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.

Event-Driven

<p><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> is Southeast Asia’s leading super-app and the largest online delivery platform, ride-hailing platform and digital wallet payments platform in Southeast Asia, according to Euromonitor. Grab intends to go public in the US through a SPAC merger with <a href="https://www.smartkarma.com/entities/altimeter-growth-corp" target="_blank" data-smartkarma-citation="entities:33007:1" rel="noopener">Altimeter Growth Corp (AGC US)</a>.</p><p>In <a href="https://www.smartkarma.com/insights/grab-spac-deal-delivering-the-goods" target="_blank" data-smartkarma-citation="insights:50305" rel="noopener">Grab SPAC Deal: Delivering the Goods</a>, we looked at Grab's fundamentals and management forecasts. We noted that Grab is using its super-app status to deliver high-growth with declining loss margin and cash burn. While certain management forecasts seem bullish, the overall forecasts are not outlandish.  </p><p>In this note, we look at the valuation. As a reminder, the deal values Grab at a post-money market cap of $39.6 billion and post-money EV of $31.3 billion. The deal implies 9.6x 2022 EV/Sales based on Grab’s forecasted adjusted net revenue.</p><div class="content-highlight">
<p>At first glance, Grab's implied multiples are eye-watering in comparison to global peers related to its delivery and mobility businesses. However, we think that judging Grab's multiples based on such peers is missing the point. Grab's key competitive advantage and investor pitch is that it can be credibly billed as a super-app rather than just a leading app in a narrow market category.</p>
<p>Super-apps tend to be rare and investors are starved of publicly listed opportunities. With the regulatory heat turned up on the Chinese super-apps, alternative super-app plays in Asia are likely to be in demand. When judged against global super-apps, Grab's implied multiples seems more justifiable for its forecast growth.  </p>
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Grab (0967655D SP) is Southeast Asia’s leading super-app and the largest online delivery platform, ride-hailing platform and digital wallet payments platform in Southeast Asia, according to Euromonitor. Grab intends to go public in the US through a SPAC merger with Altimeter Growth Corp (AGC US).In Grab SPAC Deal: Delivering the Goods, we looked at Grab's fundamentals and management forecasts. We noted that Grab is using its super-app status to deliver high-growth with declining loss margin and cash burn. While certain management forecasts seem bullish, the overall forecasts are not outlandish.  In this note, we look at the valuation. As a reminder, the deal values Grab at a post-money market cap of $39.6 billion and post-money EV of $31.3 billion. The deal implies 9.6x 2022 EV/Sales based on Grab’s forecasted adjusted net revenue.
At first glance, Grab's implied multiples are eye-watering in comparison to global peers related to its delivery and mobility businesses. However, we think that judging Grab's multiples based on such peers is missing the point. Grab's key competitive advantage and investor pitch is that it can be credibly billed as a super-app rather than just a leading app in a narrow market category.
Super-apps tend to be rare and investors are starved of publicly listed opportunities. With the regulatory heat turned up on the Chinese super-apps, alternative super-app plays in Asia are likely to be in demand. When judged against global super-apps, Grab's implied multiples seems more justifiable for its forecast growth.  


Grab SPAC Deal: A Sensible Super-App Valuation?

<p><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> is Southeast Asia’s leading superapp and the largest online delivery platform, ride-hailing platform and digital wallet payments platform in Southeast Asia, according to Euromonitor. Grab is backed by SoftBank Vision Fund (21.7% stake), <a href="https://www.smartkarma.com/entities/uber-technologies-inc" target="_blank" data-smartkarma-citation="entities:430:1" rel="noopener">Uber (UBER US)</a> (16.6%), <a href="https://www.smartkarma.com/entities/didi-chuxing-inc" target="_blank" data-smartkarma-citation="entities:27467:1" rel="noopener">DiDi Chuxing (1284375D CH)</a> (8.7%) and <a href="https://www.smartkarma.com/entities/toyota-motor-corp" target="_blank" data-smartkarma-citation="entities:73:1" rel="noopener">Toyota Motor (7203 JP)</a> (6.9%). </p><p>Grab intends to go public in the US through a SPAC merger with <a href="https://www.smartkarma.com/entities/altimeter-growth-corp" target="_blank" data-smartkarma-citation="entities:33007:1" rel="noopener">Altimeter Growth Corp (AGC US)</a>. The deal proceeds include more than $4.0 billion of fully committed PIPE led by $750 million from Altimeter Capital Management. Investors in the PIPE include BlackRock, Morgan Stanley Investment Management, Fidelity International, FMR, Janus Henderson Investors, Mubadala, Nuveen, Permodalan Nasional Berhad and Temasek. Altimeter will commit to a three-year lock-up period for its sponsor promote shares. </p><p>The deal values Grab at a post-money market cap of $39.6 billion and post-money EV of $31.3 billion. The deal implies 9.6x 2022 EV/Sales based on Grab’s forecasted adjusted net revenue. Post-close of the transaction, the existing Grab shareholders will represent 87.7% of outstanding shares. </p><div class="content-highlight"><p>Over the years, Grab has transformed into a superapp that encompasses transactions related to transportation, eating, shopping, and digital payments. The transactions are high-frequency which tend to increase user stickiness. By spanning several categories, Grab has many opportunities to capture a user’s wallet spend. Grab is using its superapp status to deliver high-growth with declining loss margin and cash burn. While certain management forecasts seem bullish, the overall forecasts are not outlandish. We will look at Grab’s valuation in our next note.</p></div>

