Equity Analyst, LightStream Research

Oshadhi Kumarasiri

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

Roofoods Ltd, the company behind the on-demand food delivery service <a href="https://www.smartkarma.com/entities/roofoods-ltd" target="_blank" data-smartkarma-citation="entities:27468:1" rel="noopener">Deliveroo (1022770D LN)</a>, plans to raise around £1.0bn ($1.4bn) via an IPO on the London Stock Exchange over the next few weeks. The company had a private market valuation of $7.0bn in July last year, and various media reports suggests that the valuation could increase by about $3.0bn to $10.0bn following the IPO.The food delivery industry’s medium to long term growth potential may not concern investors for now, but the competition and the lack of profitability might become a big concern, especially if the current tech bubble bursts anytime soon.Deliveroo made a net loss of £226.4m in 2020, which is about 19.0% of revenue compared to <a href="https://www.smartkarma.com/entities/just-eat-takeaway-908587b0-d4c9-488a-801b-2910cf29e24b" target="_blank" data-smartkarma-citation="entities:28360:1" rel="noopener">Just Eat Takeaway (TKWY NA)</a>’s 2020 net loss of €151.0m (£129.9m) and net margin of -7.4%.We see Deliveroo’s path to profitability being blocked by excessive competition. Therefore, we are not 100% confident on Deliveroo’s business model to consider it as a as a long-term investment. That said, all these recent high profile tech IPOs had excellent stock market debuts. If priced decently, it is difficult to think that a famous IPO like Deliveroo will not provide similar upside on trading debut.

Roofoods Ltd, the company behind the on-demand food delivery service Deliveroo (1022770D LN), plans to raise around £1.0bn ($1.4bn) via an IPO on the London Stock Exchange over the next few weeks. The company had a private market valuation of $7.0bn in July last year, and various media reports suggests that the valuation could increase by about $3.0bn to $10.0bn following the IPO.The food delivery industry’s medium to long term growth potential may not concern investors for now, but the competition and the lack of profitability might become a big concern, especially if the current tech bubble bursts anytime soon.Deliveroo made a net loss of £226.4m in 2020, which is about 19.0% of revenue compared to Just Eat Takeaway (TKWY NA)’s 2020 net loss of €151.0m (£129.9m) and net margin of -7.4%.We see Deliveroo’s path to profitability being blocked by excessive competition. Therefore, we are not 100% confident on Deliveroo’s business model to consider it as a as a long-term investment. That said, all these recent high profile tech IPOs had excellent stock market debuts. If priced decently, it is difficult to think that a famous IPO like Deliveroo will not provide similar upside on trading debut.

Deliveroo IPO: Plagued With Intense Competition

Independent Research, Food Delivery Space, Newmoon Capital

Newmoon Capital

Independent Research, Food Delivery Space

We look for owner-operators in what we believe are either highly defensible assets or soon to be highly defensible assets, trading at a fraction of their future potential.

Private Capital Markets

Judging from the twitter DMs, several of my points from my previous post have gone over the head of some investors, particularly the one around Signature (white label delivery). Deliveroo is at risk of getting disrupted because a large proportion of its orders/sales are from a small selection of chain restaurants — 10 chains represent 35% of ALL UK orders. Some of such chains include Nando’s, Wagamama, and McDonalds. The top 100 chains could easily be more than 50% of the UK business, if not much more. This is the case (if not moreso) for Uber Eats, and less the case for $TKWY.

Judging from the twitter DMs, several of my points from my previous post have gone over the head of some investors, particularly the one around Signature (white label delivery). Deliveroo is at risk of getting disrupted because a large proportion of its orders/sales are from a small selection of chain restaurants — 10 chains represent 35% of ALL UK orders. Some of such chains include Nando’s, Wagamama, and McDonalds. The top 100 chains could easily be more than 50% of the UK business, if not much more. This is the case (if not moreso) for Uber Eats, and less the case for $TKWY.

