IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

Arun has over 15 years’ experience covering the Technology sector. During this time, he has worked with technology start-ups and as an equity analyst in investment banks and independent research firms. He was formerly a Technology Analyst for Canaccord Genuity, Altium Securities, Espirito Santo Investment Bank, Noble Group and Clear Capital. He has a dual Master’s degree in Financial Engineering and Industrial and Operations Engineering from the University of Michigan. He obtained his Bachelor’s degree in Mechanical Engineering from the Indian Institute of Technology, Bombay. He is also a CFA charterholder.

IPOs and Catalysts/Events

Full Truck Alliance IPO: Valuation Insights

JD Logistics IPO: Valuation and Forecast Update

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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

Full Truck Alliance   / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/full-truck-alliance" target="_blank" data-smartkarma-citation="entities:33429:1" rel="noopener">Full Truck Alliance (YMM US)</a>, known as Manbang in China, is the world’s largest digital freight platform by gross transaction value (GTV) in 2020, according to CIC. FTA was formed in 2017 through the merger of Yunmanman and Huochebang, which were founded in 2013 and 2011, respectively. FTA is seeking to raise $1.5 billion through an NYSE listing, according to press reports. FTA is backed by SoftBank Vision Fund (22.2% of the outstanding shares), Sequoia Capital (7.2%), Hillhouse and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>. FTA joins peer <a href="https://www.smartkarma.com/entities/foru-worldwide-inc" target="_blank" data-smartkarma-citation="entities:33314:1" rel="noopener">ForU Worldwide (FOYO US)</a> which also recently filed for a $500 million Nasdaq IPO. Confusingly, ForU notes that it is the largest technology-driven road freight transportation platform in China as measured by revenue in 2020, according to CIC. However, comparing FTA and ForU based on reported revenue is an apples-to-oranges comparison due to differing revenue recognition policies. In <a href="https://www.smartkarma.com/insights/foru-worldwide-ipo-initiation-not-foru" target="_blank" data-smartkarma-citation="insights:51888" rel="noopener">ForU Worldwide IPO Initiation: Not ForU</a>, we opined that ForU faces several challenges and the financials on a normalised basis appears to be middling at best.    <div class="content-highlight">At first sight, FTA recent results look stunning due to fast-paced growth, improving margin and cash generation. However, a closer look, suggests that FTA has less than ideal disclosure, a regulatory overhang and potential corporate governance issues. In an environment where sentiment on high-growth stocks and in particular Chinese US tech listings is weak, IPO hopefuls should not provide ready ammunition to the bears. Consequently, we cannot recommend FTA wholeheartedly and inclined to watch this IPO unfold from the sidelines.   </div>

Full Truck Alliance (YMM US), known as Manbang in China, is the world’s largest digital freight platform by gross transaction value (GTV) in 2020, according to CIC. FTA was formed in 2017 through the merger of Yunmanman and Huochebang, which were founded in 2013 and 2011, respectively. FTA is seeking to raise $1.5 billion through an NYSE listing, according to press reports. FTA is backed by SoftBank Vision Fund (22.2% of the outstanding shares), Sequoia Capital (7.2%), Hillhouse and Tencent (700 HK). FTA joins peer ForU Worldwide (FOYO US) which also recently filed for a $500 million Nasdaq IPO. Confusingly, ForU notes that it is the largest technology-driven road freight transportation platform in China as measured by revenue in 2020, according to CIC. However, comparing FTA and ForU based on reported revenue is an apples-to-oranges comparison due to differing revenue recognition policies. In ForU Worldwide IPO Initiation: Not ForU, we opined that ForU faces several challenges and the financials on a normalised basis appears to be middling at best.    At first sight, FTA recent results look stunning due to fast-paced growth, improving margin and cash generation. However, a closer look, suggests that FTA has less than ideal disclosure, a regulatory overhang and potential corporate governance issues. In an environment where sentiment on high-growth stocks and in particular Chinese US tech listings is weak, IPO hopefuls should not provide ready ammunition to the bears. Consequently, we cannot recommend FTA wholeheartedly and inclined to watch this IPO unfold from the sidelines.   

Full Truck Alliance IPO Initiation: A Less than Perfect Delivery