Grab (0967655D SP) is Southeast Asia’s leading superapp and the largest online delivery platform, ride-hailing platform and digital wallet payments platform in Southeast Asia, according to Euromonitor. Grab is backed by SoftBank Vision Fund (21.7% stake), Uber (UBER US) (16.6%), DiDi Chuxing (1284375D CH) (8.7%) and Toyota Motor (7203 JP) (6.9%). Grab intends to go public in the US through a SPAC merger with Altimeter Growth Corp (AGC US). The deal proceeds include more than $4.0 billion of fully committed PIPE led by $750 million from Altimeter Capital Management. Investors in the PIPE include BlackRock, Morgan Stanley Investment Management, Fidelity International, FMR, Janus Henderson Investors, Mubadala, Nuveen, Permodalan Nasional Berhad and Temasek. Altimeter will commit to a three-year lock-up period for its sponsor promote shares. The deal values Grab at a post-money market cap of $39.6 billion and post-money EV of $31.3 billion. The deal implies 9.6x 2022 EV/Sales based on Grab’s forecasted adjusted net revenue. Post-close of the transaction, the existing Grab shareholders will represent 87.7% of outstanding shares. Over the years, Grab has transformed into a superapp that encompasses transactions related to transportation, eating, shopping, and digital payments. The transactions are high-frequency which tend to increase user stickiness. By spanning several categories, Grab has many opportunities to capture a user’s wallet spend. Grab is using its superapp status to deliver high-growth with declining loss margin and cash burn. While certain management forecasts seem bullish, the overall forecasts are not outlandish. We will look at Grab’s valuation in our next note.

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.

<p>On 13th Apr 2021, <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> announced that it plans to go public in the US in partnership with Altimeter Growth Corp (AGC US) at an equity valuation of US$39.6bn. It will raise around US$4.5bn cash through the transaction. </p><p>In this note, I'll take a quick look at the numbers and implied valuations.</p>

On 13th Apr 2021, Grab (0967655D SP) announced that it plans to go public in the US in partnership with Altimeter Growth Corp (AGC US) at an equity valuation of US$39.6bn. It will raise around US$4.5bn cash through the transaction. In this note, I'll take a quick look at the numbers and implied valuations.

Grab SPAC Listing - High on Ambition, Very High on Valuation

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

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

<p>One of the many reasons why drivers were lured to join <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> and <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ)</a> is that the app provides content that leads to a higher daily order. Grab went on to become a super App, offering a wide range of services from transport, food delivery to finance including insurance. <a href="https://www.smartkarma.com/entities/uber-technologies-inc" target="_blank" data-smartkarma-citation="entities:430:1" rel="noopener">Uber (UBER US)</a> , a listed peer for <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> and <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ)</a> is currently trading at 8.69x PBR, 500% higher than <a href="https://www.smartkarma.com/entities/comfortdelgro-corp-ltd" target="_blank" data-smartkarma-citation="entities:497:1" rel="noopener">Comfortdelgro Corp (CD SP)</a> at 1.5x PBR. The taxi business contribution to the group's revenue has been reduced to 13-14% to the group's revenue due to the stiff competition from Grab and Gojek as well as from the pandemic.</p><p>Long being dubbed as the proxy to  Singapore's tourism and residents' transport provider stock, the foray into the EV charging station and Smart and Intelligent Mobility Technologies could shift the market's opinion to Autonomous and Electric Vehicle and the stock may trade at a higher multiple. </p>

One of the many reasons why drivers were lured to join Grab (0967655D SP) and Gojek (1379371D IJ) is that the app provides content that leads to a higher daily order. Grab went on to become a super App, offering a wide range of services from transport, food delivery to finance including insurance. Uber (UBER US) , a listed peer for Grab (0967655D SP) and Gojek (1379371D IJ) is currently trading at 8.69x PBR, 500% higher than Comfortdelgro Corp (CD SP) at 1.5x PBR. The taxi business contribution to the group's revenue has been reduced to 13-14% to the group's revenue due to the stiff competition from Grab and Gojek as well as from the pandemic.Long being dubbed as the proxy to  Singapore's tourism and residents' transport provider stock, the foray into the EV charging station and Smart and Intelligent Mobility Technologies could shift the market's opinion to Autonomous and Electric Vehicle and the stock may trade at a higher multiple. 

