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

Lalatech Holdings Co Ltd / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/lalatech-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:36848:1" rel="noopener">Lalatech Holdings Co Ltd (LALA HK)</a> is a technology driven logistics transportation platform with a global footprint. The company has filed for an IPO and plans to raise about US$1bn.</li>
<li>The company’s financials have shown significant improvement over the last 2 years with the company turning profitable at the operating profit line in 2022.</li>
<li>Huge drop in selling and marketing costs have helped cut down losses which seems too realistic and the company hasn’t provided sufficient explanation on these cost cuts.</li>
</ul>



Lalatech Holdings Co Ltd (LALA HK) is a technology driven logistics transportation platform with a global footprint. The company has filed for an IPO and plans to raise about US$1bn.
The company’s financials have shown significant improvement over the last 2 years with the company turning profitable at the operating profit line in 2022.
Huge drop in selling and marketing costs have helped cut down losses which seems too realistic and the company hasn’t provided sufficient explanation on these cost cuts.


Lalatech IPO: Huge Drop in Operating Costs Prior to IPO Is Concerning

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/gogox-holdings" target="_blank" data-smartkarma-citation="entities:35556:1" rel="noopener">GoGoX Holdings (GOGO HK)</a> is a major online intra-city logistics platform in Asia. It has passed the listing hearing for an HKEx IPO to raise US$100-150 million.   </li>
<li>In <a href="https://www.smartkarma.com/insights/gogox-ipo-initiation-a-less-than-perfect-delivery" target="_blank" data-smartkarma-citation="insights:64922" rel="noopener">GOGOX IPO Initiation: A Less than Perfect Delivery</a>, we noted that as the losses are expected to persist over the next three years, we would avoid the IPO.</li>
<li>In this note, we examine the PHIP for the 2021 results and recent developments. The fundamentals remain unattractive and we would give the IPO a pass. </li>
</ul>



GoGoX Holdings (GOGO HK) is a major online intra-city logistics platform in Asia. It has passed the listing hearing for an HKEx IPO to raise US$100-150 million.   
In GOGOX IPO Initiation: A Less than Perfect Delivery, we noted that as the losses are expected to persist over the next three years, we would avoid the IPO.
In this note, we examine the PHIP for the 2021 results and recent developments. The fundamentals remain unattractive and we would give the IPO a pass. 


<ul>
<li>
<a href="https://www.smartkarma.com/entities/gogox-holdings" target="_blank" data-smartkarma-citation="entities:35556:1" rel="noopener">GoGoX Holdings (GOGO HK)</a> is a major online intra-city logistics platform in Asia. It is pre-marketing an HKEx IPO to raise US$200 million, according to press reports.   </li>
<li>The fundamentals are unattractive as intensifying competition is pressuring growth, increasing losses and spurring cash burn.   </li>
<li>As the losses and cash burn is expected to persist over the next three years, we would give the IPO a pass. </li>
</ul>



GoGoX Holdings (GOGO HK) is a major online intra-city logistics platform in Asia. It is pre-marketing an HKEx IPO to raise US$200 million, according to press reports.   
The fundamentals are unattractive as intensifying competition is pressuring growth, increasing losses and spurring cash burn.   
As the losses and cash burn is expected to persist over the next three years, we would give the IPO a pass. 


GOGOX IPO Initiation: A Less than Perfect Delivery

Full Truck Alliance   / Equity Capital Markets

<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>  has announced the indicative price range for its US IPO and the company is planning to sell 82.5 ADSs (7.6% of the ordinary shares outstanding) at an indicative price range of US$17-19 per ADS. In addition, Ontario Teachers’ Pension Plan Board and an entity affiliated with Mubadala Investment have agreed to purchase US$100m each of the company’s ordinary shares at a concurrent private placement.</p><p>At the midpoint of the IPO price of US$18 per ADS, the company will raise net proceeds of US$1,620.7m (each ADS represents 20 ordinary shares of the company) from the IPO and the concurrent private placement at a market capitalisation of US$19.6bn and a post-money enterprise value of US$15.1bn.</p><p>One of Full Truck Alliance's (FTA) existing shareholders, Fidelity International (US$100m) and Invesco Ltd. (US$500m) have agreed to purchase up to US$600m of the ADSs offered at this IPO (about 40% of the gross proceeds at the midpoint of the IPO price). FTA plans to use 40% of net proceeds from the IPO and concurrent private placement on infrastructure development and technology innovation, another 40% on expanding its offerings and the remaining net proceeds on general corporate purposes.</p>

