Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Capital Markets

<ul>
<li>A week ahead of trial, a defendant in massive fraud case copped a plea</li>
<li>Terms of deal include guilty plea, asset forfeiture, restitution of US$158 mn</li>
<li>US investigation continues; are other Chinese companies involved in case?</li>
</ul>


A week ahead of trial, a defendant in massive fraud case copped a plea
Terms of deal include guilty plea, asset forfeiture, restitution of US$158 mn
US investigation continues; are other Chinese companies involved in case?


Postage Fraud Case Update: Guilty Plea, Asset Forfeiture, & Restitution Set at a Whopping US$158 Mn!

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Thematic (Sector/Industry)

E-commerce platforms worldwide, including Chinese-owned fast-fashion rivals Shein and Temu, are embracing a novel business model that offers merchants the advantages of selling their goods overseas at a lower cost and higher convenience.
And mainland-based companies stand to benefit as the platforms come in search of reliable suppliers in China’s manufacturing hubs.
The model, known in China as the “full-service consignment model,” (全托管模式) sees online platforms take care of nearly all aspects of the selling process from setting the price of products and storing them to marketing, processing orders, and delivery.

E-commerce platforms worldwide, including Chinese-owned fast-fashion rivals Shein and Temu, are embracing a novel business model that offers merchants the advantages of selling their goods overseas at a lower cost and higher convenience.
And mainland-based companies stand to benefit as the platforms come in search of reliable suppliers in China’s manufacturing hubs.
The model, known in China as the “full-service consignment model,” (全托管模式) sees online platforms take care of nearly all aspects of the selling process from setting the price of products and storing them to marketing, processing orders, and delivery.

E-Commerce Giants Rush to Roll Out ‘Full-Service’ Business Model

Greater China Equity Long/Short Analyst

Eric Chen

Equity Bottom-Up

<ul>
<li>We believe it was a wise move for PDD to launch the overseas online marketplace TEMU first off the U.S., because of its massive, lucrative and integrated retail markets.</li>
<li>Still, the adventure lacks some of the recipe for successes PDD made during its early days, and the failure of Wish suggests pricing not come at the expense of quality.</li>
<li>We expect TEMU to lose US$2bn in 2024 (1/3 of PDD’s FY22 earnings) and won’t generate meaningful profit probably until 2026, reinforcing our view on PDD’s near-term earnings risk.</li>
</ul>


We believe it was a wise move for PDD to launch the overseas online marketplace TEMU first off the U.S., because of its massive, lucrative and integrated retail markets.
Still, the adventure lacks some of the recipe for successes PDD made during its early days, and the failure of Wish suggests pricing not come at the expense of quality.
We expect TEMU to lose US$2bn in 2024 (1/3 of PDD’s FY22 earnings) and won’t generate meaningful profit probably until 2026, reinforcing our view on PDD’s near-term earnings risk.


Pinduoduo (PDD US): More Thoughts on TEMU

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.

GoTo Gojek Tokopedia Tbk PT / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/gojek-goto" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">GoTo (1379371D IJ)</a> is the leading digital ecosystem in Southeast Asia. It seeking to raise up to $1.3 billion. Bookbuilding ends on 21 March.</li>
<li>In <a href="https://www.smartkarma.com/insights/goto-gojek-tokopedia-ipo-initiation-island-shopping" target="_blank" data-smartkarma-citation="insights:67047" rel="noopener">GoTo Gojek Tokopedia IPO Initiation: Island Shopping</a>, we noted that the fundamentals are mixed as the high growth is accompanied by ongoing losses and cash burn. </li>
<li>Our valuation analysis suggests that the price range is aggressive and unattractive. We would give the IPO a pass. </li>
</ul>



GoTo (1379371D IJ) is the leading digital ecosystem in Southeast Asia. It seeking to raise up to $1.3 billion. Bookbuilding ends on 21 March.
In GoTo Gojek Tokopedia IPO Initiation: Island Shopping, we noted that the fundamentals are mixed as the high growth is accompanied by ongoing losses and cash burn. 
Our valuation analysis suggests that the price range is aggressive and unattractive. We would give the IPO a pass. 


