat, surpassing the revenue, profitability,...

Baptista Research

New Ruipeng Pet Group Pre-IPO Peer Comparison - Largest Domestic Player, but Smallest Margins

New Ruipeng Pet Group (RPET US) is looking to raise at least US$100m in its upcoming US IPO. In this note, we undertake a peer comparison.

Clarence Chu

New Ruipeng Pet Group IPO: Struggling Pet Hospital Operator. Hard To Justify Premium Valuation

We believe investors should think twice before investing as the company’s revenue growth deceleration, competition, and worsening fundamentals may...

Andrei Zakharov

Investors continued to sell Chewy shares post 2QFY23 earnings. I believe more selling pressure is likely as our bear case scenario suggests...