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

<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 <em>AHS Recycle</em> (an omnichannel business for the collection of pre-owned consumer electronics), <em>PJT Marketplace</em> (B2B channel) and <em>Paipai Marketplace</em> (B2C channel). </p></div><div>
<p>At the mid-point of the proposed IPO price range of $13.00-15.00 per ADS, AiHuiShou will have a market cap of $3.1 billion. At the mid-point of the IPO price range, the net proceeds are $205.7 million. The raise is materially below the rumoured target raise of $500 million to $1 billion, according to press reports.</p>
<p>Existing shareholders have indicated a total of $100 million of the IPO (44.0% of the ADSs at the mid-point of the IPO price range). The indications of interest from <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a> and Tiger Global.</p>
<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.</p>
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<p>On a relative valuation basis and at the IPO price range, AiHuiShou is attractively valued on both an EV/Sales and growth adjusted EV/Sales multiples (an EV/Sales/Growth basis). Notably, the last funding round in May 2021 valued AiHuiShou at $19.43 per ordinary share, implying $12.96 per ADS which is broadly in line with the low-end of the IPO price range.</p>
<p>While the lower than expected raise suggest that AiHuiShou received lukewarm investor interest, yesterday's blistering first-day pop of <a href="https://www.smartkarma.com/entities/kanzhun-ltd" target="_blank" data-smartkarma-citation="entities:33368:1" rel="noopener">Kanzhun (BZ US)</a> suggests that the market may be warming up again to high-growth Chinese ADRs. Overall, we are inclined to participate. </p>
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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). 
At the mid-point of the proposed IPO price range of $13.00-15.00 per ADS, AiHuiShou will have a market cap of $3.1 billion. At the mid-point of the IPO price range, the net proceeds are $205.7 million. The raise is materially below the rumoured target raise of $500 million to $1 billion, according to press reports.
Existing shareholders have indicated a total of $100 million of the IPO (44.0% of the ADSs at the mid-point of the IPO price range). The indications of interest from JD.com Inc. (9618 HK) and Tiger Global.
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.

On a relative valuation basis and at the IPO price range, AiHuiShou is attractively valued on both an EV/Sales and growth adjusted EV/Sales multiples (an EV/Sales/Growth basis). Notably, the last funding round in May 2021 valued AiHuiShou at $19.43 per ordinary share, implying $12.96 per ADS which is broadly in line with the low-end of the IPO price range.
While the lower than expected raise suggest that AiHuiShou received lukewarm investor interest, yesterday's blistering first-day pop of Kanzhun (BZ US) suggests that the market may be warming up again to high-growth Chinese ADRs. Overall, we are inclined to participate. 


Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

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<p>Didi Chuxing (Didi) is getting ready to complete its IPO in the coming weeks. The company claims to be the world's largest mobility technology platform in terms of annual active users and by average daily transactions for the 12 months ended March 2021. </p>
<p>Didi is the number player for shared mobility services in China including ride hailing, taxi hailing, chauffeur, hitch, and other forms of shared mobility. The company operates in 15 countries globally and its platform provides services to over 493 million active annual users and powered 41 million average daily transactions for 12 months ended March 31, 2021.</p>
<p><a href="https://www.ft.com/content/bb80e462-fbb9-49d1-8a87-b3ad511c1d4e" target="_blank" rel="noopener">Didi Chuxing</a> was last valued at $65 billion in a 2018 fund raising round. Major investors in Didi include Softbank which has invested more than $10 billion in this company. Softbank's Vision Funds own a 21.5% stake in Didi Chuxing, followed by <a href="https://www.smartkarma.com/entities/uber-technologies-inc" target="_blank" data-smartkarma-citation="entities:430:1" rel="noopener">Uber (UBER US)</a> with a 12.8% stake, 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> which has a 6.8% stake. </p>
</div><p>The company's long term vision is to capitalize on AI and big data to power shared, electric, smart, and autonomous mobility networks. The company estimates the mobility service market was $6.7 trillion globally in 2020, which is expected to increase to $16.4 trillion in 2040. Shared mobility and electric vehicles penetration rates were 2% and 1%, respectively in 2020. Shared mobility and electric vehicles penetration rates are expected to reach 23.6% and 29.3%, respectively in 2040.</p>


