Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Nearly 25 years of experience in analyzing hundreds of companies, especially in Asia. Deep expertise in the following sectors:
- Technology (E-commerce, SaaS, Internet)
- Consumer 
- Special Situations/Deep Value Plays
- Holdcos/Stubs
- Asian Unicorns/Private Companies

Korea/Asia, Events, IPOs

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

Equity Capital Markets

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<p><strong>Our base case valuation of Wish is an implied EV of $12.3 billion, implied market cap of $14.4 billion, and implied price per share of $24.50 per share. This represents just a 2% upside to the high end of the IPO price range of $24 per share. Given such a low upside, we would pass on this IPO.</strong></p>
<p><strong>One of the long-term concerns we have about Wish is the fact that the number one priority of the company is price. This is a double-edged sword.</strong> By focusing on price as the number one priority, the company has been able to gain a tremendous number of customers that put price as their number one importance. Nonetheless, it may be difficult for the company to generate relatively high profit margins in the long run since Wish may have difficulties in gaining customers that value quality over price when purchasing products through mobile or online platforms.</p>
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Our base case valuation of Wish is an implied EV of $12.3 billion, implied market cap of $14.4 billion, and implied price per share of $24.50 per share. This represents just a 2% upside to the high end of the IPO price range of $24 per share. Given such a low upside, we would pass on this IPO.
One of the long-term concerns we have about Wish is the fact that the number one priority of the company is price. This is a double-edged sword. By focusing on price as the number one priority, the company has been able to gain a tremendous number of customers that put price as their number one importance. Nonetheless, it may be difficult for the company to generate relatively high profit margins in the long run since Wish may have difficulties in gaining customers that value quality over price when purchasing products through mobile or online platforms.


Wish IPO Valuation Analysis: Focus on Price Is a Double-Edged Sword

ContextLogic

Wish IPO Valuation Analysis: Focus on Price Is a Double-Edged Sword