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.

Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/aihuishou" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener">Aihuishou (RERE US)</a> operates the largest pre-owned consumer electronics transactions and services platform in China under the brand “ATRenew”, which stands for “all things renew.” The platform consists of AHS Recycle (an omnichannel business for the collection of pre-owned consumer electronics), PJT Marketplace (B2B channel) and Paipai Marketplace (B2C channel).  AiHuiShou is seeking to raise $500 million to $1 billion through an NYSE listing, according to press reports.   </p></div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/aihuishou-ipo-initiation-turning-the-vicious-cycle-into-a-virtuous-one" target="_blank" data-smartkarma-citation="insights:52617" rel="noopener">AiHuiShou IPO Initiation: Turning the Vicious Cycle into a Virtuous One</a>, we stated that AiHuiShou as the largest player as measured by GMV and transacted devices, is well-positioned to capture its fair share of China's pre-owned consumer electronic devices market opportunity. AiHuiShou is delivering on this market opportunity through strong revenue growth, declining loss margin and improving cash burn. AiHuiShou’s business model will also appeal to investors with an ESG mandate. We concluded that AiHuiShou's story warrants a closer look. In this note, we present our forecasts and take the first look at AiHuiShou's potential valuation range. </p></div></div>

Aihuishou (RERE US) operates the largest pre-owned consumer electronics transactions and services platform in China under the brand “ATRenew”, which stands for “all things renew.” The platform consists of AHS Recycle (an omnichannel business for the collection of pre-owned consumer electronics), PJT Marketplace (B2B channel) and Paipai Marketplace (B2C channel).  AiHuiShou is seeking to raise $500 million to $1 billion through an NYSE listing, according to press reports.   In AiHuiShou IPO Initiation: Turning the Vicious Cycle into a Virtuous One, we stated that AiHuiShou as the largest player as measured by GMV and transacted devices, is well-positioned to capture its fair share of China's pre-owned consumer electronic devices market opportunity. AiHuiShou is delivering on this market opportunity through strong revenue growth, declining loss margin and improving cash burn. AiHuiShou’s business model will also appeal to investors with an ESG mandate. We concluded that AiHuiShou's story warrants a closer look. In this note, we present our forecasts and take the first look at AiHuiShou's potential valuation range. 

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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.

<ul>
<li>We visited Aihuishou (AHS)’s physical stores and their competitors.</li>
<li>We believe AHS store chain has advantage over independent stores.</li>
<li>We also believe AHS store chain has advantage over online platforms.</li>
<li>Handset owners complain low price offers from AHS and all of its competitors.</li>
<li>Also see <a href="https://www.smartkarma.com/insights/aihuishou-pre-ipo-first-stab-at-valuation" target="_blank" data-smartkarma-citation="insights:52539" rel="noopener">AiHuiShou Pre-IPO - First Stab at Valuation</a> and <a href="https://www.smartkarma.com/insights/aihuishou-pre-ipo-mostly-positive-pre-owned-but-well-loved" target="_blank" data-smartkarma-citation="insights:52474" rel="noopener">AiHuiShou Pre-IPO - Mostly Positive - Pre-Owned but Well Loved</a> by <a href="https://www.smartkarma.com/profiles/sumeet-singh" target="_blank" data-smartkarma-citation="accounts:4" rel="noopener">Sumeet Singh</a>.</li>
</ul>


We visited Aihuishou (AHS)’s physical stores and their competitors.
We believe AHS store chain has advantage over independent stores.
We also believe AHS store chain has advantage over online platforms.
Handset owners complain low price offers from AHS and all of its competitors.
Also see AiHuiShou Pre-IPO - First Stab at Valuation and AiHuiShou Pre-IPO - Mostly Positive - Pre-Owned but Well Loved by Sumeet Singh.


