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>  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

<div class="content-highlight"><p><strong>Our comparable companies valuation sensitivity analysis suggests an implied EV range of $6.2 billion to $11.3 billion and implied market cap of $7.3 billion to $12.4 billion for Tuya.</strong></p></div><p>The market is likely to attach valuation multiples that are in the high end range of the comps mainly because Tuya's sales growth is higher than the comps' average. Plus, it is difficult to find companies such as Tuya which specializes in the IoT related PaaS/SaaS products and services and investors are likely to put a premium on the company's strengths.</p><p>Similar to how smartphones and mobile connectivity has changed the world in the past decade, there is a huge amount of interest in IoT (Internet of Things) driven technology which is just starting to get penetrated in businesses around the world. Similar to how smartphones have allowed millions of people to be better "connected", the IoT technology will now enable the "machines to be connected" to the network, enabling greater business efficiencies and new revenue opportunities. </p>

Our comparable companies valuation sensitivity analysis suggests an implied EV range of $6.2 billion to $11.3 billion and implied market cap of $7.3 billion to $12.4 billion for Tuya.The market is likely to attach valuation multiples that are in the high end range of the comps mainly because Tuya's sales growth is higher than the comps' average. Plus, it is difficult to find companies such as Tuya which specializes in the IoT related PaaS/SaaS products and services and investors are likely to put a premium on the company's strengths.Similar to how smartphones and mobile connectivity has changed the world in the past decade, there is a huge amount of interest in IoT (Internet of Things) driven technology which is just starting to get penetrated in businesses around the world. Similar to how smartphones have allowed millions of people to be better "connected", the IoT technology will now enable the "machines to be connected" to the network, enabling greater business efficiencies and new revenue opportunities. 

Tuya IPO - Valuation Sensitivity Analysis

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 (1869782D 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>At the proposed IPO price range of $17-20 per ADS, Tuya will have a market cap of $9.5-11.2 billion. At the mid-point of the IPO price range, the net proceeds are $770.72 million. Tuya has received indications of interest 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) for a total of $500 million worth of ADSs in the offering.</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.</p>
<div class="content-highlight"><p>The mid-point of the IPO price range of $17-20 per ordinary share (each ADS represents one Class A ordinary share) is a 48% and 28% premium to the valuation of the ordinary shares at the last raise ($12.48 - $200 million raise on 1/2 February 2021) and the last valuation exercise ($14.46 - 21 February 2021). While these juicy IPO premiums in a short space of time may turn off potential investors, our valuation analysis suggests that the IPO price range is reasonable but full at the high-end. Overall, we would participate in the IPO. </p></div>
</div>

Tuya Inc (1869782D 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.At the proposed IPO price range of $17-20 per ADS, Tuya will have a market cap of $9.5-11.2 billion. At the mid-point of the IPO price range, the net proceeds are $770.72 million. Tuya has received indications of interest 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) for a total of $500 million worth of ADSs in the offering.
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.
The mid-point of the IPO price range of $17-20 per ordinary share (each ADS represents one Class A ordinary share) is a 48% and 28% premium to the valuation of the ordinary shares at the last raise ($12.48 - $200 million raise on 1/2 February 2021) and the last valuation exercise ($14.46 - 21 February 2021). While these juicy IPO premiums in a short space of time may turn off potential investors, our valuation analysis suggests that the IPO price range is reasonable but full at the high-end. Overall, we would participate in the IPO. 


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.

<div><p>Coupang, one of the largest product e-commerce players in Korea, raised around US$4.2bn in its US listing via a mix of selling primary and secondary shares. </p></div><div><p>In our previous note, links to which are below, we have spoke about various aspects of the deal. In this note, talk about the trading dynamics and provide a valuation table at different  share price levels.</p></div><div><p>We've covered various aspects of the deal in our earlier insights: </p></div><div><ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/coupang-pre-ipo-the-positives-fast-growth-sticky-customers" target="_blank" rel="noopener">Coupang Pre-IPO - The Positives - Fast Growth, Sticky Customers</a>, </li>
<li><a href="https://www.smartkarma.com/insights/coupang-pre-ipo-the-negatives-horrendous-data-disclosures-including-no-mention-of-ott-launch" target="_blank" rel="noopener">Coupang Pre-IPO - The Negatives - Horrendous Data Disclosures, Including No Mention of OTT Launch</a></li>
<li><a href="https://www.smartkarma.com/insights/coupang-pre-ipo-fair-bit-of-competition-but-it-s-doing-better-than-most-local-peers" target="_blank" rel="noopener">Coupang Pre-IPO - Fair Bit of Competition but It’s Doing Better than Most Local Peers</a></li>
<li><a href="https://www.smartkarma.com/insights/coupang-pre-ipo-earnings-forecast-and-valuation" target="_blank" rel="noopener">Coupang Pre-IPO - Earnings Forecast and Valuation</a></li>
<li><a href="https://www.smartkarma.com/insights/coupang-ipo-momentum-play-unequal-lock-up-index-inclusion" target="_blank" rel="noopener">Coupang IPO - Momentum Play, Unequal Lock-Up, Index Inclusion</a></li>
<li><a href="https://www.smartkarma.com/insights/coupang-ipo-quick-note-peers-move-down-range-moves-up-ripe-for-trading" target="_blank" rel="noopener">Coupang IPO - Quick Note - Peers Move Down, Range Moves Up. Ripe for Trading.</a></li>
</ul></div>

Coupang, one of the largest product e-commerce players in Korea, raised around US$4.2bn in its US listing via a mix of selling primary and secondary shares. In our previous note, links to which are below, we have spoke about various aspects of the deal. In this note, talk about the trading dynamics and provide a valuation table at different  share price levels.We've covered various aspects of the deal in our earlier insights: 

Coupang Pre-IPO - The Positives - Fast Growth, Sticky Customers, 
Coupang Pre-IPO - The Negatives - Horrendous Data Disclosures, Including No Mention of OTT Launch
Coupang Pre-IPO - Fair Bit of Competition but It’s Doing Better than Most Local Peers
Coupang Pre-IPO - Earnings Forecast and Valuation
Coupang IPO - Momentum Play, Unequal Lock-Up, Index Inclusion
Coupang IPO - Quick Note - Peers Move Down, Range Moves Up. Ripe for Trading.


Coupang IPO Trading - Most Hit near Term Peak on the First Day - Key Trading/Lock-Up Dates

China

Agora, Inc. provides communication software solutions. The Company offers video, voice, and live interactive streaming platform to interact and engage with others online. Agora serves customers worldwide.

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Agora Inc. (API US)

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

Tuya IPO - Valuation Sensitivity Analysis

Our comparable companies valuation sensitivity analysis suggests an implied EV range of $6.2 billion to $11.3 billion and implied market cap of...

Douglas Kim

Tuya IPO: Valuation Insights

At the mid-point of the IPO price range of $17-20 per ADS, Tuya will raise net proceeds of $771 million. Our analysis suggests that the IPO price...

Arun George

Coupang IPO Trading - Most Hit near Term Peak on the First Day - Key Trading/Lock-Up Dates

Coupang, one of the largest product e-commerce players in Korea, raised around US$4.2bn in its US listing via a mix of selling primary and...

Sumeet Singh

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