Comfort Delgro (CD): Zig and EV Charging Station

APAC IPOs & Placements

Zhen Zhou, Toh

Equity Capital Markets

Smart Share Global / Equity Capital Markets

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<p><a href="https://www.smartkarma.com/entities/energy-monster" target="_blank" data-smartkarma-citation="entities:32217:1" rel="noopener">Smart Share Global (EM US)</a> (SSG), also known as Energy Monster, raised about US$150m at US$8.50 per ADS, below the bottom-end of its initial price range. </p>
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<p>SSG is a consumer tech company that provides mobile device charging service through online and offline networks. The company is the largest mobile device charging service provider in China in terms of 2020 gross revenue.</p>
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<p>In this note, we look at deal dynamics and provide an update on valuation.</p>
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<p>Our previous coverage of the IPO:</p>
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<ul style="list-style-type: disc;">
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<a href="https://www.smartkarma.com/insights/smart-share-global-pre-ipo-growing-fast-and-is-profitable-but-competition-is-picking-up" target="_blank" data-smartkarma-citation="insights:49349" rel="noopener">Smart Share Global (怪兽充电) Pre-IPO - Growing Fast and Is Profitable but Competition Is Picking Up</a> </li>
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<a href="https://www.smartkarma.com/insights/smart-share-global-rent-a-power-bank-on-the-ground" target="_blank" data-smartkarma-citation="insights:49438" rel="noopener">Smart Share Global (怪兽充电): Rent A Power Bank on the Ground</a> </li>
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<a href="https://www.smartkarma.com/insights/smart-share-global-pre-ipo-pulling-ahead-in-a-highly-competitive-landscape" target="_blank" data-smartkarma-citation="insights:49585" rel="noopener">Smart Share Global (怪兽充电) Pre-IPO - Pulling Ahead in a Highly Competitive Landscape</a> </li>
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<a href="https://www.smartkarma.com/insights/smart-share-global-pre-ipo-forecasts-assumptions-and-valuation" target="_blank" data-smartkarma-citation="insights:49653" rel="noopener">Smart Share Global (怪兽充电) Pre-IPO - Forecasts, Assumptions, and Valuation</a> </li>
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<a href="https://www.smartkarma.com/insights/smart-share-global-ipo-overcharged" target="_blank" data-smartkarma-citation="insights:49807" rel="noopener">Smart Share Global (怪兽充电) IPO - Overcharged</a> </li>
</ul>
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Smart Share Global (EM US) (SSG), also known as Energy Monster, raised about US$150m at US$8.50 per ADS, below the bottom-end of its initial price range. 


SSG is a consumer tech company that provides mobile device charging service through online and offline networks. The company is the largest mobile device charging service provider in China in terms of 2020 gross revenue.


In this note, we look at deal dynamics and provide an update on valuation.


Our previous coverage of the IPO:




Smart Share Global (怪兽充电) Pre-IPO - Growing Fast and Is Profitable but Competition Is Picking Up 

Smart Share Global (怪兽充电): Rent A Power Bank on the Ground 

Smart Share Global (怪兽充电) Pre-IPO - Pulling Ahead in a Highly Competitive Landscape 

Smart Share Global (怪兽充电) Pre-IPO - Forecasts, Assumptions, and Valuation 

Smart Share Global (怪兽充电) IPO - Overcharged 



Smart Share Global (怪兽充电) IPO Trading - Cheaper Now but Still May Not Be Enough

United States

Uber Technologies Inc provides ride hailing services. The Company develops applications for road transportation, navigation, ride sharing, and payment processing solutions. Uber Technologies serves customers worldwide.

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Uber Technologies (UBER US)

Grab SPAC Deal: A Sensible Super-App Valuation?

Grab's implied multiples are eye-watering in comparison to global peers related to its businesses. When judged against other global super-apps,...

Arun George

Grab SPAC Deal: Delivering the Goods

Grab has announced a SPAC merger with Altimeter Growth Corp which values Grab at a post-money market cap of $39.6 bn. We think that Grab has strong...

Arun George

Grab SPAC Listing - High on Ambition, Very High on Valuation

On 13th Apr 2021, Grab announced that it plans to go public in the US in partnership with Altimeter Growth Corp at an equity valuation of...

Sumeet Singh

Comfort Delgro (CD): Zig and EV Charging Station

Dubbed as the proxy to Singapore's tourism and residents' transport provider stock, the foray into the EV charging station and Smart and...

Henry Soediarko

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Grab SPAC Deal: A Sensible Super-App Valuation?

Grab's implied multiples are eye-watering in comparison to global peers related to its businesses. When judged against other global super-apps,...

Arun George

Grab SPAC Deal: Delivering the Goods

Grab has announced a SPAC merger with Altimeter Growth Corp which values Grab at a post-money market cap of $39.6 bn. We think that Grab has strong...

Arun George

Grab SPAC Listing - High on Ambition, Very High on Valuation

On 13th Apr 2021, Grab announced that it plans to go public in the US in partnership with Altimeter Growth Corp at an equity valuation of...

Sumeet Singh

Comfort Delgro (CD): Zig and EV Charging Station

Dubbed as the proxy to Singapore's tourism and residents' transport provider stock, the foray into the EV charging station and Smart and...

Henry Soediarko

Smart Share Global (怪兽充电) IPO Trading - Cheaper Now but Still May Not Be Enough

Smart Share Global (EM US) (SSG), also known as Energy Monster, raised about US$150m at US$8.50 per ADS, below the bottom-end of its initial price...

Zhen Zhou, Toh