Forensic Analyst, Trudence Capital Advisors

Nitin Mangal

Forensic Analyst

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/zomato-media-pvt" target="_blank" rel="noopener">Zomato (ZOM IN)</a> , a Gurgaon based start-up, is launching its IPO, which is perceived to be one of the most excited events in 2021. Such is the familiarity of this company, which is one of the pioneers in food-delivery cum restaurant aggregator tech platform in India. </p>
<p>Zomato has increased multifold in the last decade. Backed by some of the headline investors which include but not limited to <a href="https://www.smartkarma.com/entities/info-edge-india-ltd" target="_blank" data-smartkarma-citation="entities:14461:1" rel="noopener">Info Edge India (INFOE IN)</a> , <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> , <a href="https://www.smartkarma.com/entities/uber-technologies-inc" target="_blank" data-smartkarma-citation="entities:430:1" rel="noopener">Uber (UBER US)</a>, Ant Financial, Sequoia, Tiger Global, Fidelity etc., the company has reached a valuation of $5.9 bn in Feb'21. As the company becomes the ray of hope for several promising consumer tech and internet companies in India, the IPO is expected to be the one that receives great attention.</p>
<p>Zomato's revenues may have grown at the rate of knots since F18, it is imperative to know that the company is still at a cash burn stage, delivering negative EBITDA. But there are many more cautions one should be aware of, ranging from accounting changes to volatile balance sheet to poor investments. Like always, we do not comment on the valuation of IPO.</p>

Zomato (ZOM IN) , a Gurgaon based start-up, is launching its IPO, which is perceived to be one of the most excited events in 2021. Such is the familiarity of this company, which is one of the pioneers in food-delivery cum restaurant aggregator tech platform in India. 
Zomato has increased multifold in the last decade. Backed by some of the headline investors which include but not limited to Info Edge India (INFOE IN) , Alibaba Group (9988 HK) , Uber (UBER US), Ant Financial, Sequoia, Tiger Global, Fidelity etc., the company has reached a valuation of $5.9 bn in Feb'21. As the company becomes the ray of hope for several promising consumer tech and internet companies in India, the IPO is expected to be the one that receives great attention.
Zomato's revenues may have grown at the rate of knots since F18, it is imperative to know that the company is still at a cash burn stage, delivering negative EBITDA. But there are many more cautions one should be aware of, ranging from accounting changes to volatile balance sheet to poor investments. Like always, we do not comment on the valuation of 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><a href="https://www.smartkarma.com/entities/ximalaya-inc" target="_blank" data-smartkarma-citation="entities:33232:1" rel="noopener">Ximalaya (XIMA US)</a>, the largest online audio platform in China, is looking to raise around US$1bn in its US listing. </p></div><div><p>As of 1Q21, it had 250m average MAUs, which included 104m mobile MAUs through its apps and 146m MAUs through internet-of-things (IoT) and other third-party platforms. As per CIC, it accounted for 75% of total mobile listening time among all online audio platforms in China. It had 5.2m active content creators in 2020.</p></div><div>
<p>We have covered various aspects of the deal in our previous notes:<a href="https://www.smartkarma.com/insights/ximalaya-pre-ipo-the-positives-a-whole-lot-of-listening" target="_blank" rel="noopener"></a></p>
<ul>
<li>
<a href="https://www.smartkarma.com/insights/ximalaya-pre-ipo-the-positives-a-whole-lot-of-listening" target="_blank" rel="noopener"> Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening</a><a href="https://www.smartkarma.com/insights/ximalaya-pre-ipo-the-negatives" target="_blank" rel="noopener"></a>
</li>
<li><a href="https://www.smartkarma.com/insights/ximalaya-pre-ipo-the-negatives" target="_blank" rel="noopener">Ximalaya Pre-IPO - The Negatives</a></li>
<li><a href="https://www.smartkarma.com/insights/ximalaya-pre-ipo-peer-comparison" target="_blank" rel="noopener">Ximalaya Pre-IPO - Peer Comparison</a></li>
<li><a href="https://www.smartkarma.com/insights/ximalaya-xima-has-large-market-share-but-small-competitors-have-big-bosses" target="_blank" rel="noopener">Ximalaya (XIMA): Has Large Market Share, But Small Competitors Have Big Bosses</a></li>
</ul>
</div><div><p>In this note, we will talk about earnings and valuation.</p></div>

Ximalaya (XIMA US), the largest online audio platform in China, is looking to raise around US$1bn in its US listing. As of 1Q21, it had 250m average MAUs, which included 104m mobile MAUs through its apps and 146m MAUs through internet-of-things (IoT) and other third-party platforms. As per CIC, it accounted for 75% of total mobile listening time among all online audio platforms in China. It had 5.2m active content creators in 2020.
We have covered various aspects of the deal in our previous notes:


 Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening

Ximalaya Pre-IPO - The Negatives
Ximalaya Pre-IPO - Peer Comparison
Ximalaya (XIMA): Has Large Market Share, But Small Competitors Have Big Bosses

In this note, we will talk about earnings and valuation.

