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

Full Truck Alliance   / Equity Capital Markets

<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> (FTA),  China’s largest digital freight platform by gross transaction value, raised around US$1.6bn via a US listing. It is backed by Softbank and Sequoia.</p></div><div>
<p>In our earlier notes, we spoke about various aspects of the deal in our earlier notes:<a href="https://www.smartkarma.com/insights/full-truck-alliance-pre-ipo-the-positives-category-leader" target="_blank" rel="noopener"></a></p>
<ul>
<li><a href="https://www.smartkarma.com/insights/full-truck-alliance-pre-ipo-the-positives-category-leader" target="_blank" rel="noopener">Full Truck Alliance Pre-IPO - The Positives - Category Leader, </a></li>
<li><a href="https://www.smartkarma.com/insights/full-truck-alliance-pre-ipo-the-negatives-still-a-mixed-bag" target="_blank" rel="noopener">Full Truck Alliance Pre-IPO - The Negatives - Still a Mixed Bag,</a></li>
<li><a href="https://www.smartkarma.com/insights/full-truck-alliance-pre-ipo-valuation-even-the-previous-round-might-have-been-a-stretch" target="_blank" rel="noopener">Full Truck Alliance Pre-IPO - Valuation, Even the Previous Round Might Have Been a Stretch, and</a></li>
<li><a href="https://www.smartkarma.com/insights/full-truck-alliance-ipo-decent-investor-line-up-at-best-a-punt-at-these-valuations" target="_blank" rel="noopener">Full Truck Alliance IPO - Decent Investor Line-Up, at Best a Punt at These Valuations</a></li>
</ul>
<p>In this note, we will talk about the trading dynamics.</p>
</div>

Full Truck Alliance (YMM US) (FTA),  China’s largest digital freight platform by gross transaction value, raised around US$1.6bn via a US listing. It is backed by Softbank and Sequoia.
In our earlier notes, we spoke about various aspects of the deal in our earlier notes:

Full Truck Alliance Pre-IPO - The Positives - Category Leader, 
Full Truck Alliance Pre-IPO - The Negatives - Still a Mixed Bag,
Full Truck Alliance Pre-IPO - Valuation, Even the Previous Round Might Have Been a Stretch, and
Full Truck Alliance IPO - Decent Investor Line-Up, at Best a Punt at These Valuations

In this note, we will talk about the trading dynamics.


Full Truck Alliance IPO Trading - Have to Do a Bull Case to Find Some Upside

<div>
<p><a href="https://www.smartkarma.com/entities/dingdong-maicia" target="_blank" data-smartkarma-citation="entities:33461:1" rel="noopener">Dingdong Maicia (DDL US) </a>(DM), a groceries on-demand e-commerce company, aims to raise up to US$500m via a US listing. It is backed by Tiger Global, General Atlantic and Softbank.</p>
<p>Dingdong Maicai is an on-demand e-commerce company in China which provides users and households with fresh produce, meat and seafood and other daily necessities via its self-operated frontline fulfillment grid. As of 1Q21, DM had 6.9m monthly transacting users, who had placed 69.7m orders during the quarter. Its FY20 gross merchandise value was RMB13bn, representing a 10%+ market share for the on-demand ecommerce fresh groceries and daily necessities market.</p>
</div><div><p>In our earlier notes, we have looked at the background and performance the company:</p></div><div><ul style="list-style-type: disc;">
<li dir="ltr" aria-level="1"><p><a href="https://www.smartkarma.com/insights/dingdong-maicai-pre-ipo-increasing-market-share-fast-growth-but-no-signs-of-profit" target="_blank" rel="noopener">Dingdong Maicai Pre-IPO - Increasing market share, fast growth but no signs of profit</a></p></li>
<li dir="ltr" aria-level="1"><a href="https://www.smartkarma.com/insights/dingdong-maicai-vs-miss-fresh-pre-ipo-one-clear-winner" target="_blank" rel="noopener">Dingdong Maicai Vs Miss Fresh Pre-IPO - One Clear Winner</a></li>
<li dir="ltr" aria-level="1"><a href="https://www.smartkarma.com/insights/dingdong-fresh-food-competition-in-and-outside-of-frontline-warehouse" target="_blank" rel="noopener">Dingdong (叮咚买菜): Fresh Food Competition in and Outside of Frontline Warehouse</a></li>
</ul></div><div><p>In this note we will provide our earnings forecast and talk about valuations.</p></div>