Deliveroo Part 6 - White Label Killed the Delivery Star

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Established in 2013, Deliveroo is getting ready to complete its IPO on the London Stock Exchange in the next several weeks. Backed by <a href="https://www.smartkarma.com/entities/amazon-com-inc" target="_blank" data-smartkarma-citation="entities:409:1" rel="noopener">Amazon.com Inc (AMZN US)</a>, Deliveroo is one of the largest food delivery service companies in the U.K. Amazon owns a 16% stake in Deliveroo. The Deliveroo IPO is expected to be one of the biggest IPOs in the U.K. this year. It has been reported that the market that the company's market cap post IPO could be nearly <a href="https://edition.cnn.com/2021/03/08/investing/deliveroo-ipo-london/index.html" target="_blank" rel="noopener">$7 billion to $10 billion. </a>Deliveroo processed £4.1 billion ($5.7 billion) in total transactions on its platform in 2020, up 64% YoY. Adjusted EBITDA/GTV ratio improved significantly from -122.7% in 2019 to -2.7% in 2020. <div class="content-highlight">Comparison With DoorDash's Market Cap/GOV and Deliveroo's Implied Market Cap - DoorDash currently has a market cap of $43.7 billion. DoorDash had total marketplace GOV (gross order value) of $24.7 billion. If we divide market cap/GOV, this results in a ratio of 1.8x. If we use this multiple (1.8x) and apply it to Deliveroo's total gross transactional value of £4.1 billion ($5.7 billion), this results in an implied market cap of $10 billion for Deliveroo. </div>

Established in 2013, Deliveroo is getting ready to complete its IPO on the London Stock Exchange in the next several weeks. Backed by Amazon.com Inc (AMZN US), Deliveroo is one of the largest food delivery service companies in the U.K. Amazon owns a 16% stake in Deliveroo. The Deliveroo IPO is expected to be one of the biggest IPOs in the U.K. this year. It has been reported that the market that the company's market cap post IPO could be nearly $7 billion to $10 billion. Deliveroo processed £4.1 billion ($5.7 billion) in total transactions on its platform in 2020, up 64% YoY. Adjusted EBITDA/GTV ratio improved significantly from -122.7% in 2019 to -2.7% in 2020. Comparison With DoorDash's Market Cap/GOV and Deliveroo's Implied Market Cap - DoorDash currently has a market cap of $43.7 billion. DoorDash had total marketplace GOV (gross order value) of $24.7 billion. If we divide market cap/GOV, this results in a ratio of 1.8x. If we use this multiple (1.8x) and apply it to Deliveroo's total gross transactional value of £4.1 billion ($5.7 billion), this results in an implied market cap of $10 billion for Deliveroo. 

TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Equity Bottom-Up

DoorDash’s first earnings call confirmed many of the concerns from our initiation. The key point for 2021? We think estimates that came up to reflect the easy COVID comp for 1Q21 will fall the rest of the year as COVID recedes, which will result in the rising customer acquisition costs cited in 4Q and 2021 meeting falling LTVs as customers return to dining out. DoorDash is likely to continually underperform expectations.Why do we think DoorDash is worth maybe half its current valuation?We’ll leave it to “NEUTRAL” rated Goldman Sachs to sum it up, “With the stock trading near 20x 2022E EV/Gross Profit vs. GSe 28% 3-year Gross Profit CAGR compared to the peer average of 10x on 30% growth we believe much of that opportunity is reflected in the current valuation. Therefore, we remain Neutral rated, while our 12-month price target goes to $145 from $135 to reflect revised estimates and current comp multiples.”As always, if you can’t explain why one company is worth 2x more then all its peers…it’s a neutral.<div class="content-highlight">Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.</div>

DoorDash’s first earnings call confirmed many of the concerns from our initiation. The key point for 2021? We think estimates that came up to reflect the easy COVID comp for 1Q21 will fall the rest of the year as COVID recedes, which will result in the rising customer acquisition costs cited in 4Q and 2021 meeting falling LTVs as customers return to dining out. DoorDash is likely to continually underperform expectations.Why do we think DoorDash is worth maybe half its current valuation?We’ll leave it to “NEUTRAL” rated Goldman Sachs to sum it up, “With the stock trading near 20x 2022E EV/Gross Profit vs. GSe 28% 3-year Gross Profit CAGR compared to the peer average of 10x on 30% growth we believe much of that opportunity is reflected in the current valuation. Therefore, we remain Neutral rated, while our 12-month price target goes to $145 from $135 to reflect revised estimates and current comp multiples.”As always, if you can’t explain why one company is worth 2x more then all its peers…it’s a neutral.Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.

