Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/ximalaya-inc" target="_blank" data-smartkarma-citation="entities:33232:1" rel="noopener">Ximalaya (XIMA US), which</a> 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>, is getting ready to complete its IPO in the United States in the next several weeks. Ximalaya is the largest online audio platform in China in terms of MAU. <a href="https://www.reuters.com/technology/chinese-podcast-startup-ximalaya-files-us-ipo-2021-04-30/" target="_blank" rel="noopener">Ximalaya</a> was last valued at $3.7 billion in July 2018. The main underwriters of the IPO include Goldman Sachs, Morgan Stanley, BofA Securities, and CICC. </p><p>The company generated sales of 4.1 billion RMB (up 51.3% YoY) and gross profit of 2.0 billion RMB (up 70.3% YoY). From 2018 to 2020, the company's sales increased by 65.7% CAGR. The company's sales continued to accelerate by 65.2% YoY in 1Q 2021. The increasing sales growth has been accompanied by improving profit margins.</p>

Ximalaya (XIMA US), which is backed by Tencent (700 HK), is getting ready to complete its IPO in the United States in the next several weeks. Ximalaya is the largest online audio platform in China in terms of MAU. Ximalaya was last valued at $3.7 billion in July 2018. The main underwriters of the IPO include Goldman Sachs, Morgan Stanley, BofA Securities, and CICC. The company generated sales of 4.1 billion RMB (up 51.3% YoY) and gross profit of 2.0 billion RMB (up 70.3% YoY). From 2018 to 2020, the company's sales increased by 65.7% CAGR. The company's sales continued to accelerate by 65.2% YoY in 1Q 2021. The increasing sales growth has been accompanied by improving profit margins.

Ximalaya IPO Preview - Creating the Joe Rogans of China

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.

<div><p><a href="https://www.smartkarma.com/entities/ximalaya-inc" target="_blank" data-smartkarma-citation="entities:33232:1" rel="noopener">Ximalaya (XIMA US)</a>, the largest online audio platform in China, is looking to raise around US$1bn in its US listing. </p></div><div>
<p>As of 1Q21, it had 250m average MAUs, which included 104m mobile MAUs through its apps and 146m MAUs through internet-of-things (IoT) and other third-party platforms. As per CIC, it accounted for 75% of total mobile listening time among all online audio platforms in China. It had 5.2m active content creators in 2020.</p>
<p>In our previous note,<a href="https://www.smartkarma.com/insights/ximalaya-pre-ipo-the-positives-a-whole-lot-of-listening" target="_blank" rel="noopener"> Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening</a>, we covered the positive aspects of the deal.</p>
</div><div><p>In this note, we will talk about the not so pleasant aspects of the deal.</p></div>

Ximalaya (XIMA US), the largest online audio platform in China, is looking to raise around US$1bn in its US listing. 
As of 1Q21, it had 250m average MAUs, which included 104m mobile MAUs through its apps and 146m MAUs through internet-of-things (IoT) and other third-party platforms. As per CIC, it accounted for 75% of total mobile listening time among all online audio platforms in China. It had 5.2m active content creators in 2020.
In our previous note, Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening, we covered the positive aspects of the deal.
In this note, we will talk about the not so pleasant aspects of the deal.

<p><a href="https://www.smartkarma.com/entities/ximalaya-inc" target="_blank" data-smartkarma-citation="entities:33232:1" rel="noopener">Ximalaya (XIMA US)</a>, the largest online audio platform in China, is looking to raise around US$1bn in its US listing. </p><p>As of 1Q21, it had 250m average MAUs, which included 104m mobile MAUs through its apps and 146m MAUs through internet-of-things (IoT) and other third-party platforms. As per CIC, it accounted for 75% of total mobile listening time among all online audio platforms in China. It had 5.2m active content creators in 2020.</p><p>In this note, we will talk about the positive aspects of the deal.</p>

Ximalaya (XIMA US), the largest online audio platform in China, is looking to raise around US$1bn in its US listing. As of 1Q21, it had 250m average MAUs, which included 104m mobile MAUs through its apps and 146m MAUs through internet-of-things (IoT) and other third-party platforms. As per CIC, it accounted for 75% of total mobile listening time among all online audio platforms in China. It had 5.2m active content creators in 2020.In this note, we will talk about the positive aspects of the deal.

Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening

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.

<div><p><a href="https://www.smartkarma.com/entities/waterdrop-inc" target="_blank" data-smartkarma-citation="entities:33018:1" rel="noopener">Waterdrop Inc (WDH US)</a> is the largest independent third-party insurance platform in China as measured by life and health insurance first-year premiums (FYP) distributed in 2020, according to iResearch. Waterdrop is backed by <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/swiss-re-ag-1f83dcbc-730e-46fa-82f2-bfe7e8e361a1" target="_blank" data-smartkarma-citation="entities:27914:1" rel="noopener">Swiss Re AG (SREN SW)</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>.</p></div><div><p>At the mid-point of the proposed IPO price range of $10.00-12.00 per ADS, Waterdrop will have a market cap of $4.3 billion. At the mid-point of the IPO price range, the net proceeds are $301.6 million. New and existing shareholders have indicated on $210 million of the IPO, including Boyu Capital ($100 million), HOPU Investments (at least $80 million), and Kevin Sunny Holding ($30 million). The indications of interest represent 63.6% of the ADSs on offer at the mid-point of the IPO price range.</p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/waterdrop-ipo-initiation-going-for-brokers" target="_blank" data-smartkarma-citation="insights:50610" rel="noopener">Waterdrop IPO Initiation: Going for Brokers</a>, we opined that as a leading online third-party insurance broker, Waterdrop is well-positioned to benefit from favourable industry trends. The key unknown is whether the changing regulations will throw a spanner in the works. Notwithstanding the regulatory overhang, we concluded that Waterdrop is worth a look. Our analysis suggests that the IPO price range is full at the high-end but has some upside at the low-end. </p></div></div></div>

Waterdrop Inc (WDH US) is the largest independent third-party insurance platform in China as measured by life and health insurance first-year premiums (FYP) distributed in 2020, according to iResearch. Waterdrop is backed by Tencent Holdings (700 HK), Swiss Re AG (SREN SW) and Meituan (3690 HK).At the mid-point of the proposed IPO price range of $10.00-12.00 per ADS, Waterdrop will have a market cap of $4.3 billion. At the mid-point of the IPO price range, the net proceeds are $301.6 million. New and existing shareholders have indicated on $210 million of the IPO, including Boyu Capital ($100 million), HOPU Investments (at least $80 million), and Kevin Sunny Holding ($30 million). The indications of interest represent 63.6% of the ADSs on offer at the mid-point of the IPO price range.In Waterdrop IPO Initiation: Going for Brokers, we opined that as a leading online third-party insurance broker, Waterdrop is well-positioned to benefit from favourable industry trends. The key unknown is whether the changing regulations will throw a spanner in the works. Notwithstanding the regulatory overhang, we concluded that Waterdrop is worth a look. Our analysis suggests that the IPO price range is full at the high-end but has some upside at the low-end. 