Didi Chuxing (Didi) is getting ready to complete its IPO in the coming weeks. The company claims to be the world's largest mobility technology platform in terms of annual active users and by average daily transactions for the 12 months ended March 2021. 
Didi is the number player for shared mobility services in China including ride hailing, taxi hailing, chauffeur, hitch, and other forms of shared mobility. The company operates in 15 countries globally and its platform provides services to over 493 million active annual users and powered 41 million average daily transactions for 12 months ended March 31, 2021.
Didi Chuxing was last valued at $65 billion in a 2018 fund raising round. Major investors in Didi include Softbank which has invested more than $10 billion in this company. Softbank's Vision Funds own a 21.5% stake in Didi Chuxing, followed by Uber (UBER US) with a 12.8% stake, and Tencent (700 HK) which has a 6.8% stake. 
The company's long term vision is to capitalize on AI and big data to power shared, electric, smart, and autonomous mobility networks. The company estimates the mobility service market was $6.7 trillion globally in 2020, which is expected to increase to $16.4 trillion in 2040. Shared mobility and electric vehicles penetration rates were 2% and 1%, respectively in 2020. Shared mobility and electric vehicles penetration rates are expected to reach 23.6% and 29.3%, respectively in 2040.

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.

<p>The Chinese online recruitment platform <a href="https://www.smartkarma.com/entities/kanzhun-ltd" target="_blank" data-smartkarma-citation="entities:33368:1" rel="noopener">Kanzhun (BZ US)</a>  has priced its IPO at US$19 per ADS, at the upper end of the IPO price range of US$17-19 per ADS. Kanzhun will raise approx. US$912m at the above price of US$19 per ADS at a market capitalisation of US$7.6bn and a post-money enterprise value of US$5.98bn.</p><p> In our previous insights on the company's IPO, we examined Kanzhun's business model, financials, outlook and valuation.</p><p><a href="https://www.smartkarma.com/insights/kanzhun-ipo-hunt-for-success" target="_blank" data-smartkarma-citation="insights:52618" rel="noopener">Kanzhun IPO: Hunt for Success</a> </p><p><a href="https://www.smartkarma.com/insights/kanzhun-ipo-peer-comparison-and-valuation" target="_blank" data-smartkarma-citation="insights:52738" rel="noopener">Kanzhun IPO: Peer Comparison and Valuation</a> </p>

The Chinese online recruitment platform Kanzhun (BZ US)  has priced its IPO at US$19 per ADS, at the upper end of the IPO price range of US$17-19 per ADS. Kanzhun will raise approx. US$912m at the above price of US$19 per ADS at a market capitalisation of US$7.6bn and a post-money enterprise value of US$5.98bn. In our previous insights on the company's IPO, we examined Kanzhun's business model, financials, outlook and valuation.Kanzhun IPO: Hunt for Success Kanzhun IPO: Peer Comparison and Valuation 

Kanzhun IPO: Thoughts on First Day Trading

<div><p><a href="https://www.smartkarma.com/entities/kanzhun-ltd" target="_blank" data-smartkarma-citation="entities:33368:1" rel="noopener">Kanzhun (BZ US)</a> is the largest online recruitment platform in China, as measured by the average MAU in 2020, according to CIC. Its <em>BOSS Zhipin</em> mobile app connects job seekers and enterprise users. </p></div><div><p>Kanzhun has priced its IPO at $19.00 per ADS to raise gross proceeds of $912 million, <a href="https://www.ifre.com/story/2913154/kanzhun-prices-nasdaq-ipo-at-top-to-raise-us912m-smlgvfl3m3" target="_blank" rel="noopener">according to IFR</a>. At the final IPO price of $19 per share, Kanzhun will have a market cap of $7.6 billion. The IPO got off to a strong start due to indications of interest for $375 million worth of ADSs in the offering from existing investors (Sequoia Capital and Tiger Global) and new investors (UBS Asset Management, GIC and Mubadala Investment).</p></div><div><p>In <a href="https://www.smartkarma.com/insights/kanzhun-ipo-initiation-search-and-employ" target="_blank" data-smartkarma-citation="insights:51969" rel="noopener">Kanzhun IPO Initiation: Search and Employ</a>, we opined that Kanzhun’s strong growth in users and fast-paced revenue growth suggests another “growth at all costs” strategy. Encouragingly, the high revenue visibility, declining loss margin and cash generation suggest that Kanzhun can eventually deliver this growth profitability. We concluded that the Kanzhun story warrants a closer look. In <a href="https://www.smartkarma.com/insights/kanzhun-ipo-growth-margin-trade-off-vs-peers" target="_blank" data-smartkarma-citation="insights:52333" rel="noopener">Kanzhun IPO: Growth/Margin Trade-Off Vs Peers</a>, we opined that Kanzhun provides growth and revenue visibility vs margin and cash generation trade-off in comparison to its listed peers. In <a href="https://www.smartkarma.com/insights/kanzhun-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:52575" rel="noopener">Kanzhun IPO: Valuation Insights</a> we noted that the IPO price range is attractive. </p></div><div><div><div class="content-highlight"><p>Updating for the final IPO net raise, our base-case DCF derived price target of $21.02 per ADS. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis points to a meaningful upside based on achievable targets for market share and/or terminal EBIT margin. </p></div></div></div>

