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.

Equity Capital Markets

Full Truck Alliance   / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/full-truck-alliance" target="_blank" data-smartkarma-citation="entities:33429:1" rel="noopener">Full Truck Alliance (YMM US)</a>  has announced the indicative price range for its US IPO and the company is planning to sell 82.5 ADSs (7.6% of the ordinary shares outstanding) at an indicative price range of US$17-19 per ADS. In addition, Ontario Teachers’ Pension Plan Board and an entity affiliated with Mubadala Investment have agreed to purchase US$100m each of the company’s ordinary shares at a concurrent private placement.</p><p>At the midpoint of the IPO price of US$18 per ADS, the company will raise net proceeds of US$1,620.7m (each ADS represents 20 ordinary shares of the company) from the IPO and the concurrent private placement at a market capitalisation of US$19.6bn and a post-money enterprise value of US$15.1bn.</p><p>One of Full Truck Alliance's (FTA) existing shareholders, Fidelity International (US$100m) and Invesco Ltd. (US$500m) have agreed to purchase up to US$600m of the ADSs offered at this IPO (about 40% of the gross proceeds at the midpoint of the IPO price). FTA plans to use 40% of net proceeds from the IPO and concurrent private placement on infrastructure development and technology innovation, another 40% on expanding its offerings and the remaining net proceeds on general corporate purposes.</p>

Full Truck Alliance (YMM US)  has announced the indicative price range for its US IPO and the company is planning to sell 82.5 ADSs (7.6% of the ordinary shares outstanding) at an indicative price range of US$17-19 per ADS. In addition, Ontario Teachers’ Pension Plan Board and an entity affiliated with Mubadala Investment have agreed to purchase US$100m each of the company’s ordinary shares at a concurrent private placement.At the midpoint of the IPO price of US$18 per ADS, the company will raise net proceeds of US$1,620.7m (each ADS represents 20 ordinary shares of the company) from the IPO and the concurrent private placement at a market capitalisation of US$19.6bn and a post-money enterprise value of US$15.1bn.One of Full Truck Alliance's (FTA) existing shareholders, Fidelity International (US$100m) and Invesco Ltd. (US$500m) have agreed to purchase up to US$600m of the ADSs offered at this IPO (about 40% of the gross proceeds at the midpoint of the IPO price). FTA plans to use 40% of net proceeds from the IPO and concurrent private placement on infrastructure development and technology innovation, another 40% on expanding its offerings and the remaining net proceeds on general corporate purposes.

Full Truck Alliance IPO: Peer Comparison and Valuation

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Granite Bay Capital

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Granite Bay Capital is an innovation focussed investment company with a deep focus on the companies at the leading edge of innovation across major themes such as AI, ubiquitous computing, sustainability, automation and longevity.

Thematic (Sector/Industry)

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Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

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<p><strong>Our base case valuation of Full Truck Alliance is implied market cap of $17.7 billion or $17.1 per share. Our valuation sensitivity suggests a range from $14.3 billion to $21.4 billion. Our base case valuation of $17.1 per share is close to the low end of the IPO range of $17 to $19 per share. Given the lack of upside, we would pass on this deal. </strong></p>
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<p><a href="https://www.smartkarma.com/entities/full-truck-alliance" target="_blank" data-smartkarma-citation="entities:33429:1" rel="noopener">Full Truck Alliance (YMM US)</a> (FTA) is getting ready to complete its IPO in the coming days. The company is offering 82.5 million ADS at $17 to $19 per ADS. Each ADS represents 20 Class A ordinary shares. At the top end of the IPO price range, the company could raise as much as $1.57 billion. Fidelity and Invesco plan to buy a total of $600 million worth of ADS in the IPO (40% of the deal).</p>
<p>Full Truck Alliance also plans to raise an additional $200 million in private placements to Mubadala Investment Co and Ontario Teachers' Pension Plan Board. At the IPO price of $18 per share, the company would have an implied market cap of <a href="https://www.renaissancecapital.com/IPO-Center/News/82793/Chinese-freight-platform-Full-Truck-Alliance-sets-terms-for-%241.5-billion-US" target="_blank" rel="noopener">$19.7 billion</a> on a fully diluted shares basis. </p>


Our base case valuation of Full Truck Alliance is implied market cap of $17.7 billion or $17.1 per share. Our valuation sensitivity suggests a range from $14.3 billion to $21.4 billion. Our base case valuation of $17.1 per share is close to the low end of the IPO range of $17 to $19 per share. Given the lack of upside, we would pass on this deal. 