Aihuishou (爱回收) Pre-IPO: Pricing My Mobile Handset at Physical Stores

<p><a href="https://www.smartkarma.com/entities/aihuishou" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener">Aihuishou (RERE US)</a> operates the largest pre-owned consumer electronics transactions and services platform in China under the brand “ATRenew”, which stands for “all things renew.” The platform consists of AHS Recycle (an omnichannel business for the collection of pre-owned consumer electronics), PJT Marketplace (B2B channel) and Paipai Marketplace (B2C channel). </p><p>AiHuiShou is seeking to raise $500 million to $1 billion through an NYSE listing, according to press reports. AiHuiShou is backed by <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a> (34.7% of the outstanding shares), Morningside China (14.0%), Shunwei China Internet Fund IV (7.3%) and Tian Tu Capital (8.5%). </p><p>There are 2,615 million consumer electronic devices in circulation that still have use-value in China in 2020, which 3x times the 869 million devices in circulation in the US, according to CIC. This huge volume of devices in circulation has supported the demand for second-hand or pre-owned devices in China. Currently, the penetration rate of traded pre-owned devices relative to the number of consumer electronic devices in circulation is a low 3.7% in 2020. However, this rate is forecasted to reach 9.4% by 2025, and the market is expected to grow at a 30.8% CAGR from 2020 to 2025 to reach RMB967.3 billion by 2025, according to CIC. </p><div class="content-highlight"><p>AiHuiShou as the largest player as measure by GMV and transacted devices is well-positioned to capture this market opportunity. AiHuiShou is delivering on this market opportunity through strong revenue growth, declining loss margin and improving cash burn. AiHuiShou’s business model will also appeal to investors with an ESG mandate. For investors willing to brave the risk that the current market selloff in high growth stocks persists, we think that the AiHuiShou story warrants a closer look.    </p></div>

Aihuishou (RERE US) operates the largest pre-owned consumer electronics transactions and services platform in China under the brand “ATRenew”, which stands for “all things renew.” The platform consists of AHS Recycle (an omnichannel business for the collection of pre-owned consumer electronics), PJT Marketplace (B2B channel) and Paipai Marketplace (B2C channel). AiHuiShou is seeking to raise $500 million to $1 billion through an NYSE listing, according to press reports. AiHuiShou is backed by JD.com Inc (ADR) (JD US) (34.7% of the outstanding shares), Morningside China (14.0%), Shunwei China Internet Fund IV (7.3%) and Tian Tu Capital (8.5%). There are 2,615 million consumer electronic devices in circulation that still have use-value in China in 2020, which 3x times the 869 million devices in circulation in the US, according to CIC. This huge volume of devices in circulation has supported the demand for second-hand or pre-owned devices in China. Currently, the penetration rate of traded pre-owned devices relative to the number of consumer electronic devices in circulation is a low 3.7% in 2020. However, this rate is forecasted to reach 9.4% by 2025, and the market is expected to grow at a 30.8% CAGR from 2020 to 2025 to reach RMB967.3 billion by 2025, according to CIC. AiHuiShou as the largest player as measure by GMV and transacted devices is well-positioned to capture this market opportunity. AiHuiShou is delivering on this market opportunity through strong revenue growth, declining loss margin and improving cash burn. AiHuiShou’s business model will also appeal to investors with an ESG mandate. For investors willing to brave the risk that the current market selloff in high growth stocks persists, we think that the AiHuiShou story warrants a closer look.    

AiHuiShou IPO Initiation: Turning the Vicious Cycle into a Virtuous One

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

<div><p><a href="https://www.smartkarma.com/entities/aihuishou" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener">Aihuishou (RERE US)</a> (AHS), China’s largest pre-owned consumer electronics transactions and services platform, aims to raise up to US$1bn via a US listing. It is backed by <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a>, Morningside and Tiger Global.</p></div><div>
<p>A total of 26.1m consumer products, worth RMB22.8bn, were transacted by AHS over twelve months ending Mar 2021. It had over 755 offline stores across 172 cities. According to CIC, it had a 6.6% market share in terms of GMV for pre-owned electronics and 8.7% market share in terms of number of pre-owned devices transacted in 2020. As per CIC, its GMV for electronics and number of devices transacted in 2020 were both greater than the next five largest platforms combined, as per CIC. </p>
<p>We covered some aspects of the deal in our earlier note, <a href="https://www.smartkarma.com/insights/aihuishou-pre-ipo-mostly-positive-pre-owned-but-well-loved" target="_blank" rel="noopener">AiHuiShou Pre-IPO - Mostly Positive - Pre-Owned but Well Loved</a>. </p>
<p>In this note, we will talk about valuations.</p>
</div>