Ximalaya Pre-IPO - Earnings Forecast and Valuation

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.

<p><a href="https://www.smartkarma.com/entities/qiniu-ltd" target="_blank" data-smartkarma-citation="entities:33236:1" rel="noopener">Qiniu (QNIU US)</a> is China's leading cloud-based Platform-as-a-Service (PaaS) provider. Qiniu primarily offers Media Platform-as-a-Service (MPaaS) for intelligent media solutions and Data Platform-as-a-Service (DPaaS) for machine data solutions. It is China's largest pure-play PaaS provider with a 4.4% market share and China's largest independent MPaaS provider with a 7.5% market share by revenue in 2020, according to Frost &amp; Sullivan.</p><p>Qiniu is backed by <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a> (17.7% of outstanding shares), Matrix Partners (8.0%) Qiming Funds (6.8%). Qiniu has filed for a Nasdaq IPO to raise proceeds of $500 million, according to press reports. </p><div class="content-highlight"><p>At first glance, Qiniu should be well-positioned to benefit from this sizeable China's PaaS market opportunity. The strong dollar-based net expansion rate and shift to profitability (based on the company’s adjusted EBITDA metric) and cash generation in 2020 suggests that Qiniu is heading in the right direction. However, a closer look reveals concerning developments on several fronts. In the current market where sentiment on Chinese US listings is weak, we think that the negatives in the Qiniu story warrant a pass.  </p></div>

Qiniu (QNIU US) is China's leading cloud-based Platform-as-a-Service (PaaS) provider. Qiniu primarily offers Media Platform-as-a-Service (MPaaS) for intelligent media solutions and Data Platform-as-a-Service (DPaaS) for machine data solutions. It is China's largest pure-play PaaS provider with a 4.4% market share and China's largest independent MPaaS provider with a 7.5% market share by revenue in 2020, according to Frost &amp; Sullivan.Qiniu is backed by Alibaba Group (BABA US) (17.7% of outstanding shares), Matrix Partners (8.0%) Qiming Funds (6.8%). Qiniu has filed for a Nasdaq IPO to raise proceeds of $500 million, according to press reports. At first glance, Qiniu should be well-positioned to benefit from this sizeable China's PaaS market opportunity. The strong dollar-based net expansion rate and shift to profitability (based on the company’s adjusted EBITDA metric) and cash generation in 2020 suggests that Qiniu is heading in the right direction. However, a closer look reveals concerning developments on several fronts. In the current market where sentiment on Chinese US listings is weak, we think that the negatives in the Qiniu story warrant a pass.  

Event-Driven

<div>
<p>Today morning <a href="https://www.smartkarma.com/entities/prosus-nv-75c7a0c4-16ff-4433-a40f-25ae5b24077d" target="_blank" data-smartkarma-citation="entities:28498:1" rel="noopener">Prosus NV (PROSY US) </a>announced that it would acquire 45.4% of <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)'s </a> issued N Share capital through a voluntary offer to be settled with newly issued Prosus Shares. This will result in Prosus owning 49.5% of Naspers, which in turn will still own 57.2% of Prosus.</p>
<p>In this note, we will look at the current structure revamp.</p>
<p>We have looked at Prosus in the past as a part of covering the Tencent placement, our last note was <a href="https://www.smartkarma.com/insights/tencent-placement-and-the-holdco-implications-deal-almost-done-now-what" target="_blank" rel="noopener">Tencent Placement and the Holdco Implications - Deal Almost Done, Now What?.</a></p>
</div>


Today morning Prosus NV (PROSY US) announced that it would acquire 45.4% of Naspers (NPN SJ)'s  issued N Share capital through a voluntary offer to be settled with newly issued Prosus Shares. This will result in Prosus owning 49.5% of Naspers, which in turn will still own 57.2% of Prosus.
In this note, we will look at the current structure revamp.
We have looked at Prosus in the past as a part of covering the Tencent placement, our last note was Tencent Placement and the Holdco Implications - Deal Almost Done, Now What?.


Prosus/Naspers Holdco - Round Tripping US$46bn

Global TMT analyst with Asia ex-Japan focus.