Full Truck Alliance (YMM US) (FTA) is getting ready to complete its IPO in the coming days. The company is offering 82.5 million ADS at $17 to $19 per ADS. Each ADS represents 20 Class A ordinary shares. At the top end of the IPO price range, the company could raise as much as $1.57 billion. Fidelity and Invesco plan to buy a total of $600 million worth of ADS in the IPO (40% of the deal).
Full Truck Alliance also plans to raise an additional $200 million in private placements to Mubadala Investment Co and Ontario Teachers' Pension Plan Board. At the IPO price of $18 per share, the company would have an implied market cap of $19.7 billion on a fully diluted shares basis. 

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.

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<p><a href="https://www.smartkarma.com/entities/full-truck-alliance" target="_blank" data-smartkarma-citation="entities:33429:1" rel="noopener">Full Truck Alliance (YMM US)</a>, known as <em>Manbang</em> in China, is the world’s largest digital freight platform by gross transaction value (GTV) in 2020, according to CIC. FTA was formed in 2017 through the merger of <em>Yunmanman</em> and <em>Huochebang</em>, which were founded in 2013 and 2011, respectively. FTA is backed by SoftBank Vision Fund (22.2% of the outstanding shares), Sequoia Capital (7.2%), Hillhouse and <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>. </p>
<p>At the mid-point of the proposed IPO price range of $17.00-19.00 per ADS, FTA will have a market cap of $19.6 billion. FTA will also raise an additional $200 million in concurrent private placements to Ontario Teachers' Pension Plan Board and Mubadala Investment Company. At the mid-point of the IPO price range and including the concurrent private placement, the net proceeds are $1,620.7 million. FTA has received indications of interest from Fidelity ($100 million) and Invesco ($500 million). </p>
</div><div><p>In <a href="https://www.smartkarma.com/insights/full-truck-alliance-ipo-initiation-a-less-than-perfect-delivery" target="_blank" data-smartkarma-citation="insights:52399" rel="noopener">Full Truck Alliance IPO Initiation: A Less than Perfect Delivery</a>, we stated that at first sight, FTA recent results look stunning due to fast-paced growth, improving margin and cash generation. However, a closer look, suggests that FTA has less than ideal disclosure, a regulatory overhang and potential corporate governance issues. We concluded that we cannot recommend FTA wholeheartedly and inclined to watch this IPO unfold from the sidelines.   </p></div><div><div>
<div class="content-highlight"><p>Our valuation analysis suggests that FTA trades at frothy multiples (EV/Sales and growth adjusted EV/Sales) compared to its peers. On the other hand, the indications of interest and the concurrent placing with blue-chip investors suggest that the IPO price range is grounded in some logic. We think that the IPO pricing seems reasonable based on recent share repurchases and the PEG multiple. While the recent first-day pops suggest an awakening of IPO animal spirits, we remain uncomfortable in recommending FTA based on our previously highlighted concerns and a rich valuation. </p></div>
<p><em><strong>For readers interested in peer</strong></em>, <a href="https://www.smartkarma.com/entities/foru-worldwide-inc" target="_blank" data-smartkarma-citation="entities:33314:1" rel="noopener">ForU Worldwide (FOYO US)</a>, which also recently filed for a $500 million Nasdaq IPO, we highlight our note - <a href="https://www.smartkarma.com/insights/foru-worldwide-ipo-initiation-not-foru" target="_blank" data-smartkarma-citation="insights:51888" rel="noopener">ForU Worldwide IPO Initiation: Not ForU</a>  </p>
</div></div>