Kanzhun (BZ US) is the largest online recruitment platform in China, as measured by the average MAU in 2020, according to CIC. Its BOSS Zhipin mobile app connects job seekers and enterprise users. Kanzhun has priced its IPO at $19.00 per ADS to raise gross proceeds of $912 million, according to IFR. At the final IPO price of $19 per share, Kanzhun will have a market cap of $7.6 billion. The IPO got off to a strong start due to indications of interest for $375 million worth of ADSs in the offering from existing investors (Sequoia Capital and Tiger Global) and new investors (UBS Asset Management, GIC and Mubadala Investment).In Kanzhun IPO Initiation: Search and Employ, we opined that Kanzhun’s strong growth in users and fast-paced revenue growth suggests another “growth at all costs” strategy. Encouragingly, the high revenue visibility, declining loss margin and cash generation suggest that Kanzhun can eventually deliver this growth profitability. We concluded that the Kanzhun story warrants a closer look. In Kanzhun IPO: Growth/Margin Trade-Off Vs Peers, we opined that Kanzhun provides growth and revenue visibility vs margin and cash generation trade-off in comparison to its listed peers. In Kanzhun IPO: Valuation Insights we noted that the IPO price range is attractive. Updating for the final IPO net raise, our base-case DCF derived price target of $21.02 per ADS. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis points to a meaningful upside based on achievable targets for market share and/or terminal EBIT margin. 

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.

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<p><a href="https://www.smartkarma.com/entities/kanzhun-ltd" target="_blank" data-smartkarma-citation="entities:33368:1" rel="noopener">Kanzhun (BZ US)</a>, an online recruitment platform in China, raised around US$912m in its US IPO. The company is backed by <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>. Kanzhun runs BOSS Zhipin APP, which allows enterprise users and jobseekers to directly chat, thus, providing more convenience to both.</p>
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<p>We have covered various aspects of the deal in our earlier notes <a href="https://www.smartkarma.com/insights/kanzhun-pre-ipo-bumble-meets-linkedin" target="_blank" rel="noopener">Kanzhun Pre-IPO -Bumble meets Linkedin</a> and <a href="https://www.smartkarma.com/insights/kanzhun-ipo-fast-growth-strong-investor-support-cash-flow-positive" target="_blank" rel="noopener">Kanzhun IPO - Fast Growth, Strong Investor Support, Cash Flow Positive...</a>.</p>
<p>In this note, we look at deal dynamics and provide an update on valuation.  </p>
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Kanzhun (BZ US), an online recruitment platform in China, raised around US$912m in its US IPO. The company is backed by Tencent (700 HK). Kanzhun runs BOSS Zhipin APP, which allows enterprise users and jobseekers to directly chat, thus, providing more convenience to both.



We have covered various aspects of the deal in our earlier notes Kanzhun Pre-IPO -Bumble meets Linkedin and Kanzhun IPO - Fast Growth, Strong Investor Support, Cash Flow Positive....
In this note, we look at deal dynamics and provide an update on valuation.  


Kanzhun IPO Trading - Should Be Able to Turn the China ADR Sentiment Around

China

Kanzhun Limited provides online recruitment services. The Company connects job seekers and enterprise users through its mobile application. Kanzhun offers a mobile-native product that promotes instant direct chats between enterprise users and job seekers.

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Kanzhun (BZ US)

AiHuiShou IPO: Valuation Insights

While the lower than expected raise suggest lukewarm investor interest, yesterday's blistering first-day pop of Kanzhun points to improving market...

Arun George

Didi Chuxing IPO Preview

Didi Chuxing is the number player for shared mobility services in China. The media have mentioned that the valuations of Didi Chuxing could be...

Douglas Kim

Kanzhun IPO: Thoughts on First Day Trading

We would not be surprised if Kanzhun's EV/Sales exceeds more than 18-20x on its first day trading given the strong growth prospects for Kanzhun.

Shifara Samsudeen, ACMA, CGMA

Kanzhun IPO: Trading Debut

Kanzhun has priced its IPO at $19 per ADS to raise $912 m. Our DCF sensitivity analysis points to a meaningful upside based on achievable targets...

Arun George

Kanzhun IPO Trading - Should Be Able to Turn the China ADR Sentiment Around

Kanzhun (BZ US), an online recruitment platform in China, raised around US$912m in its US IPO. The company is backed by Tencent (700 HK).

Sumeet Singh

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