Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

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.

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/missfresh-limited" target="_blank" data-smartkarma-citation="entities:33468:1" rel="noopener">Missfresh (MF US)</a>  is primarily engaged in the business of providing fresh produce and fast-moving consumer goods to customers through the company’s self-owned online e-commerce platform and distributed mini warehouse (DMW) networks. According to iResearch, the company was the first to invent the DMW model by building and operating DMWs in 2015 and was ranked second in China’s DMW retail industry in 2020, based on gross merchandise volume (GMV).</p><p>The company is backed by Tencent and has filed for an IPO to list its shares in the US, and according to news media outlets, Missfresh could raise up to US$500m through the IPO.</p>

Missfresh (MF US)  is primarily engaged in the business of providing fresh produce and fast-moving consumer goods to customers through the company’s self-owned online e-commerce platform and distributed mini warehouse (DMW) networks. According to iResearch, the company was the first to invent the DMW model by building and operating DMWs in 2015 and was ranked second in China’s DMW retail industry in 2020, based on gross merchandise volume (GMV).The company is backed by Tencent and has filed for an IPO to list its shares in the US, and according to news media outlets, Missfresh could raise up to US$500m through the IPO.

Missfresh IPO: Per Unit Analysis Shows the Company Is Far from Profits

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.

<p><a href="https://www.smartkarma.com/entities/dingdong-maicai" target="_blank" data-smartkarma-citation="entities:33461:1" rel="noopener">Dingdong Maicai (DDL US)</a> is an online grocery platform in China. The <em>Dingdong Fresh</em> mobile app and mini-programs enable Chinese consumer to shop online for groceries and other products. Dingdong notes that its market share in the on-demand e-commerce industry as measured by GMV (gross merchandise value) was 10.1% in 2020, according to CIC.</p><p>Dingdong is backed by Shunwei China Internet Fund V (5.7% of outstanding shares), General Atlantic (5.6%), SoftBank Vision Fund (5.6%), CMC Capital (5.3%) and DST Asia (5.1%). Dingdong has filed for an NYSE IPO to raise $500 million, according to press reports. We also note that peer, <a href="https://www.smartkarma.com/entities/missfresh-limited" target="_blank" data-smartkarma-citation="entities:33468:1" rel="noopener">Missfresh (MF US)</a>, has also filed for a Nasdaq IPO to raise $500 million, according to press reports. We discussed this in <a href="https://www.smartkarma.com/insights/missfresh-ipo-initiation-no-so-fresh" target="_blank" data-smartkarma-citation="insights:53139" rel="noopener">Missfresh IPO Initiation: No so Fresh</a>. WM Tech has also filed for an HKEx IPO to raise potentially $1 billion, according to press reports. We discussed this in <a href="https://www.smartkarma.com/insights/wm-tech-ipo-initiation-food-for-thought" target="_blank" data-smartkarma-citation="insights:49914" rel="noopener">WM Tech IPO Initiation: Food for Thought</a>. </p><p>The current frenzy around the online grocery delivery market in China is reminiscent of the bike-sharing frenzy a few years. The promises of a sizeable addressable market opportunity have resulted in significant sums being raised by specialists (such as Dingdong and Missfresh), tech goliaths (<a href="https://www.smartkarma.com/entities/pinduoduo-inc" target="_blank" data-smartkarma-citation="entities:27250:1" rel="noopener">Pinduoduo (PDD US)</a> and <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>) and traditional offline stores (such as <a href="https://www.smartkarma.com/entities/wm-tech-corporation" target="_blank" data-smartkarma-citation="entities:32976:1" rel="noopener">WM Tech Corporation (WMT HK)</a>) for their respective online grocery platforms. The resulting arms race has led to these players reporting heavy losses for their online grocery segments in the quest to grab market share. </p><div class="content-highlight"><p>It is unclear if Dingdong (and Missfresh) has a sustainable competitive advantage to emerge as one of the winners. The online grocery delivery market is set for a shakeout which means that like bike-sharing, it will result in significant shareholder value destruction. Overall, we would pass on the IPO and wait on the sidelines to see how this plays out.</p></div>

