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

<p><a href="https://www.smartkarma.com/entities/trip-com-group-ltd" target="_blank" data-smartkarma-citation="entities:180:1" rel="noopener">Trip.com (TCOM US)</a> is a leading one-stop travel platform that currently operates through four leading travel brands which are Ctrip, Qunar, Trip.com and Skyscanner. Trip.com passed its Hong Kong listing committee hearing and could raise up to $1-2 billion through a secondary listing, according to press reports. </p><p>Trip.com is braving choppy markets and waning investor enthusiasm on secondary listings/IPOs. The recent Hong Kong secondary listings of <a href="https://www.smartkarma.com/entities/autohome-inc-adr" target="_blank" data-smartkarma-citation="entities:20234:1" rel="noopener">Autohome Inc (Adr) (ATHM US)</a> and <a href="https://www.smartkarma.com/entities/bilibili-inc" target="_blank" data-smartkarma-citation="entities:26793:1" rel="noopener">Bilibili Inc (BILI US)</a> are trading 3% and 8% above their H-share listing price, respectively. <a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a> is trading -13% below its H-share listing price largely due to the fallout from the fire sale at Archegos Capital.   </p><div class="content-highlight"><p>Trip.com is a play on the expected reopening and recovery of travel in 2021 due to the global rollout of vaccines. In the post-pandemic world, Trip.com aims to cement its market share gains through strengthening its supply chain (such as short-distance travel), higher conversion via content investment (such as live streaming) and rising penetration in lower-tier cities (&gt;40% of new mobile app users in 2020 were from lower-tier cities). We think that Trip.com is an attractive play on travel recovery at the last close price. </p></div>

Trip.com (TCOM US) is a leading one-stop travel platform that currently operates through four leading travel brands which are Ctrip, Qunar, Trip.com and Skyscanner. Trip.com passed its Hong Kong listing committee hearing and could raise up to $1-2 billion through a secondary listing, according to press reports. Trip.com is braving choppy markets and waning investor enthusiasm on secondary listings/IPOs. The recent Hong Kong secondary listings of Autohome Inc (Adr) (ATHM US) and Bilibili Inc (BILI US) are trading 3% and 8% above their H-share listing price, respectively. Baidu (BIDU US) is trading -13% below its H-share listing price largely due to the fallout from the fire sale at Archegos Capital.   Trip.com is a play on the expected reopening and recovery of travel in 2021 due to the global rollout of vaccines. In the post-pandemic world, Trip.com aims to cement its market share gains through strengthening its supply chain (such as short-distance travel), higher conversion via content investment (such as live streaming) and rising penetration in lower-tier cities (&gt;40% of new mobile app users in 2020 were from lower-tier cities). We think that Trip.com is an attractive play on travel recovery at the last close price. 

Trip.com Secondary Listing: No Heads in the Clouds

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

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.

<ul>
<li>As <a href="https://www.smartkarma.com/entities/airbnb-inc" target="_blank" data-smartkarma-citation="entities:431:1" rel="noopener">Airbnb Inc (9865065Z US)</a> upped the IPO price range from $44-50 per share to $56-60 per share, we update our valuation and examine the company’s long-term prospects below.</li>
<li>Even though Airbnb is not exceedingly cheap at the new IPO price range, we believe there is still significant (9-27%) upside to Airbnb shares, even at the higher end of the IPO price range. Therefore, we continue to favour Airbnb and recommend subscribing to the IPO.</li>
</ul>


As Airbnb Inc (9865065Z US) upped the IPO price range from $44-50 per share to $56-60 per share, we update our valuation and examine the company’s long-term prospects below.
Even though Airbnb is not exceedingly cheap at the new IPO price range, we believe there is still significant (9-27%) upside to Airbnb shares, even at the higher end of the IPO price range. Therefore, we continue to favour Airbnb and recommend subscribing to the IPO.


Airbnb Upped the Price By 20-27%: Still Plenty of Value Left

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.