Full Truck Alliance (YMM US), known as Manbang in China, is the world’s largest digital freight platform by gross transaction value (GTV) in 2020, according to CIC. FTA was formed in 2017 through the merger of Yunmanman and Huochebang, which were founded in 2013 and 2011, respectively. FTA is backed by SoftBank Vision Fund (22.2% of the outstanding shares), Sequoia Capital (7.2%), Hillhouse and Tencent (700 HK). 
At the mid-point of the proposed IPO price range of $17.00-19.00 per ADS, FTA will have a market cap of $19.6 billion. FTA will also raise an additional $200 million in concurrent private placements to Ontario Teachers' Pension Plan Board and Mubadala Investment Company. At the mid-point of the IPO price range and including the concurrent private placement, the net proceeds are $1,620.7 million. FTA has received indications of interest from Fidelity ($100 million) and Invesco ($500 million). 
In Full Truck Alliance IPO Initiation: A Less than Perfect Delivery, we stated that at first sight, FTA recent results look stunning due to fast-paced growth, improving margin and cash generation. However, a closer look, suggests that FTA has less than ideal disclosure, a regulatory overhang and potential corporate governance issues. We concluded that we cannot recommend FTA wholeheartedly and inclined to watch this IPO unfold from the sidelines.   
Our valuation analysis suggests that FTA trades at frothy multiples (EV/Sales and growth adjusted EV/Sales) compared to its peers. On the other hand, the indications of interest and the concurrent placing with blue-chip investors suggest that the IPO price range is grounded in some logic. We think that the IPO pricing seems reasonable based on recent share repurchases and the PEG multiple. While the recent first-day pops suggest an awakening of IPO animal spirits, we remain uncomfortable in recommending FTA based on our previously highlighted concerns and a rich valuation. 
For readers interested in peer, ForU Worldwide (FOYO US), which also recently filed for a $500 million Nasdaq IPO, we highlight our note - ForU Worldwide IPO Initiation: Not ForU  


Full Truck Alliance IPO: Valuation Insights

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/full-truck-alliance" target="_blank" data-smartkarma-citation="entities:33429:1" rel="noopener">Full Truck Alliance (YMM US)</a> (FTA),  China’s largest digital freight platform by gross transaction value, aims to raise up to US$1.6bn via a US listing. It is backed by Softbank and Sequoia.</p></div><div><p>In our earlier notes, we spoke about the positive and negatives aspects of the deal, <a href="https://www.smartkarma.com/insights/full-truck-alliance-pre-ipo-the-positives-category-leader" target="_blank" rel="noopener">Full Truck Alliance Pre-IPO - The Positives - Category Leader</a> and <a href="https://www.smartkarma.com/insights/full-truck-alliance-pre-ipo-the-negatives-still-a-mixed-bag" target="_blank" rel="noopener">Full Truck Alliance Pre-IPO - The Negatives - Still a Mixed Bag,</a> as well as valuations in <a href="https://www.smartkarma.com/insights/full-truck-alliance-pre-ipo-valuation-even-the-previous-round-might-have-been-a-stretch" target="_blank" rel="noopener">Full Truck Alliance Pre-IPO - Valuation, Even the Previous Round Might Have Been a Stretch</a>.</p></div><div><p>In this note, we will talk about the deal dynamics and run the deal through our ECM framework. </p></div>

Full Truck Alliance (YMM US) (FTA),  China’s largest digital freight platform by gross transaction value, aims to raise up to US$1.6bn via a US listing. It is backed by Softbank and Sequoia.In our earlier notes, we spoke about the positive and negatives aspects of the deal, Full Truck Alliance Pre-IPO - The Positives - Category Leader and Full Truck Alliance Pre-IPO - The Negatives - Still a Mixed Bag, as well as valuations in Full Truck Alliance Pre-IPO - Valuation, Even the Previous Round Might Have Been a Stretch.In this note, we will talk about the deal dynamics and run the deal through our ECM framework. 

Full Truck Alliance IPO - Decent Investor Line-Up, at Best a Punt at These Valuations

China

Full Truck Alliance Co. Ltd. operates as a software company. The Company develops digital freight and logistics platform.

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Full Truck Alliance (YMM US)

Full Truck Alliance IPO: Peer Comparison and Valuation

FTA's implied valuation multiples are at a lofty premium to peers even if we assume a 100% revenue CAGR between 2020-22E. FTA's growth prospects do...

Shifara Samsudeen, FCMA, CGMA

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Granite Bay Capital

Full Truck Alliance Valuation Analysis

Our base case valuation of Full Truck Alliance is implied market cap of $17.7 billion or $17.1 per share. Given the lack of upside relative to the...

Douglas Kim

Full Truck Alliance IPO: Valuation Insights

While the recent first-day pops suggest an awakening of IPO animal spirits, we remain uncomfortable in recommending FTA based on our previously...

Arun George

Full Truck Alliance IPO - Decent Investor Line-Up, at Best a Punt at These Valuations

Full Truck Alliance (YMM US), China’s largest digital freight platform by gross transaction value, aims to raise up to US$1.6bn via a US listing....

Sumeet Singh

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