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

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<p>After the failed attempt to merge with <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek</a> and the decision to take the SPAC route to market in the US, <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (0967655D SP)</a> has now reportedly taken a 4% stake in local digital and media powerhouse, <a href="https://www.smartkarma.com/entities/elang-mahkota-teknologi-tbk" target="_blank" data-smartkarma-citation="entities:7752:1" rel="noopener">Emtek (EMTK IJ)</a>. It seems unlikely that this is purely a strategic stake and points the way toward future collaboration potentially in a number of areas.</p>
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<p><a href="https://www.smartkarma.com/entities/elang-mahkota-teknologi-tbk" target="_blank" data-smartkarma-citation="entities:7752:1" rel="noopener">Emtek (EMTK IJ)</a> remains a very interesting locally listed alternative to play digital media, e-commerce, and digital payments under one roof, with aspirations to emulate the success of  <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a>.<a href="https://www.smartkarma.com/entities/elang-mahkota-teknologi-tbk" target="_blank" data-smartkarma-citation="entities:7752:1" rel="noopener"></a></p>
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<p>In another related and interesting turn, Bukalapak, which is Indonesia's 3rd largest e-commerce firm 35% owned by <a href="https://www.smartkarma.com/entities/elang-mahkota-teknologi-tbk" target="_blank" data-smartkarma-citation="entities:7752:1" rel="noopener">Emtek (EMTK IJ)</a> has raised an undisclosed sum from BRI Ventures, the venture capital arm of <a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia (BBRI IJ)</a>. </p>
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<p>Bukalapak claims that it now has around 13.5m MSMEs on its platform and over 100m users on its online to offline (O20) platform. </p>
<p>The merged <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ)</a> and <a href="https://www.smartkarma.com/entities/tokopedia-pt" target="_blank" data-smartkarma-citation="entities:24239:1" rel="noopener">Tokopedia PT (1087142D IJ)</a> entity to be named "GoTo" will be a formidable competitor for <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a>, a risk not highlighted enough in the seeming euphoria around the <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab</a> SPAC listing.</p>
<p>Another significant risk to Grab comes from recently launched ShopeeFood in Indonesia, which will directly impact Grab's (and Gojek's) food delivery business in Indonesia.</p>
<p>From a SotP point of view for <a href="https://www.smartkarma.com/entities/elang-mahkota-teknologi-tbk" target="_blank" data-smartkarma-citation="entities:7752:1" rel="noopener">Emtek (EMTK IJ)</a>, it is difficult to get much beyond a US$4bn valuation but there are those arguing that it should be valued along the same lines 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>, which would suggest potential significant upside from here.</p>
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After the failed attempt to merge with Gojek and the decision to take the SPAC route to market in the US, Grab (0967655D SP) has now reportedly taken a 4% stake in local digital and media powerhouse, Emtek (EMTK IJ). It seems unlikely that this is purely a strategic stake and points the way toward future collaboration potentially in a number of areas.

Emtek (EMTK IJ) remains a very interesting locally listed alternative to play digital media, e-commerce, and digital payments under one roof, with aspirations to emulate the success of  Sea Ltd (SE US).

In another related and interesting turn, Bukalapak, which is Indonesia's 3rd largest e-commerce firm 35% owned by Emtek (EMTK IJ) has raised an undisclosed sum from BRI Ventures, the venture capital arm of Bank Rakyat Indonesia (BBRI IJ). 

Bukalapak claims that it now has around 13.5m MSMEs on its platform and over 100m users on its online to offline (O20) platform. 
The merged Gojek (1379371D IJ) and Tokopedia PT (1087142D IJ) entity to be named "GoTo" will be a formidable competitor for Grab, a risk not highlighted enough in the seeming euphoria around the Grab SPAC listing.
Another significant risk to Grab comes from recently launched ShopeeFood in Indonesia, which will directly impact Grab's (and Gojek's) food delivery business in Indonesia.
From a SotP point of view for Emtek (EMTK IJ), it is difficult to get much beyond a US$4bn valuation but there are those arguing that it should be valued along the same lines as Sea Ltd (SE US), which would suggest potential significant upside from here.









Emtek (EMTK IJ) - The Indonesian Digital Game of Thrones

China

NetEase, Inc. operates as an leading internet technology company providing online services including content, community, communication, and commerce. The Company develops and operates online games, electronic commerce, internet media, innovative business, and other businesses. NetEase expands its businesses to Japan, North American, and other other international markets.

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NetEase (9999 HK)

Ximalaya IPO Preview - Creating the Joe Rogans of China

Ximalaya is the largest online audio platform in China which is getting ready to complete its IPO in the next several weeks.

Douglas Kim

Ximalaya Pre-IPO - The Negatives

Ximalaya (XIMA US), the largest online audio platform in China, is looking to raise around US$1bn in its US listing. In this note, we will talk...

Sumeet Singh

Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening

Ximalaya (XIMA US), the largest online audio platform in China, is looking to raise around US$1bn in its US listing. In this note, we'll talk about...

Sumeet Singh

Waterdrop IPO: Valuation Insights

Waterdrop has launched its IPO to raise net proceeds of $301.6 million at the mid-point of the price range of $10-12. The price range is full at...

Arun George

Emtek (EMTK IJ) - The Indonesian Digital Game of Thrones

EMTEK remains the largest locally listed proxy to play digital media, e-commerce, and digital payments in Indonesia. The news that Grab has taken a...

Angus Mackintosh

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