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.

Equity Capital Markets

<p>Anjuke, a real estate information and transaction service provider, is looking to raise around US$1bn in its Hong Kong listing. The company is a division of 58.com which was privatised in 2020 and is now being spun out as its real estate division.</p><p>It provides online marketing services for new and existing properties under Anjuke and 50 Real Estate brands.  It also operates Aifang, a new property transaction services platform that facilitates developers’ new property sales through brokerage brands and agents. Anjuke also provides property brokerage brands and agents with its cloud-native, purpose-built SaaS solutions through Qiaofang,</p><p>Based on iResearch’s report, the company was the market leader by average mobile monthly active users (MAU) in 4Q20 at 67m. As of Dec 20, it had over 726,000 paying agents on its platform. Anjuke was also the leader in online marketing service revenue in 2020 with 66.8% market share.</p><p>Its financial performance has been sort of a mixed bag with Anjuke reporting 21.9% YoY growth in revenue in FY19, 17.6% growth in gross profit, 23% growth in EBITDA and 21% increase in PATMI. However, in FY20, revenue growth slowed down to 6.24% YoY and even though the company managed to grow its gross profit by 7.8%, EBITDA was down 9% YoY, while PATMI was down 15% YoY.</p><p>In addition, there are also related parties and other issues that one needs to be aware of.</p>

Anjuke, a real estate information and transaction service provider, is looking to raise around US$1bn in its Hong Kong listing. The company is a division of 58.com which was privatised in 2020 and is now being spun out as its real estate division.It provides online marketing services for new and existing properties under Anjuke and 50 Real Estate brands.  It also operates Aifang, a new property transaction services platform that facilitates developers’ new property sales through brokerage brands and agents. Anjuke also provides property brokerage brands and agents with its cloud-native, purpose-built SaaS solutions through Qiaofang,Based on iResearch’s report, the company was the market leader by average mobile monthly active users (MAU) in 4Q20 at 67m. As of Dec 20, it had over 726,000 paying agents on its platform. Anjuke was also the leader in online marketing service revenue in 2020 with 66.8% market share.Its financial performance has been sort of a mixed bag with Anjuke reporting 21.9% YoY growth in revenue in FY19, 17.6% growth in gross profit, 23% growth in EBITDA and 21% increase in PATMI. However, in FY20, revenue growth slowed down to 6.24% YoY and even though the company managed to grow its gross profit by 7.8%, EBITDA was down 9% YoY, while PATMI was down 15% YoY.In addition, there are also related parties and other issues that one needs to be aware of.

Anjuke Pre-IPO - Mixed (Positive and Negative) Developments

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.

<p><a href="https://www.smartkarma.com/entities/anjuke" target="_blank" data-smartkarma-citation="entities:33003:1" rel="noopener">Anjuke (ANJ HK)</a> is the largest online marketing platform for new and existing properties by revenue in 2020, according to iResearch. Anjuke is a subsidiary of 58.com. Anjuke’s shareholders include <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a> (14.3% stake), General Atlantic (7.7%), Warburg Pincus (7.9%), <a href="https://www.smartkarma.com/entities/country-garden-holdings-co" target="_blank" data-smartkarma-citation="entities:5225:1" rel="noopener">Country Garden Holdings Co (2007 HK)</a> and <a href="https://www.smartkarma.com/entities/agile-property-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15784:1" rel="noopener">Agile Property Holdings (3383 HK)</a>. It is seeking to raise $1 billion through an HKEx IPO, according to press reports.</p><p>Anjuke is using its core online marketing services business, which is cash generative, to fund its foray into transaction services, a market where <a href="https://www.smartkarma.com/entities/ke-holdings-inc" target="_blank" data-smartkarma-citation="entities:29213:1" rel="noopener">KE Holdings Inc (BEKE US)</a> dominates. However, this growth is margin dilutive as transaction services is structurally a lower margin business. We think that the compromise is acceptable as investors continue to be willing to pay up for high-growth tech companies. </p><div class="content-highlight"><p>The key negative is that Anjuke is saddled with debt related to the privatisation of 58.com in September 2020 - <a href="https://www.smartkarma.com/insights/58-com-s-privatisation-enters-into-definitive-agreement" target="_blank" data-smartkarma-citation="insights:40366" rel="noopener">58.com’s Privatisation Enters into Definitive Agreement</a>. While the healthy cash generation should comfortably service the debt, potential IPO investors could be turned off by the view that the IPO is a way of the privatisation consortium (which arguably privatised 58.com to the detriment of minorities) to make a quick buck. Notwithstanding the optics of the privatisation and relisting trade which tend to enrich insiders at the expense of minorities, we believe that the Anjuke IPO is worth a close look.</p></div>

