Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Equity Bottom-Up

<div>
On the 28 February, e-commerce and payment solutions provider <a href="https://www.smartkarma.com/entities/china-youzan-limited" target="_blank" data-smartkarma-citation="entities:11467:1" rel="noopener">China Youzan Limited (8083 HK)</a> <a href="https://www1.hkexnews.hk/listedco/listconews/gem/2021/0228/2021022800069.pdf" target="_blank" rel="noopener">announced</a> a pre-conditional Offer by way of a Scheme to take its GEM-listed shares private, then list 51.7%-held Youzan Technology on Hong Kong's mainboard. Shareholders are offered HK$0.1352/share in cash plus an in-specie distribution of 0.05077265 Youzan Technology shares for every China Youzan share held.
All in, the indicative Offer price was HK$2.3088/share, a 30.2% discount to last close. China Youzan was up 283% in the past year, and 44% YTD prior to the offer. 
In <a href="https://skr.ma/qgiJ9" target="_blank" rel="noopener">China Youzan (8083 HK): Proposal Towards Relisting Youzan Tech</a>, I recommended avoiding the stock, with a view to re-entering if it closed in on the implied fair value using peer multiples, or ~HK$2.20/share. 
On the 6  May, Disinterested Scheme Shareholders <a href="https://www1.hkexnews.hk/listedco/listconews/gem/2021/0506/2021050602278.pdf" target="_blank" rel="noopener">approved</a> at the First SGM a rollover arrangement and other side-agreements - not the take-private proposal as has been incorrectly reported by some media sources. The Scheme Document is expected to be posted on or before the 15 June. 
Shares closed today at $2.09/share, down 5.4%, and down 37% since the delisting proposal. 
This is starting to look more attractive.
</div>


On the 28 February, e-commerce and payment solutions provider China Youzan Limited (8083 HK) announced a pre-conditional Offer by way of a Scheme to take its GEM-listed shares private, then list 51.7%-held Youzan Technology on Hong Kong's mainboard. Shareholders are offered HK$0.1352/share in cash plus an in-specie distribution of 0.05077265 Youzan Technology shares for every China Youzan share held.
All in, the indicative Offer price was HK$2.3088/share, a 30.2% discount to last close. China Youzan was up 283% in the past year, and 44% YTD prior to the offer. 
In China Youzan (8083 HK): Proposal Towards Relisting Youzan Tech, I recommended avoiding the stock, with a view to re-entering if it closed in on the implied fair value using peer multiples, or ~HK$2.20/share. 
On the 6  May, Disinterested Scheme Shareholders approved at the First SGM a rollover arrangement and other side-agreements - not the take-private proposal as has been incorrectly reported by some media sources. The Scheme Document is expected to be posted on or before the 15 June. 
Shares closed today at $2.09/share, down 5.4%, and down 37% since the delisting proposal. 
This is starting to look more attractive.


China Youzan (8083 HK): Reality Check As Shares Rollover

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.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bigtincan-holdings-ltd" target="_blank" data-smartkarma-citation="entities:29067:1" rel="noopener">Bigtincan Holdings Ltd (BTH AU)</a> disclosed a non-binding indicative offer of A$0.80 per share offer from SQN, a skinny 17.6% premium to the undisturbed price.</li>
<li>The offer is unattractive on several fronts and is the latest beaten-down ASX tech stock to be subject to a PE bid. Expect the Board to reject the offer.</li>
<li>Bigtincan also revealed other non-binding expressions of interest. This offer could flush out other potential bidders. At the last close, the gross spread is 6.0%.</li>
</ul>



Bigtincan Holdings Ltd (BTH AU) disclosed a non-binding indicative offer of A$0.80 per share offer from SQN, a skinny 17.6% premium to the undisturbed price.
The offer is unattractive on several fronts and is the latest beaten-down ASX tech stock to be subject to a PE bid. Expect the Board to reject the offer.
Bigtincan also revealed other non-binding expressions of interest. This offer could flush out other potential bidders. At the last close, the gross spread is 6.0%.