Dingdong Maicai (DDL US) is an online grocery platform in China. The Dingdong Fresh mobile app and mini-programs enable Chinese consumer to shop online for groceries and other products. Dingdong notes that its market share in the on-demand e-commerce industry as measured by GMV (gross merchandise value) was 10.1% in 2020, according to CIC.Dingdong is backed by Shunwei China Internet Fund V (5.7% of outstanding shares), General Atlantic (5.6%), SoftBank Vision Fund (5.6%), CMC Capital (5.3%) and DST Asia (5.1%). Dingdong has filed for an NYSE IPO to raise $500 million, according to press reports. We also note that peer, Missfresh (MF US), has also filed for a Nasdaq IPO to raise $500 million, according to press reports. We discussed this in Missfresh IPO Initiation: No so Fresh. WM Tech has also filed for an HKEx IPO to raise potentially $1 billion, according to press reports. We discussed this in WM Tech IPO Initiation: Food for Thought. The current frenzy around the online grocery delivery market in China is reminiscent of the bike-sharing frenzy a few years. The promises of a sizeable addressable market opportunity have resulted in significant sums being raised by specialists (such as Dingdong and Missfresh), tech goliaths (Pinduoduo (PDD US) and Meituan (3690 HK)) and traditional offline stores (such as WM Tech Corporation (WMT HK)) for their respective online grocery platforms. The resulting arms race has led to these players reporting heavy losses for their online grocery segments in the quest to grab market share. It is unclear if Dingdong (and Missfresh) has a sustainable competitive advantage to emerge as one of the winners. The online grocery delivery market is set for a shakeout which means that like bike-sharing, it will result in significant shareholder value destruction. Overall, we would pass on the IPO and wait on the sidelines to see how this plays out.

Dingdong IPO Initiation: An Arms Race Is Brewing

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.

Full Truck Alliance   / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/full-truck-alliance" target="_blank" data-smartkarma-citation="entities:33429:1" rel="noopener">Full Truck Alliance (YMM US)</a> (FTA),  China’s largest digital freight platform by gross transaction value, aims to raise up to US$1.6bn via a US listing. It is backed by Softbank and Sequoia.</p></div><div><p>In our earlier notes, we spoke about the positive and negatives aspects of the deal, <a href="https://www.smartkarma.com/insights/full-truck-alliance-pre-ipo-the-positives-category-leader" target="_blank" rel="noopener">Full Truck Alliance Pre-IPO - The Positives - Category Leader</a> and <a href="https://www.smartkarma.com/insights/full-truck-alliance-pre-ipo-the-negatives-still-a-mixed-bag" target="_blank" rel="noopener">Full Truck Alliance Pre-IPO - The Negatives - Still a Mixed Bag,</a> as well as valuations in <a href="https://www.smartkarma.com/insights/full-truck-alliance-pre-ipo-valuation-even-the-previous-round-might-have-been-a-stretch" target="_blank" rel="noopener">Full Truck Alliance Pre-IPO - Valuation, Even the Previous Round Might Have Been a Stretch</a>.</p></div><div><p>In this note, we will talk about the deal dynamics and run the deal through our ECM framework. </p></div>

Full Truck Alliance (YMM US) (FTA),  China’s largest digital freight platform by gross transaction value, aims to raise up to US$1.6bn via a US listing. It is backed by Softbank and Sequoia.In our earlier notes, we spoke about the positive and negatives aspects of the deal, Full Truck Alliance Pre-IPO - The Positives - Category Leader and Full Truck Alliance Pre-IPO - The Negatives - Still a Mixed Bag, as well as valuations in Full Truck Alliance Pre-IPO - Valuation, Even the Previous Round Might Have Been a Stretch.In this note, we will talk about the deal dynamics and run the deal through our ECM framework. 

Full Truck Alliance IPO - Decent Investor Line-Up, at Best a Punt at These Valuations

Oshadhi Kumarasiri

<p><a href="https://www.smartkarma.com/entities/dingdong-maicai" target="_blank" data-smartkarma-citation="entities:33461:1" rel="noopener">Dingdong Maicai (DDL US)</a>, an on-demand fresh produce and grocery delivery platform in China, plans to raise US$500m in its US IPO, which values the company at around US$6.0bn. Having analysed the business model and financial performance, we think Dingdong Maicai’s monetisation is rather weak, and therefore the company is currently not able to become profitable.</p>

Dingdong Maicai (DDL US), an on-demand fresh produce and grocery delivery platform in China, plans to raise US$500m in its US IPO, which values the company at around US$6.0bn. Having analysed the business model and financial performance, we think Dingdong Maicai’s monetisation is rather weak, and therefore the company is currently not able to become profitable.

