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.

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/tuya-inc" target="_blank" data-smartkarma-citation="entities:32158:1" rel="noopener">Tuya Inc (TUYA US)</a>  offers a purpose-built IoT Cloud platform with a full suite of offerings that include Platform-as-a-Service (PaaS) and Software-as-a-Service (Saas) to businesses and developers. The company started trading on the NYSE on 18<sup>th</sup> March and the company set the final IPO pricing at US$21 per ADS, higher than the company’s IPO price range of US$17-20 per ADS. The company issued 43.59m ADS (each ADS represents one ordinary share of the company) at the IPO and raised approx. US$915m.</p><p>Tuya’s IPO in the US marks the second biggest US IPO in 2021 by a Chinese company after RLX Technology raised over US$1.5bn at its US IPO earlier this year.</p><p>Tuya’s shares opened strong on its first day of trading, hitting an intra-day high ofUS$26.30 per ADS, about 25% higher than the final IPO price of US$21 per ADS. Tuya’s shares closed at US$25 per ADS at the end of its first day of trading, about 20% higher than the company’s final IPO price, giving the company a market capitalisation of approx. US$14bn.</p><p>Tuya’s shares closed at US$20.38 per share at the end of yesterday’s trading (30th March) and the company plans to use the net proceeds from the IPO on R&amp;D, investing on technology infrastructure, marketing and branding and for other general corporate purposes. The company’s IPO was backed by a strong line-up of cornerstone investors including Tencent, Hillhouse Capital, Gaoling Fund, Tiger Global Management, etc.</p>

Tuya Inc (TUYA US)  offers a purpose-built IoT Cloud platform with a full suite of offerings that include Platform-as-a-Service (PaaS) and Software-as-a-Service (Saas) to businesses and developers. The company started trading on the NYSE on 18th March and the company set the final IPO pricing at US$21 per ADS, higher than the company’s IPO price range of US$17-20 per ADS. The company issued 43.59m ADS (each ADS represents one ordinary share of the company) at the IPO and raised approx. US$915m.Tuya’s IPO in the US marks the second biggest US IPO in 2021 by a Chinese company after RLX Technology raised over US$1.5bn at its US IPO earlier this year.Tuya’s shares opened strong on its first day of trading, hitting an intra-day high ofUS$26.30 per ADS, about 25% higher than the final IPO price of US$21 per ADS. Tuya’s shares closed at US$25 per ADS at the end of its first day of trading, about 20% higher than the company’s final IPO price, giving the company a market capitalisation of approx. US$14bn.Tuya’s shares closed at US$20.38 per share at the end of yesterday’s trading (30th March) and the company plans to use the net proceeds from the IPO on R&amp;D, investing on technology infrastructure, marketing and branding and for other general corporate purposes. The company’s IPO was backed by a strong line-up of cornerstone investors including Tencent, Hillhouse Capital, Gaoling Fund, Tiger Global Management, etc.

Tuya IPO Trading Update: Recent Drop in Stock Price Offers a Good Entry Point

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/tuya-inc" target="_blank" data-smartkarma-citation="entities:32158:1" rel="noopener">Tuya Inc (TUYA 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>Tuya has priced its IPO at $21.00 per ADS to raise gross proceeds of $915 million, above the previous IPO price range of $17-20 per ADS, according to Bloomberg. At the final IPO price of $21 per share, Tuya will have a market cap of $11.8 billion. The IPO got off to a strong start due to indications of interest for $500 million worth of ADSs in the offering 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).</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. In <a href="https://www.smartkarma.com/insights/tuya-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:49137" rel="noopener">Tuya IPO: Valuation Insights</a> we noted that the IPO price range is reasonable but full at the high-end. </p></div><div><div><div class="content-highlight"><p>Updating for the final IPO net raise, our base-case DCF derived price target of $20.65 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 securing a modest share of the addressable market. </p></div></div></div>

Tuya Inc (TUYA 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.Tuya has priced its IPO at $21.00 per ADS to raise gross proceeds of $915 million, above the previous IPO price range of $17-20 per ADS, according to Bloomberg. At the final IPO price of $21 per share, Tuya will have a market cap of $11.8 billion. The IPO got off to a strong start due to indications of interest for $500 million worth of ADSs in the offering 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).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. In Tuya IPO: Valuation Insights we noted that the IPO price range is reasonable but full at the high-end. Updating for the final IPO net raise, our base-case DCF derived price target of $20.65 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 securing a modest share of the addressable market. 