Bigtincan (BTH AU)’s Lightweight A$0.80 Offer from SQN

Covering IPOs, Healthcare and Technology Stocks

Andrei Zakharov

Algosun Global

<ul>
<li>Shares of <a href="https://www.smartkarma.com/entities/bigcommerce-holdings-inc" target="_blank" data-smartkarma-citation="entities:29196:1" rel="noopener">BigCommerce Holdings (BIGC US)</a>  slipped below the IPO price of $24.00 per share, and at current valuation, we see limited downside risk for BigCommerce stock investors.  </li>
<li>In 2020, <a href="https://www.smartkarma.com/entities/intuit-inc" target="_blank" data-smartkarma-citation="entities:8235:1" rel="noopener">Intuit Inc (INTU US)</a>  offered to acquire BigCommerce for $1.5 billion, according to CNBC and other public sources. Both BigCommerce and Intuit didn’t provide a comment.</li>
<li>Insider selling activity has slowed down noticeably over the past three months and <a href="https://www.smartkarma.com/entities/bigcommerce-holdings-inc" target="_blank" data-smartkarma-citation="entities:29196:1" rel="noopener">BigCommerce Holdings (BIGC US)</a>  insiders sold ~$5 million worth of shares. </li>
</ul>


Shares of BigCommerce Holdings (BIGC US)  slipped below the IPO price of $24.00 per share, and at current valuation, we see limited downside risk for BigCommerce stock investors.  
In 2020, Intuit Inc (INTU US)  offered to acquire BigCommerce for $1.5 billion, according to CNBC and other public sources. Both BigCommerce and Intuit didn’t provide a comment.
Insider selling activity has slowed down noticeably over the past three months and BigCommerce Holdings (BIGC US)  insiders sold ~$5 million worth of shares. 


BigCommerce: Stock Selloff Looks Finished As Valuation Hit $1.5 Billion

<a href="https://www.smartkarma.com/entities/bigcommerce-holdings-inc" target="_blank" data-smartkarma-citation="entities:29196:1" rel="noopener">BigCommerce Holdings Inc (BIGC US)</a> , provider of e-commerce scalable SaaS platform for B2B and B2C segments, went public on August 5, 2020. Company has raised ~$170 million of net proceeds from an IPO and the IPO price was $24.00 per share. Currently, BigCommerce stock is trading at about $60.00 per share and IPO investors are still up ~150%. BigCommerce has raised ~$228 million in funding over 6 rounds and their last $64 million Series F round was led by Goldman Sachs at a $450 million pre-money valuation keeping in mind IPO valuation was ~$1.8 billion and now market cap of BigCommerce reached ~$4.5 billion on a fully diluted basis. In our insight we will provide outlook for CY’22 and specify reasons why we have negative view on BigCommerce stock.

BigCommerce Holdings Inc (BIGC US) , provider of e-commerce scalable SaaS platform for B2B and B2C segments, went public on August 5, 2020. Company has raised ~$170 million of net proceeds from an IPO and the IPO price was $24.00 per share. Currently, BigCommerce stock is trading at about $60.00 per share and IPO investors are still up ~150%. BigCommerce has raised ~$228 million in funding over 6 rounds and their last $64 million Series F round was led by Goldman Sachs at a $450 million pre-money valuation keeping in mind IPO valuation was ~$1.8 billion and now market cap of BigCommerce reached ~$4.5 billion on a fully diluted basis. In our insight we will provide outlook for CY’22 and specify reasons why we have negative view on BigCommerce stock.   

