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 <em>AHS Recycle</em> (an omnichannel business for the collection of pre-owned consumer electronics), <em>PJT Marketplace</em> (B2B channel) and <em>Paipai Marketplace</em> (B2C channel). </p></div><div>
<p>At the mid-point of the proposed IPO price range of $13.00-15.00 per ADS, AiHuiShou will have a market cap of $3.1 billion. At the mid-point of the IPO price range, the net proceeds are $205.7 million. The raise is materially below the rumoured target raise of $500 million to $1 billion, according to press reports.</p>
<p>Existing shareholders have indicated a total of $100 million of the IPO (44.0% of the ADSs at the mid-point of the IPO price range). The indications of interest from <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a> and Tiger Global.</p>
<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.</p>
</div><div><div class="content-highlight">
<p>On a relative valuation basis and at the IPO price range, AiHuiShou is attractively valued on both an EV/Sales and growth adjusted EV/Sales multiples (an EV/Sales/Growth basis). Notably, the last funding round in May 2021 valued AiHuiShou at $19.43 per ordinary share, implying $12.96 per ADS which is broadly in line with the low-end of the IPO price range.</p>
<p>While the lower than expected raise suggest that AiHuiShou received lukewarm investor interest, yesterday's blistering first-day pop of <a href="https://www.smartkarma.com/entities/kanzhun-ltd" target="_blank" data-smartkarma-citation="entities:33368:1" rel="noopener">Kanzhun (BZ US)</a> suggests that the market may be warming up again to high-growth Chinese ADRs. Overall, we are inclined to participate. </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). 
At the mid-point of the proposed IPO price range of $13.00-15.00 per ADS, AiHuiShou will have a market cap of $3.1 billion. At the mid-point of the IPO price range, the net proceeds are $205.7 million. The raise is materially below the rumoured target raise of $500 million to $1 billion, according to press reports.
Existing shareholders have indicated a total of $100 million of the IPO (44.0% of the ADSs at the mid-point of the IPO price range). The indications of interest from JD.com Inc. (9618 HK) and Tiger Global.
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.

On a relative valuation basis and at the IPO price range, AiHuiShou is attractively valued on both an EV/Sales and growth adjusted EV/Sales multiples (an EV/Sales/Growth basis). Notably, the last funding round in May 2021 valued AiHuiShou at $19.43 per ordinary share, implying $12.96 per ADS which is broadly in line with the low-end of the IPO price range.
While the lower than expected raise suggest that AiHuiShou received lukewarm investor interest, yesterday's blistering first-day pop of Kanzhun (BZ US) suggests that the market may be warming up again to high-growth Chinese ADRs. Overall, we are inclined to participate. 


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/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$243m 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>We covered some aspects of the deal in our earlier notes:</p>
<ul>
<li>
<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>. </li>
<li><a href="https://www.smartkarma.com/insights/aihuishou-pre-ipo-first-stab-at-valuation" target="_blank" rel="noopener">AiHuiShou Pre-IPO - First Stab at Valuation</a></li>
<li><a href="https://www.smartkarma.com/insights/aihuishou-pre-ipo-pricing-my-mobile-handset-at-physical-stores" target="_blank" rel="noopener">Aihuishou (爱回收) Pre-IPO: Pricing My Mobile Handset at Physical Stores</a></li>
</ul>
<p>In this note, we will talk about the deal dynamics and run the deal through our ECM Framework.</p>
</div>

Aihuishou (RERE US) (AHS), China’s largest pre-owned consumer electronics transactions and services platform, aims to raise up to US$243m via a US listing. It is backed by JD.com Inc (ADR) (JD US), Morningside and Tiger Global.
We covered some aspects of the deal in our earlier notes:


AiHuiShou Pre-IPO - Mostly Positive - Pre-Owned but Well Loved. 
AiHuiShou Pre-IPO - First Stab at Valuation
Aihuishou (爱回收) Pre-IPO: Pricing My Mobile Handset at Physical Stores

In this note, we will talk about the deal dynamics and run the deal through our ECM Framework.


AiHuiShou IPO - Priced to Go but Won't Do a Kanzhun

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, 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.

<p><a href="https://www.smartkarma.com/entities/aihuishou" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener">Aihuishou (RERE US)</a>  is the largest pre-owned consumer electronics transaction and services platform in China based on the gross merchandise value (GMV) for electronics and the number of devices transacted by merchants and consumers in 2020. The company held a market share of 6.6% and 8.7% of the GMV and number of devices transacted respectively in China in 2020.</p><p><a href="https://www.smartkarma.com/entities/aihuishou" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener">Aihuishou (RERE US)</a>  has filed for an IPO to list its shares in the US and according to news media outlets, the company plans to raise proceeds of about US$1.0bn.</p>

Aihuishou (RERE US)  is the largest pre-owned consumer electronics transaction and services platform in China based on the gross merchandise value (GMV) for electronics and the number of devices transacted by merchants and consumers in 2020. The company held a market share of 6.6% and 8.7% of the GMV and number of devices transacted respectively in China in 2020.Aihuishou (RERE US)  has filed for an IPO to list its shares in the US and according to news media outlets, the company plans to raise proceeds of about US$1.0bn.

AiHuiShou International IPO: Hand-Me-Down

<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

<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

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

ATRenew (RERE US)

AiHuiShou IPO: Valuation Insights

While the lower than expected raise suggest lukewarm investor interest, yesterday's blistering first-day pop of Kanzhun points to improving market...

Arun George

AiHuiShou IPO - Priced to Go but Won't Do a Kanzhun

Aihuishou (RERE US), China’s largest pre-owned consumer electronics transactions and services platform, aims to raise up to US$243m via a US...

Sumeet Singh

AiHuiShou International IPO: Hand-Me-Down

Aihuishou is the largest pre-owned consumer electronics transaction and services platform in China based on GMV for electronics and the no. of...

Shifara Samsudeen, FCMA, CGMA

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

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)