GoTo Gojek Tokopedia IPO: Valuation Insights

Bukalapak.com PT Tbk / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/bukalapak" target="_blank" data-smartkarma-citation="entities:33575:1" rel="noopener">Bukalapak (BUKA IJ)</a>, which means 'opening a kiosk' in Indonesian, is a leading e-commerce player in non-Tier 1 cities in Indonesia, with a market share of 35% in 2020 based on GMV (gross merchandise value), according to Frost &amp; Sullivan. Bukalapak carries out its main business activities through the mobile platform Bukalapak and Bukalapak Partners. Bukalapak has increased its IPO size by about a third to $1.5 billion due to strong demand, according to press reports. Bookbuilding will close on 19 July and the shares are set to list on 6 August. The COVID-19 pandemic has accelerated the rate of e-commerce adoption in Indonesia as more consumers are reluctant to travel and started changing their shopping habits to online shopping, due to personal preferences or lockdown restrictions. The share of e-commerce of total retail spending in Indonesia has grown from 5.6% in 2017 to around 22% in 2020 and will reach 35.9% in 2025, according to Frost &amp; Sullivan. <div class="content-highlight">Like its peers, Bukalapak is benefiting from this market tailwind. Bukalapak’s strategy of focusing on consumers in the non-Tier 1 area and the mass market in the Tier 1 area results in a relatively small overlap (less than 20%) between its customers and customers of other online marketplaces such as <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a>'s Shopee, <a href="https://www.smartkarma.com/entities/tokopedia-pt" target="_blank" data-smartkarma-citation="entities:24239:1" rel="noopener">Tokopedia PT (1087142D IJ)</a> and <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>'s Lazada. Competitors generally target the affluent segment of the market. Overall, Bukalapak's fundamentals tick all the right boxes of rising monetisation, lower losses and declining cash burn, in our view. We will discuss valuation in our next note. </div>

Bukalapak (BUKA IJ), which means 'opening a kiosk' in Indonesian, is a leading e-commerce player in non-Tier 1 cities in Indonesia, with a market share of 35% in 2020 based on GMV (gross merchandise value), according to Frost &amp; Sullivan. Bukalapak carries out its main business activities through the mobile platform Bukalapak and Bukalapak Partners. Bukalapak has increased its IPO size by about a third to $1.5 billion due to strong demand, according to press reports. Bookbuilding will close on 19 July and the shares are set to list on 6 August. The COVID-19 pandemic has accelerated the rate of e-commerce adoption in Indonesia as more consumers are reluctant to travel and started changing their shopping habits to online shopping, due to personal preferences or lockdown restrictions. The share of e-commerce of total retail spending in Indonesia has grown from 5.6% in 2017 to around 22% in 2020 and will reach 35.9% in 2025, according to Frost &amp; Sullivan. Like its peers, Bukalapak is benefiting from this market tailwind. Bukalapak’s strategy of focusing on consumers in the non-Tier 1 area and the mass market in the Tier 1 area results in a relatively small overlap (less than 20%) between its customers and customers of other online marketplaces such as Sea Ltd (SE US)'s Shopee, Tokopedia PT (1087142D IJ) and Alibaba Group (BABA US)'s Lazada. Competitors generally target the affluent segment of the market. Overall, Bukalapak's fundamentals tick all the right boxes of rising monetisation, lower losses and declining cash burn, in our view. We will discuss valuation in our next note. 

Bukalapak IPO Initiation: Island Shopping

United States

ContextLogic Inc., doing business as Wish, operates as an online marketplace. The Company provides apparel, bags, toys, mobile phones and covers, hand and power tools, cosmetics, drinking games, home decor, bathroom fixtures, building supplies, and other accessories. Wish serves customers worldwide.

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ContextLogic (LOGC US)

Postage Fraud Case Update: Guilty Plea, Asset Forfeiture, & Restitution Set at a Whopping US$158 Mn!

A defendant in a China-US postage fraud case pled guilty, accepted US$150+ mn in asset forfeitures & restitution, and will help authorities expand...

Tracking Traffic

E-Commerce Giants Rush to Roll Out ‘Full-Service’ Business Model

E-commerce platforms worldwide, including Chinese-owned fast-fashion rivals Shein and Temu, are embracing a novel business model that offers...

Caixin Global

Pinduoduo (PDD US): More Thoughts on TEMU

We believe PDD rightly choose the U.S. (versus SE Asia) to launch TEMU, but success is far from guaranteed due to difficulties in copying PDD...

Eric Chen

GoTo Gojek Tokopedia IPO: Valuation Insights

Our valuation analysis suggests that the price range is aggressive and unattractive. We would give the IPO a pass. Books will close on 21 March....

Arun George

Bukalapak IPO Initiation: Island Shopping

Bukalapak has increased its IPO size by about a third to $1.5 billion due to strong demand. Its fundamentals tick all the right boxes of rising...

Arun George

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