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><p><a href="https://www.smartkarma.com/entities/aihuishou" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener">Aihuishou (RERE US)</a> (AHS), China’s largest pre-owned consumer electronics transactions and services platform, aims to raise up to US$243m via a US listing. It is backed by <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a>, Morningside and Tiger Global.</p></div><div>
<p>We covered some aspects of the deal in our earlier notes:</p>
<ul>
<li>
<a href="https://www.smartkarma.com/insights/aihuishou-pre-ipo-mostly-positive-pre-owned-but-well-loved" target="_blank" rel="noopener">AiHuiShou Pre-IPO - Mostly Positive - Pre-Owned but Well Loved</a>. </li>
<li><a href="https://www.smartkarma.com/insights/aihuishou-pre-ipo-first-stab-at-valuation" target="_blank" rel="noopener">AiHuiShou Pre-IPO - First Stab at Valuation</a></li>
<li><a href="https://www.smartkarma.com/insights/aihuishou-pre-ipo-pricing-my-mobile-handset-at-physical-stores" target="_blank" rel="noopener">Aihuishou (爱回收) Pre-IPO: Pricing My Mobile Handset at Physical Stores</a></li>
</ul>
<p>In this note, we will talk about the deal dynamics and run the deal through our ECM Framework.</p>
</div>

Aihuishou (RERE US) (AHS), China’s largest pre-owned consumer electronics transactions and services platform, aims to raise up to US$243m via a US listing. It is backed by JD.com Inc (ADR) (JD US), Morningside and Tiger Global.
We covered some aspects of the deal in our earlier notes:


AiHuiShou Pre-IPO - Mostly Positive - Pre-Owned but Well Loved. 
AiHuiShou Pre-IPO - First Stab at Valuation
Aihuishou (爱回收) Pre-IPO: Pricing My Mobile Handset at Physical Stores

In this note, we will talk about the deal dynamics and run the deal through our ECM Framework.


AiHuiShou IPO - Priced to Go but Won't Do a Kanzhun

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.

<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. 

<div><p><a href="https://www.smartkarma.com/entities/aihuishou" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener">Aihuishou (RERE US)</a> (AHS), China’s largest pre-owned consumer electronics transactions and services platform, aims to raise up to US$1bn via a US listing. It is backed by <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a>, Morningside and Tiger Global.</p></div><div>
<p>A total of 26.1m consumer products, worth RMB22.8bn, were transacted by AHS over twelve months ending Mar 2021. It had over 755 offline stores across 172 cities. According to CIC, it had a 6.6% market share in terms of GMV for pre-owned electronics and 8.7% market share in terms of number of pre-owned devices transacted in 2020. As per CIC, its GMV for electronics and number of devices transacted in 2020 were both greater than the next five largest platforms combined, as per CIC. </p>
<p>We covered some aspects of the deal in our earlier note, <a href="https://www.smartkarma.com/insights/aihuishou-pre-ipo-mostly-positive-pre-owned-but-well-loved" target="_blank" rel="noopener">AiHuiShou Pre-IPO - Mostly Positive - Pre-Owned but Well Loved</a>. </p>
<p>In this note, we will talk about valuations.</p>
</div>

Aihuishou (RERE US) (AHS), China’s largest pre-owned consumer electronics transactions and services platform, aims to raise up to US$1bn via a US listing. It is backed by JD.com Inc (ADR) (JD US), Morningside and Tiger Global.
A total of 26.1m consumer products, worth RMB22.8bn, were transacted by AHS over twelve months ending Mar 2021. It had over 755 offline stores across 172 cities. According to CIC, it had a 6.6% market share in terms of GMV for pre-owned electronics and 8.7% market share in terms of number of pre-owned devices transacted in 2020. As per CIC, its GMV for electronics and number of devices transacted in 2020 were both greater than the next five largest platforms combined, as per CIC. 
We covered some aspects of the deal in our earlier note, AiHuiShou Pre-IPO - Mostly Positive - Pre-Owned but Well Loved. 
In this note, we will talk about valuations.