<p>Airbnb aims to raise up to US$3.1bn in its US listing. Airbnb is a global short-stay offering platform. To put it simply, it connects hosts, who post available accommodation on Airbnb, with guests, who make bookings for the accommodation. It charges a fee for this service.</p><p>As of 9M20, it had 4 million hosts in more than 220 countries and regions around the world. Since inception, its hosts have welcomed over 825m guest arrivals and have cumulatively earned over $110bn. In 2019, it had 54m active bookers worldwide, who booked 327m nights and experiences on Airbnb.</p><p>Over 2017-19, the company reported steady growth in earnings led by an increase in the number of bookings. Its overall number of guests and hosts have been growing as well, with most metrics heading in the right direction. </p><p>I’ve covered various aspects of the deal in my previous note, <a href="https://www.smartkarma.com/insights/airbnb-ipo-time-for-a-good-break-even-from-the-share-lock-up" target="_blank" rel="noopener">Airbnb IPO - Time for a good break - even from the  share lock-up</a>. </p><p>In this note, I’ll take a look at its peers recent performance and talk about valuations.</p>

Airbnb aims to raise up to US$3.1bn in its US listing. Airbnb is a global short-stay offering platform. To put it simply, it connects hosts, who post available accommodation on Airbnb, with guests, who make bookings for the accommodation. It charges a fee for this service.As of 9M20, it had 4 million hosts in more than 220 countries and regions around the world. Since inception, its hosts have welcomed over 825m guest arrivals and have cumulatively earned over $110bn. In 2019, it had 54m active bookers worldwide, who booked 327m nights and experiences on Airbnb.Over 2017-19, the company reported steady growth in earnings led by an increase in the number of bookings. Its overall number of guests and hosts have been growing as well, with most metrics heading in the right direction. I’ve covered various aspects of the deal in my previous note, Airbnb IPO - Time for a good break - even from the  share lock-up. In this note, I’ll take a look at its peers recent performance and talk about valuations.

Airbnb IPO - Peer Comparison and Valuation - Smaller but Nimbler, Possible COVID Winner

<p>Airbnb aims to raise around US$2.5bn in its US listing. Airbnb is a global short-stay offering platform. To put it simply, iIt connects hosts, who post available accommodation on Airbnb, with guests, who make bookings for the accommodation. It charges a fee for this service.</p><p>As of 9M20, it had 4 million hosts in more than 220 countries and regions around the world. Since inception, its hosts have welcomed over 825m guest arrivals and have cumulatively earned over $110bn. In 2019, it had 54m active bookers worldwide, who booked 327m nights and experiences on Airbnb.</p><p>Over 2017-19, the company reported steady growth in earnings led by an increase in the number of bookings. Its overall number of guests and hosts have been growing as well, with most metrics heading in the right direction. </p><p>While COVID-19 did take a harsh toll on the company, its quarterly results paint a better picture as compared to its 9M20 numbers. Even during COVID, there have been certain pockets, like domestic and long stay travel which have continued to grow, thus, highlighting the company’s resilience. </p><p>Having said that, Airbnb has failed to explain the reason for the downwards pressure on its 2019 margins. At the same time, the cohorts data highlights the ample other options available to its guests and the severe competition in the industry. </p>

Airbnb aims to raise around US$2.5bn in its US listing. Airbnb is a global short-stay offering platform. To put it simply, iIt connects hosts, who post available accommodation on Airbnb, with guests, who make bookings for the accommodation. It charges a fee for this service.As of 9M20, it had 4 million hosts in more than 220 countries and regions around the world. Since inception, its hosts have welcomed over 825m guest arrivals and have cumulatively earned over $110bn. In 2019, it had 54m active bookers worldwide, who booked 327m nights and experiences on Airbnb.Over 2017-19, the company reported steady growth in earnings led by an increase in the number of bookings. Its overall number of guests and hosts have been growing as well, with most metrics heading in the right direction. While COVID-19 did take a harsh toll on the company, its quarterly results paint a better picture as compared to its 9M20 numbers. Even during COVID, there have been certain pockets, like domestic and long stay travel which have continued to grow, thus, highlighting the company’s resilience. Having said that, Airbnb has failed to explain the reason for the downwards pressure on its 2019 margins. At the same time, the cohorts data highlights the ample other options available to its guests and the severe competition in the industry. 

