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

Zhihu Technology / Equity Capital Markets

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<p><a href="https://www.smartkarma.com/entities/zhihu-technology-ltd" target="_blank" data-smartkarma-citation="entities:32185:1" rel="noopener">Zhihu Technology (ZH US)</a> is the largest Q&amp;A-inspired online community and one of the top five comprehensive online content communities in China, both in terms of average mobile MAUs and revenue in 2020, according to CIC. Zhihu is acknowledged as the first choice among all online content communities in China where people look for information to make decisions or find answers, according to CIC. Zhihu 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/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a> and <a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a>.</p>
<div class="content-highlight"><p>Zhihu is pre-marketing an NYSE IPO to raise proceeds of $1 billion, according to press reports. <span>In </span><a href="https://www.smartkarma.com/insights/zhihu-ipo-initiation-question-time" target="_blank" data-smartkarma-citation="insights:48928" rel="noopener">Zhihu IPO Initiation: Question Time</a><span>, we opined that as the largest Q&amp;A-inspired online community, Zhihu is well-positioned to benefit from favourable industry trends. We concluded that Zhihu’s fundamentals are attractive. In this note, we present our forecasts and take the first look at Zhihu's potential valuation. </span></p></div>
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Zhihu Technology (ZH US) is the largest Q&amp;A-inspired online community and one of the top five comprehensive online content communities in China, both in terms of average mobile MAUs and revenue in 2020, according to CIC. Zhihu is acknowledged as the first choice among all online content communities in China where people look for information to make decisions or find answers, according to CIC. Zhihu is backed by Tencent Holdings (700 HK), Kuaishou Technology (1024 HK) and Baidu (BIDU US).
Zhihu is pre-marketing an NYSE IPO to raise proceeds of $1 billion, according to press reports. In Zhihu IPO Initiation: Question Time, we opined that as the largest Q&amp;A-inspired online community, Zhihu is well-positioned to benefit from favourable industry trends. We concluded that Zhihu’s fundamentals are attractive. In this note, we present our forecasts and take the first look at Zhihu's potential valuation. 


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.

Autohome Inc (Adr) / Equity Capital Markets

<div><p>Autohome raised around US$700m in its secondary listing in Hong Kong. </p></div><div>
<p>I have covered most aspects of the deal in my earlier note, <a href="https://www.smartkarma.com/insights/autohome-secondary-listing-doesn-t-need-the-cash-at-all" target="_blank" rel="noopener">Autohome Secondary Listing - Doesn’t Need the Cash at All </a> and <a href="https://www.smartkarma.com/insights/autohome-secondary-listing-going-down-a-different-route" target="_blank" rel="noopener">Autohome Secondary Listing - Going Down a Different Route.</a></p>
<p>In this note, I'll talk about the updates since my last note.</p>
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Autohome raised around US$700m in its secondary listing in Hong Kong. 
I have covered most aspects of the deal in my earlier note, Autohome Secondary Listing - Doesn’t Need the Cash at All  and Autohome Secondary Listing - Going Down a Different Route.
In this note, I'll talk about the updates since my last note.


Autohome Secondary Trading - Strong Retail, Weak Insti Coverage

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Thematic (Sector/Industry)

<p>This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices. </p><p><strong><em>Companies mentioned this week:</em></strong></p><p><a href="https://www.smartkarma.com/entities/sk-hynix-inc" target="_blank" data-smartkarma-citation="entities:16955:1" rel="noopener">SK Hynix (000660 KS)</a>, <a href="https://www.smartkarma.com/entities/new-oriental-education-tech-grp-adr" target="_blank" data-smartkarma-citation="entities:531:1" rel="noopener">New Oriental Education (EDU US)</a>, <a href="https://www.smartkarma.com/entities/tal-education-group" target="_blank" data-smartkarma-citation="entities:1124:1" rel="noopener">TAL Education (TAL US)</a>, <a href="https://www.smartkarma.com/entities/netease" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a>, <a href="https://www.smartkarma.com/entities/bilibili-inc" target="_blank" data-smartkarma-citation="entities:26793:1" rel="noopener">Bilibili Inc (BILI US)</a>, <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/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a></p>

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices. Companies mentioned this week:SK Hynix (000660 KS), New Oriental Education (EDU US), TAL Education (TAL US), NetEase (9999 HK), Bilibili Inc (BILI US), Tencent Holdings (700 HK), Baidu (BIDU US)

Global Emerging Markets Weekly: 12 March 2021

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<div class="content-highlight"><p><strong>Our comparable companies valuation sensitivity analysis suggests an implied EV range of $6.2 billion to $11.3 billion and implied market cap of $7.3 billion to $12.4 billion for Tuya.</strong></p></div><p>The market is likely to attach valuation multiples that are in the high end range of the comps mainly because Tuya's sales growth is higher than the comps' average. Plus, it is difficult to find companies such as Tuya which specializes in the IoT related PaaS/SaaS products and services and investors are likely to put a premium on the company's strengths.</p><p>Similar to how smartphones and mobile connectivity has changed the world in the past decade, there is a huge amount of interest in IoT (Internet of Things) driven technology which is just starting to get penetrated in businesses around the world. Similar to how smartphones have allowed millions of people to be better "connected", the IoT technology will now enable the "machines to be connected" to the network, enabling greater business efficiencies and new revenue opportunities. </p>