BigCommerce Insiders Dumped ~$480 Million Worth of Shares During One Year After IPO

<div>
Back on the 28 February this year, SaaS provider <a href="https://www.smartkarma.com/entities/china-youzan-limited" target="_blank" data-smartkarma-citation="entities:11467:1" rel="noopener">China Youzan Limited (8083 HK)</a> <a href="https://www1.hkexnews.hk/listedco/listconews/gem/2021/0228/2021022800069.pdf" target="_blank" rel="noopener">announced</a> a pre-conditional Offer by way of a Scheme to take its GEM-listed shares private, then list 51.7%-held Youzan Technology on Hong Kong's mainboard by "way of introduction". Shareholders were to be offered HK$0.1352/share in cash plus an in-specie distribution of 0.05077265 Youzan Technology shares for every China Youzan share held. The total indicative Offer price was HK$2.3088/share, a 30.2% discount to last close. The scrip portion was based on a fair value of RMB35.73/share for Youzan Tech.
</div>
<div>
In <a href="https://skr.ma/qgiJ9" target="_blank" rel="noopener">China Youzan (8083 HK): Proposal Towards Relisting Youzan Tech</a>, I recommended avoiding the stock -  China Youzan was up 283% in the past year, and 44% YTD prior to the Offer announcement. 
</div>
<div>
Disinterested Scheme Shareholders <a href="https://www1.hkexnews.hk/listedco/listconews/gem/2021/0506/2021050602278.pdf" target="_blank" rel="noopener">approved</a> at the First SGM on the 6 May, a rollover arrangement and other side-agreements - not the take-private proposal as was incorrectly reported by some media sources.
At the time, shares were trading at $2.09/share, down 37% since the delisting proposal. 
And shares continued to fall, with double-digit declines on multiple days including 19.5% on the 11 May on significant volume. 
The Scheme Document was expected to be posted on or before the 15 June, but was <a href="https://www1.hkexnews.hk/listedco/listconews/gem/2021/0715/2021071500984.pdf" target="_blank" rel="noopener">delayed</a> on that day to at least the 19 October. 
Reportedly Youzan Tech's listing application had been rejected, however, the wording in the monthly update on the <a href="https://www1.hkexnews.hk/listedco/listconews/gem/2021/0813/2021081300886.pdf" target="_blank" rel="noopener">13 August</a> said "Youzan Technology has been revising features of its application", a slightly varied statement to "Youzan Technology has continued to progress its application with the Stock Exchange" seen in previous monthly <a href="https://www1.hkexnews.hk/listedco/listconews/gem/2021/0715/2021071500984.pdf" target="_blank" rel="noopener">updates</a>. 
Shares touched a low of HK$0.71/share on the 23 August. 
<h3>The New News</h3>
China Youzan <a href="https://www1.hkexnews.hk/listedco/listconews/gem/2021/0830/2021083000295.pdf" target="_blank" rel="noopener">announced</a> yesterday Youzan Tech has re-filed its application for the listing of shares, which will now be done by way of an offering of new shares, not a listing by introduction. 
Both the scrip ratio and cash portion remain unchanged under China Youzan's delisting transaction, by way of Scheme.
The estimated value per Youzan Tech shares by an independent valuer is now RMB21.76 (~HK$26.20/share), down 39% from the previous indicative price. 
Therefore the proposed consideration for China Youan shareholders is HK$1.4654/share (HK$0.1352 +(HK$0.05077265 x HK$26.20)), a 100.7% premium to last close, but a 55.7% discount to last close ahead of the initial announcement in February this year. 
Shares are up ~16% in the last two trading days, but down 74% since the delisting proposal and 37% adrift of the indicative Offer price in February. Those are pretty grim performance numbers.
There's probably value to be had here at the current level, but there are a multitude of factors at work in arriving at a "fair value." Further delays in the dispatch of the Scheme Doc are feasible. And will the Exchange grant this listing application, when it clearly had issues with the prior submission?
More below the fold.
</div>


Back on the 28 February this year, SaaS provider China Youzan Limited (8083 HK) announced a pre-conditional Offer by way of a Scheme to take its GEM-listed shares private, then list 51.7%-held Youzan Technology on Hong Kong's mainboard by "way of introduction". Shareholders were to be offered HK$0.1352/share in cash plus an in-specie distribution of 0.05077265 Youzan Technology shares for every China Youzan share held. The total indicative Offer price was HK$2.3088/share, a 30.2% discount to last close. The scrip portion was based on a fair value of RMB35.73/share for Youzan Tech.