Full Truck Alliance (YMM US)  has announced the indicative price range for its US IPO and the company is planning to sell 82.5 ADSs (7.6% of the ordinary shares outstanding) at an indicative price range of US$17-19 per ADS. In addition, Ontario Teachers’ Pension Plan Board and an entity affiliated with Mubadala Investment have agreed to purchase US$100m each of the company’s ordinary shares at a concurrent private placement.At the midpoint of the IPO price of US$18 per ADS, the company will raise net proceeds of US$1,620.7m (each ADS represents 20 ordinary shares of the company) from the IPO and the concurrent private placement at a market capitalisation of US$19.6bn and a post-money enterprise value of US$15.1bn.One of Full Truck Alliance's (FTA) existing shareholders, Fidelity International (US$100m) and Invesco Ltd. (US$500m) have agreed to purchase up to US$600m of the ADSs offered at this IPO (about 40% of the gross proceeds at the midpoint of the IPO price). FTA plans to use 40% of net proceeds from the IPO and concurrent private placement on infrastructure development and technology innovation, another 40% on expanding its offerings and the remaining net proceeds on general corporate purposes.

Full Truck Alliance IPO: Peer Comparison and Valuation

<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>, known as <em>Manbang</em> in China, is the world’s largest digital freight platform by gross transaction value (GTV) in 2020, according to CIC. FTA was formed in 2017 through the merger of <em>Yunmanman</em> and <em>Huochebang</em>, which were founded in 2013 and 2011, respectively. FTA is backed by SoftBank Vision Fund (22.2% of the outstanding shares), Sequoia Capital (7.2%), Hillhouse 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>. </p>
<p>At the mid-point of the proposed IPO price range of $17.00-19.00 per ADS, FTA will have a market cap of $19.6 billion. FTA will also raise an additional $200 million in concurrent private placements to Ontario Teachers' Pension Plan Board and Mubadala Investment Company. At the mid-point of the IPO price range and including the concurrent private placement, the net proceeds are $1,620.7 million. FTA has received indications of interest from Fidelity ($100 million) and Invesco ($500 million). </p>
</div><div><p>In <a href="https://www.smartkarma.com/insights/full-truck-alliance-ipo-initiation-a-less-than-perfect-delivery" target="_blank" data-smartkarma-citation="insights:52399" rel="noopener">Full Truck Alliance IPO Initiation: A Less than Perfect Delivery</a>, we stated that at first sight, FTA recent results look stunning due to fast-paced growth, improving margin and cash generation. However, a closer look, suggests that FTA has less than ideal disclosure, a regulatory overhang and potential corporate governance issues. We concluded that we cannot recommend FTA wholeheartedly and inclined to watch this IPO unfold from the sidelines.   </p></div><div><div>
<div class="content-highlight"><p>Our valuation analysis suggests that FTA trades at frothy multiples (EV/Sales and growth adjusted EV/Sales) compared to its peers. On the other hand, the indications of interest and the concurrent placing with blue-chip investors suggest that the IPO price range is grounded in some logic. We think that the IPO pricing seems reasonable based on recent share repurchases and the PEG multiple. While the recent first-day pops suggest an awakening of IPO animal spirits, we remain uncomfortable in recommending FTA based on our previously highlighted concerns and a rich valuation. </p></div>
<p><em><strong>For readers interested in peer</strong></em>, <a href="https://www.smartkarma.com/entities/foru-worldwide-inc" target="_blank" data-smartkarma-citation="entities:33314:1" rel="noopener">ForU Worldwide (FOYO US)</a>, which also recently filed for a $500 million Nasdaq IPO, we highlight our note - <a href="https://www.smartkarma.com/insights/foru-worldwide-ipo-initiation-not-foru" target="_blank" data-smartkarma-citation="insights:51888" rel="noopener">ForU Worldwide IPO Initiation: Not ForU</a>  </p>
</div></div>


