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

<p>The Chinese online recruitment platform <a href="https://www.smartkarma.com/entities/kanzhun-ltd" target="_blank" data-smartkarma-citation="entities:33368:1" rel="noopener">Kanzhun (BZ US)</a>  has priced its IPO at US$19 per ADS, at the upper end of the IPO price range of US$17-19 per ADS. Kanzhun will raise approx. US$912m at the above price of US$19 per ADS at a market capitalisation of US$7.6bn and a post-money enterprise value of US$5.98bn.</p><p> In our previous insights on the company's IPO, we examined Kanzhun's business model, financials, outlook and valuation.</p><p><a href="https://www.smartkarma.com/insights/kanzhun-ipo-hunt-for-success" target="_blank" data-smartkarma-citation="insights:52618" rel="noopener">Kanzhun IPO: Hunt for Success</a> </p><p><a href="https://www.smartkarma.com/insights/kanzhun-ipo-peer-comparison-and-valuation" target="_blank" data-smartkarma-citation="insights:52738" rel="noopener">Kanzhun IPO: Peer Comparison and Valuation</a> </p>

The Chinese online recruitment platform Kanzhun (BZ US)  has priced its IPO at US$19 per ADS, at the upper end of the IPO price range of US$17-19 per ADS. Kanzhun will raise approx. US$912m at the above price of US$19 per ADS at a market capitalisation of US$7.6bn and a post-money enterprise value of US$5.98bn. In our previous insights on the company's IPO, we examined Kanzhun's business model, financials, outlook and valuation.Kanzhun IPO: Hunt for Success Kanzhun IPO: Peer Comparison and Valuation 

Kanzhun IPO: Thoughts on First Day Trading

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.

<div><p><a href="https://www.smartkarma.com/entities/kanzhun-ltd" target="_blank" data-smartkarma-citation="entities:33368:1" rel="noopener">Kanzhun (BZ US)</a> is the largest online recruitment platform in China, as measured by the average MAU in 2020, according to CIC. Its <em>BOSS Zhipin</em> mobile app connects job seekers and enterprise users. </p></div><div><p>Kanzhun has priced its IPO at $19.00 per ADS to raise gross proceeds of $912 million, <a href="https://www.ifre.com/story/2913154/kanzhun-prices-nasdaq-ipo-at-top-to-raise-us912m-smlgvfl3m3" target="_blank" rel="noopener">according to IFR</a>. At the final IPO price of $19 per share, Kanzhun will have a market cap of $7.6 billion. The IPO got off to a strong start due to indications of interest for $375 million worth of ADSs in the offering from existing investors (Sequoia Capital and Tiger Global) and new investors (UBS Asset Management, GIC and Mubadala Investment).</p></div><div><p>In <a href="https://www.smartkarma.com/insights/kanzhun-ipo-initiation-search-and-employ" target="_blank" data-smartkarma-citation="insights:51969" rel="noopener">Kanzhun IPO Initiation: Search and Employ</a>, we opined that Kanzhun’s strong growth in users and fast-paced revenue growth suggests another “growth at all costs” strategy. Encouragingly, the high revenue visibility, declining loss margin and cash generation suggest that Kanzhun can eventually deliver this growth profitability. We concluded that the Kanzhun story warrants a closer look. In <a href="https://www.smartkarma.com/insights/kanzhun-ipo-growth-margin-trade-off-vs-peers" target="_blank" data-smartkarma-citation="insights:52333" rel="noopener">Kanzhun IPO: Growth/Margin Trade-Off Vs Peers</a>, we opined that Kanzhun provides growth and revenue visibility vs margin and cash generation trade-off in comparison to its listed peers. In <a href="https://www.smartkarma.com/insights/kanzhun-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:52575" rel="noopener">Kanzhun IPO: Valuation Insights</a> we noted that the IPO price range is attractive. </p></div><div><div><div class="content-highlight"><p>Updating for the final IPO net raise, our base-case DCF derived price target of $21.02 per ADS. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis points to a meaningful upside based on achievable targets for market share and/or terminal EBIT margin. </p></div></div></div>

