Asia Consumer Research, Investory

Devi Subhakesan

Asia Consumer Research

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

Equity Capital Markets

FSN E-Commerce Ventures (Nykaa) / Equity Capital Markets

<p>In this insight, we analyze <a href="https://www.smartkarma.com/entities/fsn-e-commerce-ventures-nykaa" target="_blank" data-smartkarma-citation="entities:33796:1" rel="noopener">FSN E-Commerce Ventures (Nykaa)</a> 's IPO by valuing its two distinctly different businesses - Beauty &amp; Personal care (BPC) and Fashion - separately, based on two sets of peer valuation. We also share our GMV (Gross Merchandise Value) projections for <a href="https://www.smartkarma.com/entities/fsn-e-commerce-ventures-nykaa" target="_blank" data-smartkarma-citation="entities:33796:1" rel="noopener">FSN E-Commerce Ventures (Nykaa)</a> based on a bottom-up analysis using key operational metrics of Beauty &amp; Personal care (BPC) and Fashion retail. We also ran a rationality check on our projections by comparing them with top-down analysis. See detailed tables in the report below.</p><p>A key challenge that investors face in valuing Nykaa is the lack of listed comparable peers. We note that Nykaa's established BPC business is comparable to any high growth-high margin branded consumer, retail play in India given a similar operating structure. However, its emerging fashion retail is run as a marketplace with much stronger growth potential but at lower margins. Hence online consumer marketplace operators like <a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" data-smartkarma-citation="entities:28820:1" rel="noopener">Zomato (ZOMATO IN)</a> could be a better fit for its peer comparison.</p><p>For background read on the company's key strengths, concerns, and competitive landscape, please refer to our earlier insight <a href="https://www.smartkarma.com/insights/fsn-ecommerce-nykaa-ipo-glowing-beauty-growing-fashion-a-primer" target="_blank" data-smartkarma-citation="insights:55547" rel="noopener">FSN ECommerce (Nykaa) IPO: Glowing Beauty, Growing Fashion. A Primer.</a></p>

In this insight, we analyze FSN E-Commerce Ventures (Nykaa) 's IPO by valuing its two distinctly different businesses - Beauty &amp; Personal care (BPC) and Fashion - separately, based on two sets of peer valuation. We also share our GMV (Gross Merchandise Value) projections for FSN E-Commerce Ventures (Nykaa) based on a bottom-up analysis using key operational metrics of Beauty &amp; Personal care (BPC) and Fashion retail. We also ran a rationality check on our projections by comparing them with top-down analysis. See detailed tables in the report below.A key challenge that investors face in valuing Nykaa is the lack of listed comparable peers. We note that Nykaa's established BPC business is comparable to any high growth-high margin branded consumer, retail play in India given a similar operating structure. However, its emerging fashion retail is run as a marketplace with much stronger growth potential but at lower margins. Hence online consumer marketplace operators like Zomato (ZOMATO IN) could be a better fit for its peer comparison.For background read on the company's key strengths, concerns, and competitive landscape, please refer to our earlier insight FSN ECommerce (Nykaa) IPO: Glowing Beauty, Growing Fashion. A Primer.

FSN Ecommerce IPO Valuation: Nykaa Can Be Appetizing if You Liked Zomato

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>FSN E-commerce (Nykaa) aims to raise around US$720m, via selling a mix of primary and secondary shares in its Indian IPO. Nykaa is a lifestyle focussed e-commerce platform and consumer brand offering a portfolio of beauty, personal care and fashion products, including its own branded products. As per RedSeer, it was the largest Specialty Beauty and Personal Care Platform in India in terms of value of products sold in FY21.</p><p>As of March 21, it had 43.7m cumulative downloads across all its mobile applications. Its offline channel comprises 73 physical stores across 38 cities in India. It reported a gross merchandise value (GMV) of INR40,459.8m (around US$550m) in FY21. </p><p>Nykaa’s GMV, revenue and gross profit have more than doubled over FY19-21, even though the company suffered from a drop in orders due to COVID-19 in 4Q20 and 1Q21. Overall, GMV grew by 62.7% in FY20 and 50.7% in FY21. Revenue growth has broadly kept pace with GMV growth while the company has managed to turn a profit in FY21. </p><p>We have looked at various aspects of the deal in our previous note,<a href="https://www.smartkarma.com/insights/fsn-e-commerce-nykaa-pre-ipo-mixed-bag-fashion-growing-beauty-slowing" target="_blank" rel="noopener"> FSN E-Commerce (Nykaa) Pre-IPO - Mixed bag - Fashion growing, beauty slowing</a>. In this note, we will talk about valuations.</p>