In China Youzan (8083 HK): Proposal Towards Relisting Youzan Tech, I recommended avoiding the stock -  China Youzan was up 283% in the past year, and 44% YTD prior to the Offer announcement. 


Disinterested Scheme Shareholders approved at the First SGM on the 6 May, a rollover arrangement and other side-agreements - not the take-private proposal as was incorrectly reported by some media sources.
At the time, shares were trading at $2.09/share, down 37% since the delisting proposal. 
And shares continued to fall, with double-digit declines on multiple days including 19.5% on the 11 May on significant volume. 
The Scheme Document was expected to be posted on or before the 15 June, but was delayed on that day to at least the 19 October. 
Reportedly Youzan Tech's listing application had been rejected, however, the wording in the monthly update on the 13 August said "Youzan Technology has been revising features of its application", a slightly varied statement to "Youzan Technology has continued to progress its application with the Stock Exchange" seen in previous monthly updates. 
Shares touched a low of HK$0.71/share on the 23 August. 
The New News
China Youzan announced yesterday Youzan Tech has re-filed its application for the listing of shares, which will now be done by way of an offering of new shares, not a listing by introduction. 
Both the scrip ratio and cash portion remain unchanged under China Youzan's delisting transaction, by way of Scheme.
The estimated value per Youzan Tech shares by an independent valuer is now RMB21.76 (~HK$26.20/share), down 39% from the previous indicative price. 
Therefore the proposed consideration for China Youan shareholders is HK$1.4654/share (HK$0.1352 +(HK$0.05077265 x HK$26.20)), a 100.7% premium to last close, but a 55.7% discount to last close ahead of the initial announcement in February this year. 
Shares are up ~16% in the last two trading days, but down 74% since the delisting proposal and 37% adrift of the indicative Offer price in February. Those are pretty grim performance numbers.
There's probably value to be had here at the current level, but there are a multitude of factors at work in arriving at a "fair value." Further delays in the dispatch of the Scheme Doc are feasible. And will the Exchange grant this listing application, when it clearly had issues with the prior submission?
More below the fold.


United States

BigCommerce Holdings, Inc. operates as a software company. The Company offers SaaS platform for cross-channel commerce and cloud-based e-commerce solution that scales with business growth. BigCommerce Holdings serves customers worldwide.

BigCommerce Holdings (BIGC US)

China Youzan (8083 HK): Reality Check As Shares Rollover

Buying China Youzan means you are buying the Youzan Tech IPO at an Implied EV/sales multiple. That's around a 10% premium to peers currently. The...

David Blennerhassett

Bigtincan (BTH AU)’s Lightweight A$0.80 Offer from SQN

Expect the Board to reject the offer as it is light. The indicative offer could spark other interested parties to show their hand. We would be...

Arun George

BigCommerce: Stock Selloff Looks Finished As Valuation Hit $1.5 Billion

Our analysis suggests risk/reward for BigCommerce shares looks strong, and downside potential may be limited as BigCommerce stock is undervalued...

Andrei Zakharov

BigCommerce Insiders Dumped ~$480 Million Worth of Shares During One Year After IPO

We turn bearish on BigCommerce shares and forecast 30% downside potential as insider selling intensifies and revenue growth will slow down next year

Andrei Zakharov

China Youzan (8083 HK): Once Bitten ...

But I would avoid this stock and extremely volatile. Plus there is a question mark over timing, and whether the listing gets Exchange approval. I...

David Blennerhassett