Anjuke (ANJ HK) is the largest online marketing platform for new and existing properties by revenue in 2020, according to iResearch. Anjuke is a subsidiary of 58.com. Anjuke’s shareholders include Tencent Holdings (700 HK) (14.3% stake), General Atlantic (7.7%), Warburg Pincus (7.9%), Country Garden Holdings Co (2007 HK) and Agile Property Holdings (3383 HK). It is seeking to raise $1 billion through an HKEx IPO, according to press reports.Anjuke is using its core online marketing services business, which is cash generative, to fund its foray into transaction services, a market where KE Holdings Inc (BEKE US) dominates. However, this growth is margin dilutive as transaction services is structurally a lower margin business. We think that the compromise is acceptable as investors continue to be willing to pay up for high-growth tech companies. The key negative is that Anjuke is saddled with debt related to the privatisation of 58.com in September 2020 - 58.com’s Privatisation Enters into Definitive Agreement. While the healthy cash generation should comfortably service the debt, potential IPO investors could be turned off by the view that the IPO is a way of the privatisation consortium (which arguably privatised 58.com to the detriment of minorities) to make a quick buck. Notwithstanding the optics of the privatisation and relisting trade which tend to enrich insiders at the expense of minorities, we believe that the Anjuke IPO is worth a close look.

<div><p><a href="https://www.smartkarma.com/entities/ke-holdings-inc" target="_blank" data-smartkarma-citation="entities:29213:1" rel="noopener">KE Holdings Inc (BEKE US)</a> (BEKE), a company backed by <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> and Hillhouse, raised around US$2.1bn in its US listing.</p></div><div><p>BEKE combines Lianjia, China's leading real estate brokerage brand with more than 18 years of history, and Beike, China's leading integrated online and offline platform for housing transactions and services with two years of history.</p></div><div>
<p>In my previous insight, I have looked at various aspects of the deal:</p>
<ul>
<li>
<a href="https://www.smartkarma.com/insights/ke-holdings-beike-pre-ipo-the-positives-fast-growth-high-market-share" target="_blank" rel="noopener">KE Holdings/​Beike Pre-IPO - The Positives - Fast Growth, High Market Share</a>, </li>
<li><a href="https://www.smartkarma.com/insights/ke-holdings-beike-pre-ipo-the-negatives-questions-margins-p2p" target="_blank" rel="noopener">KE Holdings/​​Beike Pre-IPO - The Negatives - Questions, Margins, P2P</a></li>
<li><a href="https://www.smartkarma.com/insights/ke-holdings-beike-pre-ipo-recent-updates-peer-comparison" target="_blank" rel="noopener">KE Holdings/​​Beike Pre-IPO - Recent Updates, Peer Comparison</a></li>
<li><a href="https://www.smartkarma.com/insights/ke-holdings-beike-pre-ipo-thoughts-on-valuation-rumoured-valuation-might-be-a-stretch" target="_blank" rel="noopener">KE Holdings/​​​Beike Pre-IPO - Thoughts on Valuation, Rumoured Valuation Might Be a Stretch</a></li>
<li><a href="https://www.smartkarma.com/insights/ke-holdings-beike-ipo-can-t-see-much-upside" target="_blank" rel="noopener">KE Holdings/​​​​Beike IPO - Can’t See Much Upside</a></li>
</ul>
</div><div></div><p>In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.</p>