Aihuishou (RERE US) (AHS), China’s largest pre-owned consumer electronics transactions and services platform, aims to raise up to US$1bn via a US listing. It is backed by JD.com Inc (ADR) (JD US), Morningside and Tiger Global.
A total of 26.1m consumer products, worth RMB22.8bn, were transacted by AHS over twelve months ending Mar 2021. It had over 755 offline stores across 172 cities. According to CIC, it had a 6.6% market share in terms of GMV for pre-owned electronics and 8.7% market share in terms of number of pre-owned devices transacted in 2020. As per CIC, its GMV for electronics and number of devices transacted in 2020 were both greater than the next five largest platforms combined, as per CIC. 
We covered some aspects of the deal in our earlier note, AiHuiShou Pre-IPO - Mostly Positive - Pre-Owned but Well Loved. 
In this note, we will talk about valuations.


AiHuiShou Pre-IPO - First Stab at Valuation

<p><a href="https://www.smartkarma.com/entities/aihuishou" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener">Aihuishou (RERE US)</a> (AHS), China’s largest pre-owned consumer electronics transactions and services platform, aims to raise up to US$1bn via a US listing. It is backed by <a href="https://www.smartkarma.com/entities/jd-com-inc-adr" target="_blank" data-smartkarma-citation="entities:446:1" rel="noopener">JD.com Inc (ADR) (JD US)</a>, Morningside and Tiger Global.</p><p>A total of 26.1m consumer products, worth RMB22.8bn, were transacted by AHS over twelve months ending Mar 2021. It had over 755 offline stores across 172 cities. According to CIC, it had a 6.6% market share in terms of GMV for pre-owned electronics and 8.7% market share in terms of number of pre-owned devices transacted in 2020. As per CIC, its GMV for electronics and number of devices transacted in 2020 were both greater than the next five largest platforms combined, as per CIC. </p>

Aihuishou (RERE US) (AHS), China’s largest pre-owned consumer electronics transactions and services platform, aims to raise up to US$1bn via a US listing. It is backed by JD.com Inc (ADR) (JD US), Morningside and Tiger Global.A total of 26.1m consumer products, worth RMB22.8bn, were transacted by AHS over twelve months ending Mar 2021. It had over 755 offline stores across 172 cities. According to CIC, it had a 6.6% market share in terms of GMV for pre-owned electronics and 8.7% market share in terms of number of pre-owned devices transacted in 2020. As per CIC, its GMV for electronics and number of devices transacted in 2020 were both greater than the next five largest platforms combined, as per CIC. 

AiHuiShou Pre-IPO - Mostly Positive - Pre-Owned but Well Loved

China

ATRenew Inc. owns and operates pre-owned consumer electronics transactions and services platform. The Company develops technology-driven pre-owned consumer electronics transactions and services platform. ATRenew serves customers worldwide.

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ATRenew (RERE US)

AiHuiShou IPO: Valuation First-Look

AiHuiShou is seeking to raise $0.5-1.0 billion through an NYSE listing. In this note, we present our forecasts and take the first look at...

Arun George

Aihuishou (爱回收) Pre-IPO: Pricing My Mobile Handset at Physical Stores

We visited Aihuishou (AHS)’s physical stores and their competitors. We believe AHS store chain has advantage over independent stores and online...

Ming Lu

AiHuiShou IPO Initiation: Turning the Vicious Cycle into a Virtuous One

AiHiuShou is seeking to raise $0.5-1.0 bn through an NYSE listing. AiHuiShou is delivering on its market opportunity through strong revenue growth,...

Arun George

AiHuiShou Pre-IPO - First Stab at Valuation

Aihuishou (RERE US), China’s largest pre-owned consumer electronics transactions and services platform, aims to raise up to US$1bn via a US...

Sumeet Singh

AiHuiShou Pre-IPO - Mostly Positive - Pre-Owned but Well Loved

Aihuishou(RERE US), China’s largest pre-owned consumer electronics transactions and services platform, aims to raise upto US$1bn via a US listing....

Sumeet Singh

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