APAC IPOs & Placements

Zhen Zhou, Toh

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/tuya-inc" target="_blank" data-smartkarma-citation="entities:32158:1" rel="noopener">Tuya Inc (TUYA US)</a> raised about US$915m in its US IPO, priced at US$21 per ADS, above the top end of its initial price range.</p>
</div>
<div>
<p>Tuya is a Platform as a Service (PaaS) and Software as a Service (SaaS) provider to businesses and developers with a focus on IoT. The company’s IoT PaaS enables businesses and developers to easily develop, launch, manage, and monetize software-enabled devices and services while its Industry SaaS helps businesses deploy, connect, and manage a large number and different types of smart devices. </p>
</div>
<div>
<p>In this note, we will look at updated valuation and share our final thoughts on the IPO.</p>
</div>
<div>
<p>We have previously covered the company in:</p>
</div>
<div>
<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/tuya-pre-ipo-ride-the-iot-wave-via-tuya-s-platform" target="_blank" data-smartkarma-citation="insights:48740" rel="noopener">Tuya (涂鸦智能) Pre-IPO - Ride the IoT Wave Via Tuya’s Platform</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/tuya-pre-ipo-tuya-s-platform-usage-review" target="_blank" data-smartkarma-citation="insights:48822" rel="noopener">Tuya (涂鸦智能) Pre-IPO - Tuya's Platform Usage Review</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/tuya-pre-ipo-peer-comparison-forecast-and-valuation" target="_blank" data-smartkarma-citation="insights:48924" rel="noopener">Tuya (涂鸦智能) Pre-IPO - Peer Comparison, Forecast, and Valuation</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/tuya-ipo-pushing-for-a-pricey-connection" target="_blank" data-smartkarma-citation="insights:49185" rel="noopener">Tuya (涂鸦智能) IPO -  Pushing for a Pricey Connection</a> </li>
</ul>
</div>


Tuya Inc (TUYA US) raised about US$915m in its US IPO, priced at US$21 per ADS, above the top end of its initial price range.


Tuya is a Platform as a Service (PaaS) and Software as a Service (SaaS) provider to businesses and developers with a focus on IoT. The company’s IoT PaaS enables businesses and developers to easily develop, launch, manage, and monetize software-enabled devices and services while its Industry SaaS helps businesses deploy, connect, and manage a large number and different types of smart devices. 


In this note, we will look at updated valuation and share our final thoughts on the IPO.


We have previously covered the company in:




Tuya (涂鸦智能) Pre-IPO - Ride the IoT Wave Via Tuya’s Platform 

Tuya (涂鸦智能) Pre-IPO - Tuya's Platform Usage Review 

Tuya (涂鸦智能) Pre-IPO - Peer Comparison, Forecast, and Valuation 

Tuya (涂鸦智能) IPO -  Pushing for a Pricey Connection 



Tuya (涂鸦智能) IPO Trading - Strong Momentum but Watch Out for the Post Debut Fizzle

<p><a href="https://www.smartkarma.com/entities/tuya-inc" target="_blank" data-smartkarma-citation="entities:32158:1" rel="noopener">Tuya Inc (TUYA US)</a>  has set the terms for its IPO where it plans to issue 43.6m ADS’ at an indicative IPO price range of US$17-20 per ADS. At the midpoint of the above price range, Tuya will raise net proceeds of US$770.72m (approx. US$887m if underwriter’s exercise their overallotment option) at a market capitalisation of US$10.36bn and a post-money valuation of US$9.4bn.</p><table class="table table-striped"><tbody>
<tr><td colspan="2" style="width: 112.0pt;"><p><strong>TUYA IPO Details</strong></p></td></tr>
<tr>
<td style="width: 62.0pt;"><p>No. of ADSs Issued</p></td>
<td style="width: 50.0pt;"><p style="text-align: right;">43,590,000</p></td>
</tr>
<tr>
<td style="width: 62.0pt;"><p>Ordinary Shares per ADS</p></td>
<td style="width: 50.0pt;"><p style="text-align: right;">1</p></td>
</tr>
<tr>
<td style="width: 62.0pt;"><p>Shares Outstanding Post IPO</p></td>
<td style="width: 50.0pt;"><p style="text-align: right;">559,760,081</p></td>
</tr>
<tr>
<td style="width: 62.0pt;"><p>Offer as a % of Outstanding Shares</p></td>
<td style="width: 50.0pt;"><p style="text-align: right;">7.79%</p></td>
</tr>
<tr>
<td style="width: 62.0pt;"><p>Price per ADS (US$)</p></td>
<td style="width: 50.0pt;"><p style="text-align: right;">17-20</p></td>
</tr>
<tr>
<td style="width: 62.0pt;"><p>Net Proceeds from IPO (US$m)</p></td>
<td style="width: 50.0pt;"><p style="text-align: right;">770.72</p></td>
</tr>
<tr>
<td style="width: 62.0pt;"><p>Market Capitalisation (US$m)</p></td>
<td style="width: 50.0pt;"><p style="text-align: right;">9,516-11,195</p></td>
</tr>
<tr>
<td style="width: 62.0pt;"><p>Enterprise Value (US$m)</p></td>
<td style="width: 50.0pt;"><p style="text-align: right;">8,565-10,245</p></td>
</tr>
</tbody></table><p><em>Source: Company Disclosures, LSR (Net proceeds is at the midpoint of the IPO price of US$18.5 per share, EV is after adjusting for net cash and net IPO proceeds)</em></p><p>Tuya plans to use the net proceeds from the IPO on R&amp;D, investing on technology infrastructure, marketing and branding and other general corporate purposes.</p><p>The company’s IPO also has got a strong line-up of cornerstone investors including Tencent, Hillhouse Capital, Gaoling Fund, Tiger Global Management, etc. who have agreed to subscribe for an aggregate of at least US$500m of the ADS’ offered at the IPO.</p>