KE Holdings Inc (BEKE US) (BEKE), a company backed by Tencent Holdings (700 HK), Softbank Group (9984 JP) and Hillhouse, raised around US$2.1bn in its US listing.BEKE combines Lianjia, China's leading real estate brokerage brand with more than 18 years of history, and Beike, China's leading integrated online and offline platform for housing transactions and services with two years of history.
In my previous insight, I have looked at various aspects of the deal:


KE Holdings/​Beike Pre-IPO - The Positives - Fast Growth, High Market Share, 
KE Holdings/​​Beike Pre-IPO - The Negatives - Questions, Margins, P2P
KE Holdings/​​Beike Pre-IPO - Recent Updates, Peer Comparison
KE Holdings/​​​Beike Pre-IPO - Thoughts on Valuation, Rumoured Valuation Might Be a Stretch
KE Holdings/​​​​Beike IPO - Can’t See Much Upside

In this note, we will look at the deal dynamics and provide a table with implied valuation at different share price levels.

KE Holdings/​​​​Beike IPO Trading - We Would Be Sellers if It Pops

<div><p><a href="https://www.smartkarma.com/entities/ke-holdings-inc" target="_blank" data-smartkarma-citation="entities:29213:1" rel="noopener">KE Holdings Inc (BEKE US)</a> is a combination of <em>Lianjia</em>, China's leading real estate brokerage brand, and <em>Beike</em>, China's leading integrated online and offline platform for housing transactions. KE has launched its IPO at a price range of $17-19 per ADS. At the mid-point of the IPO price range, KE will raise net proceeds of $1,841 million.</p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/ke-holdings-beike-ipo-initiation-home-truths" target="_blank" rel="noopener">our initiation note</a>, we stated that our analysis suggests that if you consider the 1Q20 performance as a one-off (supported by the strong recovery in 2Q20), KE's financial performance is heading in the right direction with strong revenue growth and rising margins. In our <a href="https://www.smartkarma.com/insights/ke-holdings-beike-ipo-updated-filings-point-to-a-v-shaped-recovery" target="_blank" rel="noopener">follow-on note</a> which examined the 1H20 results, we stated that the 1H20 results showed a strong recovery across all financial metrics. We concluded that KE has attractive fundamentals. Overall, we think that a reasonable valuation and solid indication of interest from investors makes KE tempting at the proposed pricing range. </p></div></div></div>

KE Holdings Inc (BEKE US) is a combination of Lianjia, China's leading real estate brokerage brand, and Beike, China's leading integrated online and offline platform for housing transactions. KE has launched its IPO at a price range of $17-19 per ADS. At the mid-point of the IPO price range, KE will raise net proceeds of $1,841 million.In our initiation note, we stated that our analysis suggests that if you consider the 1Q20 performance as a one-off (supported by the strong recovery in 2Q20), KE's financial performance is heading in the right direction with strong revenue growth and rising margins. In our follow-on note which examined the 1H20 results, we stated that the 1H20 results showed a strong recovery across all financial metrics. We concluded that KE has attractive fundamentals. Overall, we think that a reasonable valuation and solid indication of interest from investors makes KE tempting at the proposed pricing range. 