Dingdong Maicai IPO: Lacks Margin Upside & Fading COVID Impact

<p><a href="https://www.smartkarma.com/entities/missfresh-limited" target="_blank" data-smartkarma-citation="entities:33468:1" rel="noopener">Missfresh (MF US)</a> is an online grocery platform in China. Missfresh notes that it ranked first in China’s on-demand DMW (distributed mini-warehouse) retail industry in 2018 and 2019, respectively, and ranked second in 2020 as measured by GMV (gross merchandise value), according to iResearch.</p><p>Missfresh is backed by Shunwei China Internet Fund IV (12.4% of outstanding shares, 3.8% of voting power) and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> (8.1% of outstanding shares, 2.5% of voting power). Missfresh has filed for a Nasdaq IPO to raise $500 million, according to press reports. We also note that peer, <a href="https://www.smartkarma.com/entities/dingdong-maicai" target="_blank" data-smartkarma-citation="entities:33461:1" rel="noopener">Dingdong Maicai (DDL US)</a>, has also filed for an NYSE IPO to raise $500 million, according to press reports. </p><p>Missfresh was a beneficiary of the COVID-19 pandemic resulting in an exceptional 1Q20. However, the performance since 1Q20 has been lacklustre as Missfresh is facing the twin challenges of tough competition and a partial reversal of consumer behaviour. With the easing of lockdown restrictions and waning of the COVID-19 pandemic, some consumer behaviour has shifted back to shopping offline for groceries. </p><div class="content-highlight"><p>While the recent fundraisings to support <a href="https://www.smartkarma.com/entities/pinduoduo-inc" target="_blank" data-smartkarma-citation="entities:27250:1" rel="noopener">Pinduoduo (PDD US)</a> (Duo Duo Maicai) and <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>’s online grocery delivery platforms underscores the opportunity, it also suggests that Missfresh will find it harder to compete and generate shareholder returns. Overall, we think that Missfresh is a challenged business and we would pass on the IPO.</p></div>

Missfresh (MF US) is an online grocery platform in China. Missfresh notes that it ranked first in China’s on-demand DMW (distributed mini-warehouse) retail industry in 2018 and 2019, respectively, and ranked second in 2020 as measured by GMV (gross merchandise value), according to iResearch.Missfresh is backed by Shunwei China Internet Fund IV (12.4% of outstanding shares, 3.8% of voting power) and Tencent (700 HK) (8.1% of outstanding shares, 2.5% of voting power). Missfresh has filed for a Nasdaq IPO to raise $500 million, according to press reports. We also note that peer, Dingdong Maicai (DDL US), has also filed for an NYSE IPO to raise $500 million, according to press reports. Missfresh was a beneficiary of the COVID-19 pandemic resulting in an exceptional 1Q20. However, the performance since 1Q20 has been lacklustre as Missfresh is facing the twin challenges of tough competition and a partial reversal of consumer behaviour. With the easing of lockdown restrictions and waning of the COVID-19 pandemic, some consumer behaviour has shifted back to shopping offline for groceries. While the recent fundraisings to support Pinduoduo (PDD US) (Duo Duo Maicai) and Meituan (3690 HK)’s online grocery delivery platforms underscores the opportunity, it also suggests that Missfresh will find it harder to compete and generate shareholder returns. Overall, we think that Missfresh is a challenged business and we would pass on the IPO.

China

Dingdong Maicai provides on-demand e-commerce services in China

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

Dingdong Maicai (DDL US)

Missfresh IPO: Per Unit Analysis Shows the Company Is Far from Profits

Having analysed Missfresh’s per unit revenue and margins, we remain concerned about the company’s ability to turn profitable in the near future.

Shifara Samsudeen, ACMA, CGMA

Dingdong IPO Initiation: An Arms Race Is Brewing

The online grocery market is set for a shakeout which will result in significant shareholder value destruction. Overall, we would pass on the IPO...

Arun George

Full Truck Alliance IPO - Decent Investor Line-Up, at Best a Punt at These Valuations

Full Truck Alliance (YMM US), China’s largest digital freight platform by gross transaction value, aims to raise up to US$1.6bn via a US listing....

Sumeet Singh

Dingdong Maicai IPO: Lacks Margin Upside & Fading COVID Impact

Having analysed Dingdong Maicai’s financials and unit cost dynamics, it is clear that the company is not in a position to be profitable in the near...

Oshadhi Kumarasiri

Missfresh IPO Initiation: No so Fresh

Missfresh has filed for a Nasdaq IPO to raise $500 million, according to press reports. Overall, we think that Missfresh is a challenged business...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)