Full Truck Alliance (YMM US), known as Manbang in China, is the world’s largest digital freight platform by gross transaction value (GTV) in 2020, according to CIC. FTA was formed in 2017 through the merger of Yunmanman and Huochebang, which were founded in 2013 and 2011, respectively. FTA is backed by SoftBank Vision Fund (22.2% of the outstanding shares), Sequoia Capital (7.2%), Hillhouse and Tencent (700 HK). 
At the mid-point of the proposed IPO price range of $17.00-19.00 per ADS, FTA will have a market cap of $19.6 billion. FTA will also raise an additional $200 million in concurrent private placements to Ontario Teachers' Pension Plan Board and Mubadala Investment Company. At the mid-point of the IPO price range and including the concurrent private placement, the net proceeds are $1,620.7 million. FTA has received indications of interest from Fidelity ($100 million) and Invesco ($500 million). 
In Full Truck Alliance IPO Initiation: A Less than Perfect Delivery, we stated that at first sight, FTA recent results look stunning due to fast-paced growth, improving margin and cash generation. However, a closer look, suggests that FTA has less than ideal disclosure, a regulatory overhang and potential corporate governance issues. We concluded that we cannot recommend FTA wholeheartedly and inclined to watch this IPO unfold from the sidelines.   
Our valuation analysis suggests that FTA trades at frothy multiples (EV/Sales and growth adjusted EV/Sales) compared to its peers. On the other hand, the indications of interest and the concurrent placing with blue-chip investors suggest that the IPO price range is grounded in some logic. We think that the IPO pricing seems reasonable based on recent share repurchases and the PEG multiple. While the recent first-day pops suggest an awakening of IPO animal spirits, we remain uncomfortable in recommending FTA based on our previously highlighted concerns and a rich valuation. 
For readers interested in peer, ForU Worldwide (FOYO US), which also recently filed for a $500 million Nasdaq IPO, we highlight our note - ForU Worldwide IPO Initiation: Not ForU  


Full Truck Alliance IPO: Valuation Insights

China

ForU Worldwide Inc. provides software solutions. The Company offers road freight transportation 
platform connecting shippers and carriers to digitalize the entire road freight transportation 
process. ForU Worldwide serves customers worldwide.

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ForU Worldwide (FOYO US)

Lalatech IPO: Huge Drop in Operating Costs Prior to IPO Is Concerning

Lalatech has refiled for an IPO on the HKEx and this insight discusses the company's business model and financials. We will discuss new data points...

Shifara Samsudeen, ACMA, CGMA

GOGOX IPO: Growth at All Costs

GOGOX has passed the listing hearing for an HKEx IPO to raise US$100-150m. The fundamentals remain unattractive and we would give the IPO a pass.

Arun George

GOGOX IPO Initiation: A Less than Perfect Delivery

GOGOX is pre-marketing an HKEx IPO to raise US$200 million, according to press reports. We believe that the fundamentals are unattractive and we...

Arun George

Full Truck Alliance IPO: Peer Comparison and Valuation

FTA's implied valuation multiples are at a lofty premium to peers even if we assume a 100% revenue CAGR between 2020-22E. FTA's growth prospects do...

Shifara Samsudeen, ACMA, CGMA

Full Truck Alliance IPO: Valuation Insights

While the recent first-day pops suggest an awakening of IPO animal spirits, we remain uncomfortable in recommending FTA based on our previously...

Arun George

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