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

Bukalapak.com PT Tbk / Equity Capital Markets

<div>
<p><a href="https://www.smartkarma.com/entities/bukalapak" target="_blank" data-smartkarma-citation="entities:33575:1" rel="noopener">Bukalapak (BUKA IJ)</a>, which means 'opening a kiosk' in Indonesian, is a leading e-commerce player in non-Tier 1 cities in Indonesia, with a market share of 35% in 2020 based on GMV (gross merchandise value), according to Frost &amp; Sullivan. </p>
<p>Bukalapak will price its IPO at the top-end of its indicative price range of Rp750-850 per share, according to press reports. Bukalapak will raise Rp22 trillion ($1.5 billion) which will be Indonesia's largest-ever IPO. The shares are set to list on 6 August. </p>
</div><div><p>In <a href="https://www.smartkarma.com/insights/bukalapak-ipo-initiation-island-shopping" target="_blank" data-smartkarma-citation="insights:54584" rel="noopener">Bukalapak IPO Initiation: Island Shopping</a>, we noted that like its peers, Bukalapak is benefiting from the accelerating adoption of e-commerce in Indonesia. Bukalapak’s strategy of focusing on consumers in the non-Tier 1 area and the mass market in the Tier 1 area results in a relatively small overlap (less than 20%) between its customers and customers of other online marketplaces such as <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a>'s Shopee, <a href="https://www.smartkarma.com/entities/tokopedia-pt" target="_blank" data-smartkarma-citation="entities:24239:1" rel="noopener">Tokopedia PT (1087142D IJ)</a> and <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a>'s Lazada. Competitors generally target the affluent segment of the market. We concluded that Bukalapak's fundamentals tick all the right boxes of rising monetisation, lower losses and declining cash burn, in our view. </p></div><div class="content-highlight"><p>Our valuation analysis suggests that the IPO price range is attractive. Overall, we would participate in the IPO.</p></div>


Bukalapak (BUKA IJ), which means 'opening a kiosk' in Indonesian, is a leading e-commerce player in non-Tier 1 cities in Indonesia, with a market share of 35% in 2020 based on GMV (gross merchandise value), according to Frost &amp; Sullivan. 
Bukalapak will price its IPO at the top-end of its indicative price range of Rp750-850 per share, according to press reports. Bukalapak will raise Rp22 trillion ($1.5 billion) which will be Indonesia's largest-ever IPO. The shares are set to list on 6 August. 
In Bukalapak IPO Initiation: Island Shopping, we noted that like its peers, Bukalapak is benefiting from the accelerating adoption of e-commerce in Indonesia. Bukalapak’s strategy of focusing on consumers in the non-Tier 1 area and the mass market in the Tier 1 area results in a relatively small overlap (less than 20%) between its customers and customers of other online marketplaces such as Sea Ltd (SE US)'s Shopee, Tokopedia PT (1087142D IJ) and Alibaba Group (BABA US)'s Lazada. Competitors generally target the affluent segment of the market. We concluded that Bukalapak's fundamentals tick all the right boxes of rising monetisation, lower losses and declining cash burn, in our view. Our valuation analysis suggests that the IPO price range is attractive. Overall, we would participate in the IPO.

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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 Bottom-Up

Alibaba Group Holding  / Equity Bottom-Up

<ul class="">
<li>We believe China online retail growth rate accelerated in May and June 2021 compared to the same months in 2019.</li>
<li>In 2021, e-commerce apps managed to retain most users who started online shopping during the lockdown in 2020.</li>
<li>The YoY growth rates are misleading. It is a mistake that online shopping is slowing down after the pandemic has eased in China.</li>
</ul>


We believe China online retail growth rate accelerated in May and June 2021 compared to the same months in 2019.
In 2021, e-commerce apps managed to retain most users who started online shopping during the lockdown in 2020.
The YoY growth rates are misleading. It is a mistake that online shopping is slowing down after the pandemic has eased in China.


Alibaba (BABA): China E-Commerce Growth Rate Not Declining, But Accelerating

IPO and L/S equity, 2015 Starmine top stock picker, Global Equity Research Ltd

Rickin Thakrar

IPO and L/S equity, 2015 Starmine top stock picker

<p>We believe a critical quarter looms for JD.com. The company will face the first in a series of brutally tough quarterly comps from last year. In addition, we believe further scrutiny is likely to arise on the durability of JD.com’s cash flow which started to show weakness in 1Q21. We provide an early preview as investors may also look through to other companies as an early read-across for JD.com</p>

We believe a critical quarter looms for JD.com. The company will face the first in a series of brutally tough quarterly comps from last year. In addition, we believe further scrutiny is likely to arise on the durability of JD.com’s cash flow which started to show weakness in 1Q21. We provide an early preview as investors may also look through to other companies as an early read-across for JD.com