Tuya Inc (TUYA US)  has set the terms for its IPO where it plans to issue 43.6m ADS’ at an indicative IPO price range of US$17-20 per ADS. At the midpoint of the above price range, Tuya will raise net proceeds of US$770.72m (approx. US$887m if underwriter’s exercise their overallotment option) at a market capitalisation of US$10.36bn and a post-money valuation of US$9.4bn.
TUYA IPO Details

No. of ADSs Issued
43,590,000


Ordinary Shares per ADS
1


Shares Outstanding Post IPO
559,760,081


Offer as a % of Outstanding Shares
7.79%


Price per ADS (US$)
17-20


Net Proceeds from IPO (US$m)
770.72


Market Capitalisation (US$m)
9,516-11,195


Enterprise Value (US$m)
8,565-10,245

Source: Company Disclosures, LSR (Net proceeds is at the midpoint of the IPO price of US$18.5 per share, EV is after adjusting for net cash and net IPO proceeds)Tuya plans to use the net proceeds from the IPO on R&amp;D, investing on technology infrastructure, marketing and branding and other general corporate purposes.The company’s IPO also has got a strong line-up of cornerstone investors including Tencent, Hillhouse Capital, Gaoling Fund, Tiger Global Management, etc. who have agreed to subscribe for an aggregate of at least US$500m of the ADS’ offered at the IPO.

Tuya IPO Valuation: Market Leadership and China IoT Exposure Justify Expensive Multiples

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<p>Tuya announced its IPO pricing range, which is expected to be between $17 to $20 per share. Tuya plans to raise $806 million offering 43.6 million ADS. At the mid-point of the IPO price range, Tuya's implied market cap would be $10.4 billion. At the high end of the IPO price range of $20 per share, the company would be valued at $11.2 billion. This assumes fully diluted shares outstanding of 562.2 million. </p><div class="content-highlight"><p>Our base case and high case implied market caps of the company are $11.3 billion ($20.1 per share) and $17.4 billion ($31 per share), respectively. <strong>We do believe that there will be a nice first day pop for this IPO and expect its market cap could reach the high end of the valuation sensitivity analysis ($17.4 billion or $30 per share).</strong> In the first few days of trading post IPO, we expect the company's market cap to be trading in the mid-to-high end of our valuation analysis ($20.1 to $30 per share). We have a positive view of the Tuya IPO. </p></div>

Tuya announced its IPO pricing range, which is expected to be between $17 to $20 per share. Tuya plans to raise $806 million offering 43.6 million ADS. At the mid-point of the IPO price range, Tuya's implied market cap would be $10.4 billion. At the high end of the IPO price range of $20 per share, the company would be valued at $11.2 billion. This assumes fully diluted shares outstanding of 562.2 million. Our base case and high case implied market caps of the company are $11.3 billion ($20.1 per share) and $17.4 billion ($31 per share), respectively. We do believe that there will be a nice first day pop for this IPO and expect its market cap could reach the high end of the valuation sensitivity analysis ($17.4 billion or $30 per share). In the first few days of trading post IPO, we expect the company's market cap to be trading in the mid-to-high end of our valuation analysis ($20.1 to $30 per share). We have a positive view of the Tuya IPO. 

Tuya: A Pure-Play IoT PaaS/SaaS Player Announces IPO Pricing Range

United States

Twilio Inc. develops and publishes Internet infrastructure solutions. The Company offers cloud computing platform that allow web developers to integrate phone calls, Internet protocol voice communications, and text messages into web, mobile, and phone applications. Twilio serves customers worldwide.

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Twilio (TWLO US)

Tuya IPO Trading Update: Recent Drop in Stock Price Offers a Good Entry Point

Though Tuya’s IPO had a strong debut on the first two days of trading, it was short-lived and the current drop in the company’s trading multiples...

Shifara Samsudeen, ACMA, CGMA

Tuya IPO: Trading Debut

Tuya has priced its IPO at $21 per ADS above the marketed range of $17-20 per ADS. Our sensitivity analysis points to a meaningful upside based on...

Arun George

Tuya (涂鸦智能) IPO Trading - Strong Momentum but Watch Out for the Post Debut Fizzle

Tuya Inc (TUYA US) raised about US$915m in its US IPO, priced at US$21 per ADS, above the top end of its initial price range.

Zhen Zhou, Toh

Tuya IPO Valuation: Market Leadership and China IoT Exposure Justify Expensive Multiples

Though Tuya’s implied LTM revenue multiple is at a premium to peers, Tuya’s best years are yet to come as the IoT PaaS and SaaS markets in China...

Shifara Samsudeen, ACMA, CGMA

Tuya: A Pure-Play IoT PaaS/SaaS Player Announces IPO Pricing Range

In the first few days of trading post IPO, we expect the company's market cap to be trading in the mid-to-high end of our valuation analysis ($20.1...

Douglas Kim

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