DoorDash 4Q20 Earnings: This Is a Business Worth $50B?

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

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The goal of this new product is to monitor the progress of upcoming and recently-completed IPOs and deals in the Asian logistics, transportation and travel space. We'll also look at deals in related segments, including eCommerce fulfillment, ride-hailing, online food delivery, and warehousing.
Each issue will feature news and commentary on planned IPOs and other major deals in the logistics space, plus an update on the performance of recent IPOs and deals. We'll also profile a prominent private Asian company in the sector that could soon seek a public listing.  
In this issue we review planned listings from <a href="https://www.smartkarma.com/entities/dida-inc" target="_blank" data-smartkarma-citation="entities:29701:1" rel="noopener">Dida (DIDA HK)</a> and <a href="https://www.smartkarma.com/entities/zim-integrated-shipping-services-ltd" target="_blank" data-smartkarma-citation="entities:31124:1" rel="noopener">ZIM Integrated Shipping Services (ZIM US)</a>, check in on the share performance of four recent logistics-related IPOs, and introduce private Hive-Box Holdings (HBH), the world's largest operator of smart lockers.




The goal of this new product is to monitor the progress of upcoming and recently-completed IPOs and deals in the Asian logistics, transportation and travel space. We'll also look at deals in related segments, including eCommerce fulfillment, ride-hailing, online food delivery, and warehousing.
Each issue will feature news and commentary on planned IPOs and other major deals in the logistics space, plus an update on the performance of recent IPOs and deals. We'll also profile a prominent private Asian company in the sector that could soon seek a public listing.  
In this issue we review planned listings from Dida (DIDA HK) and ZIM Integrated Shipping Services (ZIM US), check in on the share performance of four recent logistics-related IPOs, and introduce private Hive-Box Holdings (HBH), the world's largest operator of smart lockers. 

TRACKING TRAFFIC/Logistics Capital Markets Monitor | IPOs | M&A | Pre-IPO Profile: Hive-Box Holdings

United Kingdom

Just Eat Takeaway.com N.V. is an online food ordering company. The Company offers mobile application for ordering and delivering of food and beverages. Just Eat Takeaway.com serves customers worldwide.

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Just Eat Takeaway.com NV (TKWY NA)

Deliveroo IPO: Plagued With Intense Competition

Deliveroo’s track record regarding its financial discipline is not that great. The company has raised around £0.9bn over seven funding rounds...

Oshadhi Kumarasiri

Deliveroo Part 6 - White Label Killed the Delivery Star

Deliveroo is at risk of getting disrupted because a large proportion of its orders/sales are from a small selection of chain restaurants — 10...

Newmoon Capital

Initial Thoughts on the Deliveroo IPO

Deliveroo IPO is expected to be one of the biggest IPOs in the U.K. this year. The company's market cap post IPO could be nearly $7 billion to $10...

Douglas Kim

DoorDash 4Q20 Earnings: This Is a Business Worth $50B?

DoorDash's 4Q20 earnings confirmed our bearish thesis. The company is continuing to spend higher and higher amounts on customer acquisition due to...

Aaron Gabin

TRACKING TRAFFIC/Logistics Capital Markets Monitor | IPOs | M&A | Pre-IPO Profile: Hive-Box Holdings

In this week's Logistics Capital Markets Monitor: updates on ZIM and DiDa ChuXing IPOs, performance of recent IPOs in the Logistics space, and a...

Tracking Traffic

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