KE Holdings (Beike) IPO: Valuation Insights

<div><p><a href="https://www.smartkarma.com/entities/ke-holdings-inc" target="_blank" data-smartkarma-citation="entities:29213:1" rel="noopener">KE Holdings Inc (BEKE US)</a> (BEKE), a company backed by <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/softbank-group-corp" target="_blank" data-smartkarma-citation="entities:315:1" rel="noopener">Softbank Group (9984 JP)</a> and Hillhouse, aims to raise around US$2bn in its US listing.</p></div><div><p>BEKE combines Lianjia, China's leading real estate brokerage brand with more than 18 years of history, and Beike, China's leading integrated online and offline platform for housing transactions and services with two years of history.</p></div><div><p>In my previous insight, <a href="https://www.smartkarma.com/insights/ke-holdings-beike-pre-ipo-the-positives-fast-growth-high-market-share" target="_blank" rel="noopener">KE Holdings/​Beike Pre-IPO - The Positives - Fast Growth, High Market Share</a>, and <a href="https://www.smartkarma.com/insights/ke-holdings-beike-pre-ipo-the-negatives-questions-margins-p2p" target="_blank" rel="noopener">KE Holdings/​​Beike Pre-IPO - The Negatives - Questions, Margins, P2P</a> I spoke about the positive and negative aspects of the deal. In <a href="https://www.smartkarma.com/insights/ke-holdings-beike-pre-ipo-recent-updates-peer-comparison" target="_blank" rel="noopener">KE Holdings/​​Beike Pre-IPO - Recent Updates, Peer Comparison</a> I spoke about the recent updates.</p></div><div><p>In this insight, I'll talk about valuation.</p></div>

KE Holdings Inc (BEKE US) (BEKE), a company backed by Tencent Holdings (700 HK), Softbank Group (9984 JP) and Hillhouse, aims to raise around US$2bn in its US listing.BEKE combines Lianjia, China's leading real estate brokerage brand with more than 18 years of history, and Beike, China's leading integrated online and offline platform for housing transactions and services with two years of history.In my previous insight, KE Holdings/​Beike Pre-IPO - The Positives - Fast Growth, High Market Share, and KE Holdings/​​Beike Pre-IPO - The Negatives - Questions, Margins, P2P I spoke about the positive and negative aspects of the deal. In KE Holdings/​​Beike Pre-IPO - Recent Updates, Peer Comparison I spoke about the recent updates.In this insight, I'll talk about valuation.

KE Holdings/​​Beike Pre-IPO - Thoughts on Valuation, Rumoured Valuation Might Be a Stretch

China

Fangdd Network Group Ltd. provides real estate services. The Company offers buying, selling, and renting houses. Fangdd Network Group serves customers in China.

Fangdd Network Group (DUO US)

Anjuke Pre-IPO - Mixed (Positive and Negative) Developments

Anjuke, a real estate information and transaction service provider, is looking to raise around US$1bn in its Hong Kong listing. The company is a...

Sumeet Singh

Anjuke IPO Initiation: Home Truths

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KE Holdings (Beike) IPO: Valuation Insights

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KE Holdings/Beike Pre-IPO - Thoughts on Valuation, Rumoured Valuation Might Be a Stretch

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Anjuke, a real estate information and transaction service provider, is looking to raise around US$1bn in its Hong Kong listing. The company is a...

Sumeet Singh

Anjuke IPO Initiation: Home Truths

Anjuke is seeking to raise $1 bn through an HKEx IPO. Notwithstanding the optics of the privatisation and relisting trade, we believe that the...

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KE Holdings/​​​​Beike IPO Trading - We Would Be Sellers if It Pops

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KE Holdings (Beike) IPO: Valuation Insights

KE Holdings Inc (BEKE US) is a combination of Lianjia, China's leading real estate brokerage brand, and Beike, China's leading integrated online...

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KE Holdings/​​Beike Pre-IPO - Thoughts on Valuation, Rumoured Valuation Might Be a Stretch

KE Holdings Inc (BEKE US) (BEKE), a company backed by Tencent Holdings (700 HK), Softbank Group (9984 JP) and Hillhouse, aims to raise around...

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KE Holdings/Beike Pre-IPO - Thoughts on Valuation, Rumoured Valuation Might Be a Stretch