Kanzhun (BZ US) is the largest online recruitment platform in China, as measured by the average MAU in 2020, according to CIC. Its BOSS Zhipin mobile app connects job seekers and enterprise users. Kanzhun has priced its IPO at $19.00 per ADS to raise gross proceeds of $912 million, according to IFR. At the final IPO price of $19 per share, Kanzhun will have a market cap of $7.6 billion. The IPO got off to a strong start due to indications of interest for $375 million worth of ADSs in the offering from existing investors (Sequoia Capital and Tiger Global) and new investors (UBS Asset Management, GIC and Mubadala Investment).In Kanzhun IPO Initiation: Search and Employ, we opined that Kanzhun’s strong growth in users and fast-paced revenue growth suggests another “growth at all costs” strategy. Encouragingly, the high revenue visibility, declining loss margin and cash generation suggest that Kanzhun can eventually deliver this growth profitability. We concluded that the Kanzhun story warrants a closer look. In Kanzhun IPO: Growth/Margin Trade-Off Vs Peers, we opined that Kanzhun provides growth and revenue visibility vs margin and cash generation trade-off in comparison to its listed peers. In Kanzhun IPO: Valuation Insights we noted that the IPO price range is attractive. Updating for the final IPO net raise, our base-case DCF derived price target of $21.02 per ADS. As DCF-based target prices are subject to a wide range of variability, we present a sensitivity table to help investors gauge where target prices could head. Our DCF sensitivity analysis points to a meaningful upside based on achievable targets for market share and/or terminal EBIT margin. 

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.

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<p><a href="https://www.smartkarma.com/entities/kanzhun-ltd" target="_blank" data-smartkarma-citation="entities:33368:1" rel="noopener">Kanzhun (BZ US)</a>, an online recruitment platform in China, raised around US$912m in its US IPO. The company is backed by <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>. Kanzhun runs BOSS Zhipin APP, which allows enterprise users and jobseekers to directly chat, thus, providing more convenience to both.</p>
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<p>We have covered various aspects of the deal in our earlier notes <a href="https://www.smartkarma.com/insights/kanzhun-pre-ipo-bumble-meets-linkedin" target="_blank" rel="noopener">Kanzhun Pre-IPO -Bumble meets Linkedin</a> and <a href="https://www.smartkarma.com/insights/kanzhun-ipo-fast-growth-strong-investor-support-cash-flow-positive" target="_blank" rel="noopener">Kanzhun IPO - Fast Growth, Strong Investor Support, Cash Flow Positive...</a>.</p>
<p>In this note, we look at deal dynamics and provide an update on valuation.  </p>
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Kanzhun (BZ US), an online recruitment platform in China, raised around US$912m in its US IPO. The company is backed by Tencent (700 HK). Kanzhun runs BOSS Zhipin APP, which allows enterprise users and jobseekers to directly chat, thus, providing more convenience to both.



We have covered various aspects of the deal in our earlier notes Kanzhun Pre-IPO -Bumble meets Linkedin and Kanzhun IPO - Fast Growth, Strong Investor Support, Cash Flow Positive....
In this note, we look at deal dynamics and provide an update on valuation.  


Kanzhun IPO Trading - Should Be Able to Turn the China ADR Sentiment Around

<p><a href="https://www.smartkarma.com/entities/dingdong-maicia" target="_blank" data-smartkarma-citation="entities:33461:1" rel="noopener">Dingdong Maicia (DDL US)</a>(DM) and <a href="https://www.smartkarma.com/entities/missfresh-limited" target="_blank" data-smartkarma-citation="entities:33468:1" rel="noopener">Missfresh (MF US)</a> (MFL) are two groceries on-demand e-commerce companies in China, both aim to raise up to US$500m each via a US listing. </p><p>In our earlier notes, we have looked at the background and performance of both of the companies:</p><ul>
<li dir="ltr" aria-level="1"><p><a href="https://www.smartkarma.com/insights/dingdong-maicai-pre-ipo-increasing-market-share-fast-growth-but-no-signs-of-profit" target="_blank" rel="noopener">Dingdong Maicai Pre-IPO - Increasing market share, fast growth but no signs of profit</a></p></li>
<li dir="ltr" aria-level="1"><p><a href="https://www.smartkarma.com/insights/missfresh-limited-pre-ipo-worrying-and-unsustainable-trend" target="_blank" rel="noopener">Missfresh (每日优鲜) Pre-IPO - Worrying and unsustainable trend</a></p></li>
</ul><p>Since both of the companies are operating in similar markets, in this note we will compare the performance of the two companies.</p>

Dingdong Maicia (DDL US)(DM) and Missfresh (MF US) (MFL) are two groceries on-demand e-commerce companies in China, both aim to raise up to US$500m each via a US listing. In our earlier notes, we have looked at the background and performance of both of the companies:
Dingdong Maicai Pre-IPO - Increasing market share, fast growth but no signs of profit
Missfresh (每日优鲜) Pre-IPO - Worrying and unsustainable trend
Since both of the companies are operating in similar markets, in this note we will compare the performance of the two companies.