AiHuiShou Pre-IPO - First Stab at Valuation

Consumer Discretionary / Industrials

Henry Kwon

Equity Bottom-Up

<p>CPNG's shares declined by 9.3% on May 13, the day following its 1Q21 earnings release, but has since recovered its loss as of close on May 17. A key question should be whether this represents a dead cat bounce, or whether it represents the beginning of a sustainable share price recovery?</p><p>Without reliable technical parameters established, we mainly rely on two factors, namely Fibonnaci retracement levels and a DCF analysis based on current consensus forecasts to determine how much growth CPNG would have to generate in order to justify its current share price levels.</p><ul>
<li>$39.95 represents the stock's 78.6% Fibonacci Retracement level which became resistance since it was breached on May 6 on intra-day basis and confirmed on May 7 close.</li>
<li>Taking current consensus 3-year EBITDA and Free Cash Flow Forecasts, with a 20% target Debt ratio in the mix, a DCF analysis suggests that current share price level would be sustainable on a terminal growth range of 9.6-10.1%. A terminal growth rate of 2% would suggest a $5.00 share price, on the other hand.</li>
</ul><p>In a flattening yield curve environment, we believe the market would not have much objections to 8-9% terminal growth assumptions at a practical level even though analysts would sound alarm bells. However, at this juncture we believe investors should pay heed to whether inflationary concerns will continue to lead to a steepening yield curve, thereby creating continuing headwinds for CPNG's share price performance over the next 3 to 6 months.</p>

CPNG's shares declined by 9.3% on May 13, the day following its 1Q21 earnings release, but has since recovered its loss as of close on May 17. A key question should be whether this represents a dead cat bounce, or whether it represents the beginning of a sustainable share price recovery?Without reliable technical parameters established, we mainly rely on two factors, namely Fibonnaci retracement levels and a DCF analysis based on current consensus forecasts to determine how much growth CPNG would have to generate in order to justify its current share price levels.
$39.95 represents the stock's 78.6% Fibonacci Retracement level which became resistance since it was breached on May 6 on intra-day basis and confirmed on May 7 close.
Taking current consensus 3-year EBITDA and Free Cash Flow Forecasts, with a 20% target Debt ratio in the mix, a DCF analysis suggests that current share price level would be sustainable on a terminal growth range of 9.6-10.1%. A terminal growth rate of 2% would suggest a $5.00 share price, on the other hand.
In a flattening yield curve environment, we believe the market would not have much objections to 8-9% terminal growth assumptions at a practical level even though analysts would sound alarm bells. However, at this juncture we believe investors should pay heed to whether inflationary concerns will continue to lead to a steepening yield curve, thereby creating continuing headwinds for CPNG's share price performance over the next 3 to 6 months.

CPNG: Dead Cat Bounce or a More Sustainable Price Recovery in the Cards?

We aggregate key quotes from earnings, The Transcript

The Transcript

We aggregate key quotes from earnings

Aggregate Key Quotes from Earnings

Thematic (Sector/Industry)

<p>The economy is booming and everyone should enjoy it. The American economy is benefitting from tremendous amounts of pent-up demand and in some of the hardest-hit industries' activity is beginning to tick back up above 2019 levels. Along with that boom, there are clear signs of inflation and concerns about overheating. Even Janet Yellen seemed concerned for a few hours last week.</p>

The economy is booming and everyone should enjoy it. The American economy is benefitting from tremendous amounts of pent-up demand and in some of the hardest-hit industries' activity is beginning to tick back up above 2019 levels. Along with that boom, there are clear signs of inflation and concerns about overheating. Even Janet Yellen seemed concerned for a few hours last week.

United States

Etsy, Inc. provides e-commerce services. The Company offers handmade and vintage items, art, and supplies, as well as regular items such as clothing, housewares, paper goods, candles, bags and purses, music, and wood working items. Etsy serves users throughout the United States.

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Etsy Inc (ETSY US)

AiHuiShou IPO - Priced to Go but Won't Do a Kanzhun

Aihuishou (RERE US), China’s largest pre-owned consumer electronics transactions and services platform, aims to raise up to US$243m via a US...

Sumeet Singh

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

AiHuiShou Pre-IPO - First Stab at Valuation

Aihuishou (RERE US), China’s largest pre-owned consumer electronics transactions and services platform, aims to raise up to US$1bn via a US...

Sumeet Singh

CPNG: Dead Cat Bounce or a More Sustainable Price Recovery in the Cards?

We look at Fibonnaci Retracement levels and DCF analysis using consensus forecast to see whether price recovery in the last 2 trading sessions...

Henry Kwon

The Transcript 05.10.21: Pent-up Demand

The economy is booming and everyone should enjoy it. The American economy is benefitting from tremendous amounts of pent-up demand and in some of...

The Transcript

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