Airbnb IPO - Time for a Good Break - Even from the Share Lock-Up

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<div style="text-align: start;">
<strong>Our base case valuation of Airbnb suggests an EV of $39.7 billion, an implied market cap of $45.0 billion, and an implied price per share of $64.3 per share, which would represent a 29% upside from the high end of the IPO price range of $44 to $50 per share.</strong> Given the attractive upside, we have a positive view of the Airbnb IPO. Our base case valuation assumes an estimated sales of $4.8 billion in 2021 (up 37.3% YoY). Our sales estimate of $4.8 billion in 2021 is similar to the company's sales in 2019. </div><div style="text-align: start;"></div><div style="text-align: start;">Our base case valuation also assumes an EV/Sales multiple of 8.3x in 2021, which is the same valuation multiple used for Booking Holdings, one of the comps. The $35 billion in market cap figure (top end of the IPO price range of $50 per share) would imply an EV/S multiple of 6.3x in 2021, if we use an estimated sales of $4.8 billion in 2021. The 6.3x EV/S multiple would be 24% below the valuation multiple of Booking Holdings but 22% higher than the average EV/S multiple of Airbnb's comps.</div>


Our base case valuation of Airbnb suggests an EV of $39.7 billion, an implied market cap of $45.0 billion, and an implied price per share of $64.3 per share, which would represent a 29% upside from the high end of the IPO price range of $44 to $50 per share. Given the attractive upside, we have a positive view of the Airbnb IPO. Our base case valuation assumes an estimated sales of $4.8 billion in 2021 (up 37.3% YoY). Our sales estimate of $4.8 billion in 2021 is similar to the company's sales in 2019. Our base case valuation also assumes an EV/Sales multiple of 8.3x in 2021, which is the same valuation multiple used for Booking Holdings, one of the comps. The $35 billion in market cap figure (top end of the IPO price range of $50 per share) would imply an EV/S multiple of 6.3x in 2021, if we use an estimated sales of $4.8 billion in 2021. The 6.3x EV/S multiple would be 24% below the valuation multiple of Booking Holdings but 22% higher than the average EV/S multiple of Airbnb's comps.

United States

Booking Holdings Inc. operates as an online travel company. The Company offers a platform that allows to make travel reservations with providers of travel services, as well as provides accommodation reservations, rentals cars, airline tickets, and vacation packages. Booking Holdings serves customers worldwide.

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Booking Holdings (BKNG US)

Trip.com Secondary Listing: No Heads in the Clouds

Trip.com passed its HKEx listing hearing to raise up to $1-2bn through a secondary listing. We think that Trip.com is an attractive play on travel...

Arun George

Airbnb Upped the Price By 20-27%: Still Plenty of Value Left

As Airbnb upped the IPO price range from $44-50 per share to $56-60 per share, we update our valuation below. Even though Airbnb is not exceedingly...

Oshadhi Kumarasiri

Airbnb IPO - Peer Comparison and Valuation - Smaller but Nimbler, Possible COVID Winner

Airbnb aims to raise up to US$3.1bn in its US listing. Even at the revised price range, the stock is still at a discount to booking.com.

Sumeet Singh

Airbnb IPO Valuation Analysis

Our base case valuation of Airbnb suggests an implied market cap of $45.0 billion ($64.3 per share), which would represent a 29% upside from the...

Douglas Kim

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Trip.com Secondary Listing: No Heads in the Clouds

Trip.com passed its HKEx listing hearing to raise up to $1-2bn through a secondary listing. We think that Trip.com is an attractive play on travel...

Arun George

Airbnb Upped the Price By 20-27%: Still Plenty of Value Left

As Airbnb upped the IPO price range from $44-50 per share to $56-60 per share, we update our valuation below. Even though Airbnb is not exceedingly...

Oshadhi Kumarasiri

Airbnb IPO - Peer Comparison and Valuation - Smaller but Nimbler, Possible COVID Winner

Airbnb aims to raise up to US$3.1bn in its US listing. Even at the revised price range, the stock is still at a discount to booking.com.

Sumeet Singh

Airbnb IPO - Time for a Good Break - Even from the Share Lock-Up

Airbnb aims to raise around US$2.5bn in its US listing. There is lots to like about the company, apart from it lack of lock-up on some shareholders.

Sumeet Singh

Airbnb IPO Valuation Analysis

Our base case valuation of Airbnb suggests an implied market cap of $45.0 billion ($64.3 per share), which would represent a 29% upside from the...

Douglas Kim