FSN E-commerce (Nykaa) aims to raise around US$720m, via selling a mix of primary and secondary shares in its Indian IPO. Nykaa is a lifestyle focussed e-commerce platform and consumer brand offering a portfolio of beauty, personal care and fashion products, including its own branded products. As per RedSeer, it was the largest Specialty Beauty and Personal Care Platform in India in terms of value of products sold in FY21.As of March 21, it had 43.7m cumulative downloads across all its mobile applications. Its offline channel comprises 73 physical stores across 38 cities in India. It reported a gross merchandise value (GMV) of INR40,459.8m (around US$550m) in FY21. Nykaa’s GMV, revenue and gross profit have more than doubled over FY19-21, even though the company suffered from a drop in orders due to COVID-19 in 4Q20 and 1Q21. Overall, GMV grew by 62.7% in FY20 and 50.7% in FY21. Revenue growth has broadly kept pace with GMV growth while the company has managed to turn a profit in FY21. We have looked at various aspects of the deal in our previous note, FSN E-Commerce (Nykaa) Pre-IPO - Mixed bag - Fashion growing, beauty slowing. In this note, we will talk about valuations.

FSN E-Commerce (Nykaa) IPO - Beauty Showing Signs of Improvement but Its Too Expensive for Our Taste

<p>PB Fintech (PBF), India’s largest online platform for insurance and lending products, aims to raise up to US$800m via selling a mix of primary and secondary shares in its India IPO. The company is backed by a strong set of investors including Info Edge, Tencent, Temasek, Tiger Global and Softbank.</p><p>The company operates two platforms: Policybazaar operates in India’s online insurance product and service industry; and Paisabazaar platform operates in India’s online credit industry. As per Frost &amp; Sullivan, the company is a leader in the online sphere in both segments. </p><p>In our previous note, we spoke about the positive aspects of the deal, <a href="https://www.smartkarma.com/insights/pb-fintech-policybazaar-pre-ipo-the-positives-fast-growth" target="_blank" rel="noopener">PB Fintech (Policybazaar) Pre-IPO - The Positives - Fast Growth</a>.</p><p>In this note, we will talk about the not so positive aspects.</p>

PB Fintech (PBF), India’s largest online platform for insurance and lending products, aims to raise up to US$800m via selling a mix of primary and secondary shares in its India IPO. The company is backed by a strong set of investors including Info Edge, Tencent, Temasek, Tiger Global and Softbank.The company operates two platforms: Policybazaar operates in India’s online insurance product and service industry; and Paisabazaar platform operates in India’s online credit industry. As per Frost &amp; Sullivan, the company is a leader in the online sphere in both segments. In our previous note, we spoke about the positive aspects of the deal, PB Fintech (Policybazaar) Pre-IPO - The Positives - Fast Growth.In this note, we will talk about the not so positive aspects.

PB Fintech (Policybazaar) Pre-IPO - The Negatives - Patchy Data, Strategy Missteps

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/fsn-e-commerce-ventures-nykaa" target="_blank" data-smartkarma-citation="entities:33796:1" rel="noopener">FSN E-Commerce Ventures (Nykaa) (1003622D IN)</a> provides e-retailing of beauty and fashion products through two verticals Nykaa (beauty and personal care) and Nykaa Fashion (apparel and accessories). Nykaa is the largest speciality beauty and personal care platform in India as measured by the value of products sold in the FY21 and in 5MFY22 (five months ending August), according to RedSeer.   </p></div><div>
<p>Nykaa will launch its IPO on 28 October. The IPO comprises a primary raise of Rs6,300 million ($84 million) with the remainder 42.0 million secondary shares. At the indicative price range of Rs1,085-1,125 per share, the gross proceeds are Rs51.8-53.2 billion ($691-714 million). An anchor placement of up to Rs23.4 billion ($312 million) will open on 27 October, and the IPO will close on 1 November. </p>
<p>In <a href="https://www.smartkarma.com/insights/nykaa-ipo-initiation-beauty-parade" target="_blank" data-smartkarma-citation="insights:58791" rel="noopener">Nykaa IPO Initiation: Beauty Parade</a>, we stated that Nykaa has a strong positioning in India’s e-commerce beauty products industry, underpinned by the strong brand recognition of the ‘Nykaa’ brand. The financial performance is solid with strong growth, rising margins and cash generation. These characteristics should enable Nykaa to hold its own against intensifying competition. We concluded that Nykaa has attractive fundamentals.</p>
</div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/nykaa-ipo-on-trend" target="_blank" data-smartkarma-citation="insights:59407" rel="noopener">Nykaa IPO: On Trend</a>, we stated that the recent results from the updated prospectus reinforce our view that Nykaa has the ability to deliver strong profitable growth. Our valuation analysis suggests that the IPO price range is attractive.</p></div></div>