Dingdong Maicia (DDL US) (DM), a groceries on-demand e-commerce company, aims to raise up to US$500m via a US listing. It is backed by Tiger Global, General Atlantic and Softbank.
Dingdong Maicai is an on-demand e-commerce company in China which provides users and households with fresh produce, meat and seafood and other daily necessities via its self-operated frontline fulfillment grid. As of 1Q21, DM had 6.9m monthly transacting users, who had placed 69.7m orders during the quarter. Its FY20 gross merchandise value was RMB13bn, representing a 10%+ market share for the on-demand ecommerce fresh groceries and daily necessities market.
In our earlier notes, we have looked at the background and performance the company:
Dingdong Maicai Pre-IPO - Increasing market share, fast growth but no signs of profit
Dingdong Maicai Vs Miss Fresh Pre-IPO - One Clear Winner
Dingdong (叮咚买菜): Fresh Food Competition in and Outside of Frontline Warehouse
In this note we will provide our earnings forecast and talk about valuations.

Dingdong Maicai Pre-IPO - Thoughts on Valuation

Alpha-Centric ESG Research

Kyle Rudden

<p>Better late than never, as they say.</p><p>Typically, I publish pre-IPO ESG assessments well before book building). This pre-IPO ESG report on <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>, aka Manbang, aka the "Uber for trucks," is admittedly a tad late in the IPO process – given that shares are expected to be trading in one day from now.</p><p>Nevertheless, there are some important ESG issues to contemplate. Nothing that will alter the IPO, of course. And there really aren't all that many highly-material ESG issues for FTA. However, there are one or two <em>big</em> ones – the sort that could crush a technology stock just out of the IPO gate.</p><p>For this Insight, I changed my <em>modus operandi</em>. Instead of addressing every conceivable ESG issue, I focus on the two most material issues for each ESG pillar. The ultra-condensed version is as follows (in decreasing order of materiality hence the Social, Governance, Environmental sequence):</p><ul>
<li>
<strong>Social:</strong> Nothing else matters in terms of acute investment risk. To be clear, FTA seems on top of things vis-à-vis cyber-risk management. There are no specific concerns. But one data breach, or one ransomware attack. That's all it takes to decimate any newly-listed <em>technology</em> company.</li>
<li>
<strong>Governance:</strong> They pale in comparison to Social-pillar cyber-risks, but two material Governance issues are: 1) disproportionate ownership and voting control (nothing new for tech, but an ESG hot-button), and 2) regulatory risk and uncertainty, mainly regarding China's antitrust stance.</li>
<li>
<strong>Environmental:</strong> Environmental issues just don't matter that much from a financial-materiality viewpoint. As a technology firm, FTA's <em>direct</em> climate footprint is negligible. Longer-term it must address its <em>indirect</em> footprint (emissions from third-party activities enabled by its platform).</li>
</ul>

Better late than never, as they say.Typically, I publish pre-IPO ESG assessments well before book building). This pre-IPO ESG report on Full Truck Alliance (YMM US), aka Manbang, aka the "Uber for trucks," is admittedly a tad late in the IPO process – given that shares are expected to be trading in one day from now.Nevertheless, there are some important ESG issues to contemplate. Nothing that will alter the IPO, of course. And there really aren't all that many highly-material ESG issues for FTA. However, there are one or two big ones – the sort that could crush a technology stock just out of the IPO gate.For this Insight, I changed my modus operandi. Instead of addressing every conceivable ESG issue, I focus on the two most material issues for each ESG pillar. The ultra-condensed version is as follows (in decreasing order of materiality hence the Social, Governance, Environmental sequence):

Social: Nothing else matters in terms of acute investment risk. To be clear, FTA seems on top of things vis-à-vis cyber-risk management. There are no specific concerns. But one data breach, or one ransomware attack. That's all it takes to decimate any newly-listed technology company.

Governance: They pale in comparison to Social-pillar cyber-risks, but two material Governance issues are: 1) disproportionate ownership and voting control (nothing new for tech, but an ESG hot-button), and 2) regulatory risk and uncertainty, mainly regarding China's antitrust stance.

Environmental: Environmental issues just don't matter that much from a financial-materiality viewpoint. As a technology firm, FTA's direct climate footprint is negligible. Longer-term it must address its indirect footprint (emissions from third-party activities enabled by its platform).