Our comparable companies valuation sensitivity analysis suggests an implied EV range of $6.2 billion to $11.3 billion and implied market cap of $7.3 billion to $12.4 billion for Tuya.The market is likely to attach valuation multiples that are in the high end range of the comps mainly because Tuya's sales growth is higher than the comps' average. Plus, it is difficult to find companies such as Tuya which specializes in the IoT related PaaS/SaaS products and services and investors are likely to put a premium on the company's strengths.Similar to how smartphones and mobile connectivity has changed the world in the past decade, there is a huge amount of interest in IoT (Internet of Things) driven technology which is just starting to get penetrated in businesses around the world. Similar to how smartphones have allowed millions of people to be better "connected", the IoT technology will now enable the "machines to be connected" to the network, enabling greater business efficiencies and new revenue opportunities. 

Tuya IPO - Valuation Sensitivity Analysis

<div><p><a href="https://www.smartkarma.com/entities/tuya-inc" target="_blank" data-smartkarma-citation="entities:32158:1" rel="noopener">Tuya Inc (1869782D US)</a> provides a backend service for IoT (internet of things) device makers. Tuya offers its customers a Platform-as-a-Service (PaaS) for IoT devices that handles the connectivity, device software and application development.</p></div><div><p>At the proposed IPO price range of $17-20 per ADS, Tuya will have a market cap of $9.5-11.2 billion. At the mid-point of the IPO price range, the net proceeds are $770.72 million. Tuya has received indications of interest from existing investors (<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> and Hillhouse Capital) and new investors (Canada Pension Plan Investment Board, Dragoneer Investment Group, GIC and Tiger Global Management) for a total of $500 million worth of ADSs in the offering.</p></div><div>
<p>In <a href="https://www.smartkarma.com/insights/tuya-ipo-initiation-connected-future" target="_blank" data-smartkarma-citation="insights:48695" rel="noopener">Tuya IPO Initiation: Connected Future</a>, we opined that Tuya’s PaaS solutions are well-positioned to benefit from the rising need for third-party IoT PaaS providers who can provide the required tools. We concluded that Tuya’s fundamentals are attractive.</p>
<div class="content-highlight"><p>The mid-point of the IPO price range of $17-20 per ordinary share (each ADS represents one Class A ordinary share) is a 48% and 28% premium to the valuation of the ordinary shares at the last raise ($12.48 - $200 million raise on 1/2 February 2021) and the last valuation exercise ($14.46 - 21 February 2021). While these juicy IPO premiums in a short space of time may turn off potential investors, our valuation analysis suggests that the IPO price range is reasonable but full at the high-end. Overall, we would participate in the IPO. </p></div>
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Tuya Inc (1869782D US) provides a backend service for IoT (internet of things) device makers. Tuya offers its customers a Platform-as-a-Service (PaaS) for IoT devices that handles the connectivity, device software and application development.At the proposed IPO price range of $17-20 per ADS, Tuya will have a market cap of $9.5-11.2 billion. At the mid-point of the IPO price range, the net proceeds are $770.72 million. Tuya has received indications of interest from existing investors (Tencent Holdings (700 HK) and Hillhouse Capital) and new investors (Canada Pension Plan Investment Board, Dragoneer Investment Group, GIC and Tiger Global Management) for a total of $500 million worth of ADSs in the offering.
In Tuya IPO Initiation: Connected Future, we opined that Tuya’s PaaS solutions are well-positioned to benefit from the rising need for third-party IoT PaaS providers who can provide the required tools. We concluded that Tuya’s fundamentals are attractive.
The mid-point of the IPO price range of $17-20 per ordinary share (each ADS represents one Class A ordinary share) is a 48% and 28% premium to the valuation of the ordinary shares at the last raise ($12.48 - $200 million raise on 1/2 February 2021) and the last valuation exercise ($14.46 - 21 February 2021). While these juicy IPO premiums in a short space of time may turn off potential investors, our valuation analysis suggests that the IPO price range is reasonable but full at the high-end. Overall, we would participate in the IPO. 


China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent (700 HK)

Zhihu IPO: Valuation First Look

Zhihu is pre-marketing an NYSE IPO to raise proceeds of $1 billion, according to press reports. In this note, we present our forecasts and take the...

Arun George

Autohome Secondary Trading - Strong Retail, Weak Insti Coverage

Autohome raised around US$700m in its secondary listing in Hong Kong. I have covered most aspects of the deal in my earlier note. In this note,...

Sumeet Singh

Global Emerging Markets Weekly: 12 March 2021

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity...

Wium Malan, CFA

Tuya IPO - Valuation Sensitivity Analysis

Our comparable companies valuation sensitivity analysis suggests an implied EV range of $6.2 billion to $11.3 billion and implied market cap of...

Douglas Kim

Tuya IPO: Valuation Insights

At the mid-point of the IPO price range of $17-20 per ADS, Tuya will raise net proceeds of $771 million. Our analysis suggests that the IPO price...

Arun George

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