FSN E-Commerce Ventures (Nykaa) (1003622D IN) provides e-retailing of beauty and fashion products through two verticals Nykaa (beauty and personal care) and Nykaa Fashion (apparel and accessories). Nykaa is the largest speciality beauty and personal care platform in India as measured by the value of products sold in the FY21 and in 5MFY22 (five months ending August), according to RedSeer.   
Nykaa will launch its IPO on 28 October. The IPO comprises a primary raise of Rs6,300 million ($84 million) with the remainder 42.0 million secondary shares. At the indicative price range of Rs1,085-1,125 per share, the gross proceeds are Rs51.8-53.2 billion ($691-714 million). An anchor placement of up to Rs23.4 billion ($312 million) will open on 27 October, and the IPO will close on 1 November. 
In Nykaa IPO Initiation: Beauty Parade, we stated that Nykaa has a strong positioning in India’s e-commerce beauty products industry, underpinned by the strong brand recognition of the ‘Nykaa’ brand. The financial performance is solid with strong growth, rising margins and cash generation. These characteristics should enable Nykaa to hold its own against intensifying competition. We concluded that Nykaa has attractive fundamentals.
In Nykaa IPO: On Trend, we stated that the recent results from the updated prospectus reinforce our view that Nykaa has the ability to deliver strong profitable growth. Our valuation analysis suggests that the IPO price range is attractive.

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

<p><a href="https://www.smartkarma.com/entities/adani-wilmar" target="_blank" data-smartkarma-citation="entities:34763:1" rel="noopener">Adani Wilmar (6596700Z IN)</a> is looking to raise up to US$605m in its upcoming India IPO. </p><p>Adani Wilmar is a leading agribusiness company incorporated as a 50-50 joint venture between Adani Group and Wilmar International. The firm offers essential kitchen commodities for Indian consumers and as per Technopak, Fortune, the firm’s flagship brand, is the largest selling edible oil brand in India. The firm generates revenue via its three main product categories, edible oils, packaged foods and FMCG, and industry essentials. </p><p>Adani Wilmar is currently the market leader in most categories it operates in, even for the packaged foods and FMCG segment, which it entered only in 2013 and 2020, respectively. However, operating margins weakened in FY21 and the firm seems to have a case of underutilised assets which it seeks to continue expanding. Disclosure of data has also been subpar, to say the least.</p>

Adani Wilmar (6596700Z IN) is looking to raise up to US$605m in its upcoming India IPO. Adani Wilmar is a leading agribusiness company incorporated as a 50-50 joint venture between Adani Group and Wilmar International. The firm offers essential kitchen commodities for Indian consumers and as per Technopak, Fortune, the firm’s flagship brand, is the largest selling edible oil brand in India. The firm generates revenue via its three main product categories, edible oils, packaged foods and FMCG, and industry essentials. Adani Wilmar is currently the market leader in most categories it operates in, even for the packaged foods and FMCG segment, which it entered only in 2013 and 2020, respectively. However, operating margins weakened in FY21 and the firm seems to have a case of underutilised assets which it seeks to continue expanding. Disclosure of data has also been subpar, to say the least.

Adani Wilmar Pre-IPO - Higher Growth Market Could Move This Giant

India

Zomato Limited is an online restaurant guide and food ordering platform. The Company offers platform connects customers, restaurant partners and delivery partners to search and discover restaurants, read and write customer generated reviews, order food delivery, book a table, and make payments while dining-out at restaurants. Zomato serves customers worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Zomato (ZOMATO IN)

FSN Ecommerce IPO Valuation: Nykaa Can Be Appetizing if You Liked Zomato

Segment-wise valuation analysis based on separate peer set to better reflect the distinct operating structures and margin/growth profiles of...

Devi Subhakesan

FSN E-Commerce (Nykaa) IPO - Beauty Showing Signs of Improvement but Its Too Expensive for Our Taste

FSN E-commerce (Nykaa) aims to raise around US$720m in its Indian IPO. In this note, we will look at the recent updates and valuation.

Sumeet Singh

PB Fintech (Policybazaar) Pre-IPO - The Negatives - Patchy Data, Strategy Missteps

PB Fintech (PBF), India’s largest online platform for insurance and lending products, aims to raise up to US$800m via selling a mix of primary and...

Sumeet Singh

Nykaa IPO: Valuation Insights

Nykaa will launch its IPO on 28 October to raise gross proceeds of $691-714 million. Our valuation analysis suggests that the IPO price range is...

Arun George

Adani Wilmar Pre-IPO - Higher Growth Market Could Move This Giant

Adani Wilmar (6596700Z IN) is looking to raise up to US$605m in its upcoming India IPO. Adani Wilmar is incorporated as a 50-50 joint venture...

Clarence Chu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)