Pre-IPO ESG Analysis of Full Truck Alliance: Strong ESG Profile... But With One Potential Landmine

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>It was reported by several news media outlets today that the China’s State Administration for Market Regulation (SAMR) has launched a probe on ride hailing giant <a href="https://www.smartkarma.com/entities/didi-chuxing-inc" target="_blank" data-smartkarma-citation="entities:27467:1" rel="noopener">DiDi Chuxing (DIDI US)</a>  as the company prepares for its long-awaited public listing in the US. The antitrust investigation will focus on whether Didi used any unfair competitive practices to eliminate small rivals out of the market. The SAMR is also investigating whether the pricing mechanism used by Didi’s core ride-hailing business (China Mobility segment) is transparent enough.</p><p>China’s competition regulator, the State Administration for Market Regulation (SAMR) formally approved the draft anti-monopoly law released in November 2020 to further tighten restrictions on the country’s tech giants.</p><p>It all began when SAMR launched a probe on <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> over its suspected monopolistic practices in December last year. The investigation on <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> was concluded on 10th April and the company was fined RMB18.2bn for breaching anti-monopoly rules where investigations revealed that <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> was abusing its market dominance to prevent other merchants from using other platforms since 2015. Now the focus is shifting away from <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> to other internet stocks in the country including <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> , <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>  and <a href="https://www.smartkarma.com/entities/didi-chuxing-inc" target="_blank" data-smartkarma-citation="entities:27467:1" rel="noopener">DiDi Chuxing (DIDI US)</a> .</p>

It was reported by several news media outlets today that the China’s State Administration for Market Regulation (SAMR) has launched a probe on ride hailing giant DiDi Chuxing (DIDI US)  as the company prepares for its long-awaited public listing in the US. The antitrust investigation will focus on whether Didi used any unfair competitive practices to eliminate small rivals out of the market. The SAMR is also investigating whether the pricing mechanism used by Didi’s core ride-hailing business (China Mobility segment) is transparent enough.China’s competition regulator, the State Administration for Market Regulation (SAMR) formally approved the draft anti-monopoly law released in November 2020 to further tighten restrictions on the country’s tech giants.It all began when SAMR launched a probe on Alibaba Group (BABA US) over its suspected monopolistic practices in December last year. The investigation on Alibaba Group (BABA US) was concluded on 10th April and the company was fined RMB18.2bn for breaching anti-monopoly rules where investigations revealed that Alibaba Group (BABA US) was abusing its market dominance to prevent other merchants from using other platforms since 2015. Now the focus is shifting away from Alibaba Group (BABA US) to other internet stocks in the country including Tencent (700 HK) , Meituan (3690 HK)  and DiDi Chuxing (DIDI US) .

Didi IPO: China Launches Probe as Didi Prepares for US Listing

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.

<p><a href="https://www.smartkarma.com/entities/dingdong-maicai" target="_blank" data-smartkarma-citation="entities:33461:1" rel="noopener">Dingdong Maicai (DDL US)</a> is an online grocery platform in China. The <em>Dingdong Fresh</em> mobile app and mini-programs enable Chinese consumer to shop online for groceries and other products. Dingdong notes that its market share in the on-demand e-commerce industry as measured by GMV (gross merchandise value) was 10.1% in 2020, according to CIC.</p><p>Dingdong is backed by Shunwei China Internet Fund V (5.7% of outstanding shares), General Atlantic (5.6%), SoftBank Vision Fund (5.6%), CMC Capital (5.3%) and DST Asia (5.1%). Dingdong has filed for an NYSE IPO to raise $500 million, according to press reports. We also note that peer, <a href="https://www.smartkarma.com/entities/missfresh-limited" target="_blank" data-smartkarma-citation="entities:33468:1" rel="noopener">Missfresh (MF US)</a>, has also filed for a Nasdaq IPO to raise $500 million, according to press reports. We discussed this in <a href="https://www.smartkarma.com/insights/missfresh-ipo-initiation-no-so-fresh" target="_blank" data-smartkarma-citation="insights:53139" rel="noopener">Missfresh IPO Initiation: No so Fresh</a>. WM Tech has also filed for an HKEx IPO to raise potentially $1 billion, according to press reports. We discussed this in <a href="https://www.smartkarma.com/insights/wm-tech-ipo-initiation-food-for-thought" target="_blank" data-smartkarma-citation="insights:49914" rel="noopener">WM Tech IPO Initiation: Food for Thought</a>. </p><p>The current frenzy around the online grocery delivery market in China is reminiscent of the bike-sharing frenzy a few years. The promises of a sizeable addressable market opportunity have resulted in significant sums being raised by specialists (such as Dingdong and Missfresh), tech goliaths (<a href="https://www.smartkarma.com/entities/pinduoduo-inc" target="_blank" data-smartkarma-citation="entities:27250:1" rel="noopener">Pinduoduo (PDD US)</a> and <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>) and traditional offline stores (such as <a href="https://www.smartkarma.com/entities/wm-tech-corporation" target="_blank" data-smartkarma-citation="entities:32976:1" rel="noopener">WM Tech Corporation (WMT HK)</a>) for their respective online grocery platforms. The resulting arms race has led to these players reporting heavy losses for their online grocery segments in the quest to grab market share. </p><div class="content-highlight"><p>It is unclear if Dingdong (and Missfresh) has a sustainable competitive advantage to emerge as one of the winners. The online grocery delivery market is set for a shakeout which means that like bike-sharing, it will result in significant shareholder value destruction. Overall, we would pass on the IPO and wait on the sidelines to see how this plays out.</p></div>