Jd.com – a Critical Quarter on the Horizon

<p><a href="https://www.smartkarma.com/entities/bukalapak" target="_blank" data-smartkarma-citation="entities:33575:1" rel="noopener">Bukalapak (BUKA IJ)</a>, which means 'opening a kiosk' in Indonesian, is a leading e-commerce player in non-Tier 1 cities in Indonesia, with a market share of 35% in 2020 based on GMV (gross merchandise value), according to Frost &amp; Sullivan. Bukalapak carries out its main business activities through the mobile platform <em>Bukalapak</em> and <em>Bukalapak Partners</em>. Bukalapak has increased its IPO size by about a third to $1.5 billion due to strong demand, according to press reports. Bookbuilding will close on 19 July and the shares are set to list on 6 August. </p><p>The COVID-19 pandemic has accelerated the rate of e-commerce adoption in Indonesia as more consumers are reluctant to travel and started changing their shopping habits to online shopping, due to personal preferences or lockdown restrictions. The share of e-commerce of total retail spending in Indonesia has grown from 5.6% in 2017 to around 22% in 2020 and will reach 35.9% in 2025, according to Frost &amp; Sullivan. </p><div class="content-highlight"><p>Like its peers, Bukalapak is benefiting from this market tailwind. Bukalapak’s strategy of focusing on consumers in the non-Tier 1 area and the mass market in the Tier 1 area results in a relatively small overlap (less than 20%) between its customers and customers of other online marketplaces such as <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a>'s Shopee, <a href="https://www.smartkarma.com/entities/tokopedia-pt" target="_blank" data-smartkarma-citation="entities:24239:1" rel="noopener">Tokopedia PT (1087142D IJ)</a> and <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a>'s Lazada. Competitors generally target the affluent segment of the market. Overall, Bukalapak's fundamentals tick all the right boxes of rising monetisation, lower losses and declining cash burn, in our view. We will discuss valuation in our next note. </p></div>

Bukalapak (BUKA IJ), which means 'opening a kiosk' in Indonesian, is a leading e-commerce player in non-Tier 1 cities in Indonesia, with a market share of 35% in 2020 based on GMV (gross merchandise value), according to Frost &amp; Sullivan. Bukalapak carries out its main business activities through the mobile platform Bukalapak and Bukalapak Partners. Bukalapak has increased its IPO size by about a third to $1.5 billion due to strong demand, according to press reports. Bookbuilding will close on 19 July and the shares are set to list on 6 August. The COVID-19 pandemic has accelerated the rate of e-commerce adoption in Indonesia as more consumers are reluctant to travel and started changing their shopping habits to online shopping, due to personal preferences or lockdown restrictions. The share of e-commerce of total retail spending in Indonesia has grown from 5.6% in 2017 to around 22% in 2020 and will reach 35.9% in 2025, according to Frost &amp; Sullivan. Like its peers, Bukalapak is benefiting from this market tailwind. Bukalapak’s strategy of focusing on consumers in the non-Tier 1 area and the mass market in the Tier 1 area results in a relatively small overlap (less than 20%) between its customers and customers of other online marketplaces such as Sea Ltd (SE US)'s Shopee, Tokopedia PT (1087142D IJ) and Alibaba Group (BABA US)'s Lazada. Competitors generally target the affluent segment of the market. Overall, Bukalapak's fundamentals tick all the right boxes of rising monetisation, lower losses and declining cash burn, in our view. We will discuss valuation in our next note. 

Bukalapak IPO Initiation: Island Shopping

<ul>
<li>Apps are over-crowded in mobile handsets and the time of mini-program is coming.</li>
<li>WeChat is the largest mini-program platform.</li>
<li>We raise a case of the competition between Meituan and Ele.me.</li>
<li>Other companies also use mini-program to introduce users to their apps.</li>
</ul>


Apps are over-crowded in mobile handsets and the time of mini-program is coming.
WeChat is the largest mini-program platform.
We raise a case of the competition between Meituan and Ele.me.
Other companies also use mini-program to introduce users to their apps.


Tencent (700 HK): Meituan Wins in Mini-Program, But Actually Tencent Wins

China

JD.com, Inc. is an online direct sales company in China. The Company offers a wide selection of products through its website and mobile applications. JD.com sells appliances, computers, digital products, communication products, garments, books, and household items to consumers and vendors.

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JD.com (9618 HK)

Bukalapak IPO: Valuation Insights

Bukalapak will price its IPO at the top-end of its indicative price range of Rp750-850 per share, according to press reports. Our valuation...

Arun George

Alibaba (BABA): China E-Commerce Growth Rate Not Declining, But Accelerating

We believe China online retail growth rate accelerated in May and June 2021 compared to 2019. In 2021, e-commerce apps keep most users who started...

Ming Lu

Jd.com – a Critical Quarter on the Horizon

We believe a critical quarter looms for JD.com. The company will face the first in a series of brutally tough quarterly comps from last year.

Rickin Thakrar

Bukalapak IPO Initiation: Island Shopping

Bukalapak has increased its IPO size by about a third to $1.5 billion due to strong demand. Its fundamentals tick all the right boxes of rising...

Arun George

Tencent (700 HK): Meituan Wins in Mini-Program, But Actually Tencent Wins

Apps are over-crowded in mobile handsets and the time of mini-program is coming. WeChat is the largest mini-program platform. We raise a case of...

Ming Lu

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