Mitchell Kim

Equity Bottom-Up

<p>While AML (Anti- Monopoly Law) posed as a share overhang first on <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a> starting late 2020, the regulator's recent focus shifted towards the smaller e-commerce platforms, Pin Duo Duo and Meituan. </p><p>On Monday, 10 May 2021, Shanghai Consumer Council, a quasi-government consumer protection agency, called a meeting with <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> and <a href="https://www.smartkarma.com/entities/pinduoduo-inc" target="_blank" data-smartkarma-citation="entities:27250:1" rel="noopener">Pinduoduo (PDD US)</a> representatives to address counterfeit goods and consumers' and laborers' complaints, according to Wall Street Journal.  PDD and Meituan shares fell 9% and 7%, respectively, on the day, although PDD shares recovered some grounds on Tuesday.    </p><p>Unlike the share overhang lifting for Alibaba with the announcement of the historic fine on 10 April, I believe share overhang will continue to plague the PDD shares as the uncertainty persists.  This is one of the reasons I maintain my cautious stance on the stock.  </p><p>I flagged in my Webinar on PDD, <a href="https://www.smartkarma.com/insights/smartkarma-webinar-pinduoduo-pdd-us-know-when-to-fold" target="_blank" data-smartkarma-citation="insights:49910" rel="noopener">Smartkarma Webinar | Pinduoduo (PDD US): Know When to Fold</a> on 7 April, that AML risk could be even more impactful for the leading group buying platform because of its greater reliance on promotions and marketing subsidies which is one of the target violation investigations.  Moreover, I continue to be cautious about the stock because of its expensive valuation (P/Sales) and the risk of deteriorating investors' sentiment as revenue growth decelerates. </p><p><strong>My previous reports on Pin Duo Duo: </strong></p><p><a href="https://www.smartkarma.com/insights/china-e-commerce-robust-consumption-data-hints-at-online-spending-spree" target="_blank" data-smartkarma-citation="insights:50798" rel="noopener">China E-Commerce: Robust Consumption Data Hints at Online Spending Spree</a> </p><p><a href="https://www.smartkarma.com/insights/pin-duo-duo-pdd-us-four-charts-to-make-you-want-to-run" target="_blank" data-smartkarma-citation="insights:49333" rel="noopener">Pin Duo Duo (PDD US): Four Charts To Make You Want to Run</a></p><p><a href="https://www.smartkarma.com/insights/pinduoduo-pdd-us-know-when-to-fold-know-when-to-run" target="_blank" data-smartkarma-citation="insights:48659" rel="noopener">Pinduoduo (PDD US): Know When to Fold, Know When to Run</a>        </p>

While AML (Anti- Monopoly Law) posed as a share overhang first on Alibaba Group (BABA US) starting late 2020, the regulator's recent focus shifted towards the smaller e-commerce platforms, Pin Duo Duo and Meituan. On Monday, 10 May 2021, Shanghai Consumer Council, a quasi-government consumer protection agency, called a meeting with Meituan (3690 HK) and Pinduoduo (PDD US) representatives to address counterfeit goods and consumers' and laborers' complaints, according to Wall Street Journal.  PDD and Meituan shares fell 9% and 7%, respectively, on the day, although PDD shares recovered some grounds on Tuesday.    Unlike the share overhang lifting for Alibaba with the announcement of the historic fine on 10 April, I believe share overhang will continue to plague the PDD shares as the uncertainty persists.  This is one of the reasons I maintain my cautious stance on the stock.  I flagged in my Webinar on PDD, Smartkarma Webinar | Pinduoduo (PDD US): Know When to Fold on 7 April, that AML risk could be even more impactful for the leading group buying platform because of its greater reliance on promotions and marketing subsidies which is one of the target violation investigations.  Moreover, I continue to be cautious about the stock because of its expensive valuation (P/Sales) and the risk of deteriorating investors' sentiment as revenue growth decelerates. My previous reports on Pin Duo Duo: China E-Commerce: Robust Consumption Data Hints at Online Spending Spree Pin Duo Duo (PDD US): Four Charts To Make You Want to RunPinduoduo (PDD US): Know When to Fold, Know When to Run        

Pin Duo Duo (PDD US): Whipping in the Wind

China

Alibaba Group Holding Limited provides online sales services. The Company provides internet infrastructure, electronic commerce, online financial, and internet content services through its subsidiaries. Alibaba Group Holding offers its products and services worldwide.

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Alibaba (BABA US)

Zomato IPO: Caution Before Frenzy

Zomato's revenues may have grown at the rate of knots since F18. But there are many more cautions one should be aware of, ranging from accounting...

Nitin Mangal

Ximalaya Pre-IPO - Earnings Forecast and Valuation

Ximalaya (XIMA US), the largest online audio platform in China, is looking to raise around US$1bn in its US listing. As of 1Q21, it had 250m...

Sumeet Singh

Qiniu IPO Initiation: A PasS

Qiniu has filed for a Nasdaq IPO to raise proceeds of $500 million, according to press reports. We think that the several negatives in the Qiniu...

Arun George

Prosus/Naspers Holdco - Round Tripping US$46bn

Prosus announced that it would acquire 45.4% of Naspers via a voluntary offer to be settled with new Prosus Shares. This will result in Prosus...

Sumeet Singh

Pin Duo Duo (PDD US): Whipping in the Wind

Pin Duo Duo shares were rocked on Monday by the news that regulators called PDD to warn about counterfeit goods. Find out why regulatory risk and...

Mitchell Kim

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