Dingdong Maicai (DDL US) is an online grocery platform in China. The Dingdong Fresh mobile app and mini-programs enable Chinese consumer to shop online for groceries and other products. Dingdong notes that its market share in the on-demand e-commerce industry as measured by GMV (gross merchandise value) was 10.1% in 2020, according to CIC.Dingdong is backed by Shunwei China Internet Fund V (5.7% of outstanding shares), General Atlantic (5.6%), SoftBank Vision Fund (5.6%), CMC Capital (5.3%) and DST Asia (5.1%). Dingdong has filed for an NYSE IPO to raise $500 million, according to press reports. We also note that peer, Missfresh (MF US), has also filed for a Nasdaq IPO to raise $500 million, according to press reports. We discussed this in Missfresh IPO Initiation: No so Fresh. WM Tech has also filed for an HKEx IPO to raise potentially $1 billion, according to press reports. We discussed this in WM Tech IPO Initiation: Food for Thought. The current frenzy around the online grocery delivery market in China is reminiscent of the bike-sharing frenzy a few years. The promises of a sizeable addressable market opportunity have resulted in significant sums being raised by specialists (such as Dingdong and Missfresh), tech goliaths (Pinduoduo (PDD US) and Meituan (3690 HK)) and traditional offline stores (such as WM Tech Corporation (WMT HK)) for their respective online grocery platforms. The resulting arms race has led to these players reporting heavy losses for their online grocery segments in the quest to grab market share. It is unclear if Dingdong (and Missfresh) has a sustainable competitive advantage to emerge as one of the winners. The online grocery delivery market is set for a shakeout which means that like bike-sharing, it will result in significant shareholder value destruction. Overall, we would pass on the IPO and wait on the sidelines to see how this plays out.

Dingdong IPO Initiation: An Arms Race Is Brewing

China

Meituan operates as a web based shopping platform for locally found consumer products and retail services. The Company offers deals of the day by selling vouchers on local services and entertainment, dining, delivery, and other services. Meituan provides its services throughout China.

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Meituan (3690 HK)

Full Truck Alliance IPO Trading - Have to Do a Bull Case to Find Some Upside

Full Truck Alliance (YMM US) (FTA), China’s largest digital freight platform by gross transaction value, raised around US$1.6bn via a US listing....

Sumeet Singh

Dingdong Maicai Pre-IPO - Thoughts on Valuation

Dingdong Maicia (DDL US), a groceries on-demand e-commerce company, aims to raise up to US$500m via a US listing. It is backed by Tiger Global,...

Sumeet Singh

Pre-IPO ESG Analysis of Full Truck Alliance: Strong ESG Profile... But With One Potential Landmine

There aren't many highly material ESG issues for FTA. But quantity is irrelevant when there is one big ESG issue with the potential to crush any...

Kyle Rudden

Didi IPO: China Launches Probe as Didi Prepares for US Listing

Didi itself has mentioned in its prospectus that to remain competitive the company sometimes lower fares or service fees, offer significant driver...

Shifara Samsudeen, ACMA, CGMA

Dingdong IPO Initiation: An Arms Race Is Brewing

The online grocery market is set for a shakeout which will result in significant shareholder value destruction. Overall, we would pass on the IPO...

Arun George

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