Dingdong Maicai Vs Miss Fresh Pre-IPO - One Clear Winner

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<p>On 27th May 2021, U.S. Senators Marco Rubio and Bob Casey introduced the <em>No IPOs for Unaccountable Actors Act</em>, which aims to prohibit IPO on U.S. exchanges for Chinese companies. </p>
<p>The act is a follow up on the Holding Foreign Companies Accountable Act which was signed by Trump on 18th Dec 2020 and which seeks to stop China ADRs from being traded on the US exchanges.</p>
</div><div><p>We have looked at the ADRs in the past, in our previous notes:</p></div><div>
<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/china-adrs-secondary-listing-deep-dive-yin-and-yang" target="_blank" rel="noopener">China ADRs Secondary Listing Deep-Dive: Yin and Yang,</a> published in Feb 2020,  we looked at the background and rules around undertaking a secondary listing in Hong Kong and then came up with a short-list of companies that might undertake a secondary listing. </li>
<li>
<a href="https://www.smartkarma.com/insights/china-adrs-secondary-listing-covid-19-has-increased-the-tension-but-narrowed-the-short-list" target="_blank" rel="noopener">In China ADRs Secondary Listing: COVID-19 Has Increased the Tension but Narrowed the Short List</a> published in May 2020, we looked at the recent developments and provided an revised short-list</li>
<li>In <a href="https://www.smartkarma.com/insights/china-adrs-secondary-listing-holding-foreign-companies-accountable-act-i-m-coming-home" target="_blank" rel="noopener">China ADRs Secondary Listing - Holding Foreign Companies Accountable Act - I’m Coming Home</a>, published in May 2020, we spoke about the implication of the act which had made its way through the senate.</li>
<li>In <a href="https://www.smartkarma.com/insights/china-adrs-secondary-listing-pipeline-looks-rich-have-three-years-to-move" target="_blank" rel="noopener">China ADRs Secondary Listing - Pipeline Looks Rich, Have Three Years to Move</a>, published in Feb 2021 we looked at the ADR pipeline and spoke about the updates from the Holding Foreign Companies Accountable Act becoming law and the updates at Hong Kong end as well. </li>
<li>In <a href="https://www.smartkarma.com/insights/china-adrs-sec-notice-instead-of-three-probably-have-four-years-till-2025-correction-overdone" target="_blank" rel="noopener">China ADRs - SEC Notice - Instead of Three, Probably Have Four Years till 2025 - Correction Overdone, </a> we spoke about the new SEC notice and its implications. </li>
</ul>
<p>In this note, we'll talk about the new act and its possible timelines and implications.</p>
</div>


On 27th May 2021, U.S. Senators Marco Rubio and Bob Casey introduced the No IPOs for Unaccountable Actors Act, which aims to prohibit IPO on U.S. exchanges for Chinese companies. 
The act is a follow up on the Holding Foreign Companies Accountable Act which was signed by Trump on 18th Dec 2020 and which seeks to stop China ADRs from being traded on the US exchanges.
We have looked at the ADRs in the past, in our previous notes:


China ADRs Secondary Listing Deep-Dive: Yin and Yang, published in Feb 2020,  we looked at the background and rules around undertaking a secondary listing in Hong Kong and then came up with a short-list of companies that might undertake a secondary listing. 

In China ADRs Secondary Listing: COVID-19 Has Increased the Tension but Narrowed the Short List published in May 2020, we looked at the recent developments and provided an revised short-list
In China ADRs Secondary Listing - Holding Foreign Companies Accountable Act - I’m Coming Home, published in May 2020, we spoke about the implication of the act which had made its way through the senate.
In China ADRs Secondary Listing - Pipeline Looks Rich, Have Three Years to Move, published in Feb 2021 we looked at the ADR pipeline and spoke about the updates from the Holding Foreign Companies Accountable Act becoming law and the updates at Hong Kong end as well. 
In China ADRs - SEC Notice - Instead of Three, Probably Have Four Years till 2025 - Correction Overdone,  we spoke about the new SEC notice and its implications. 

In this note, we'll talk about the new act and its possible timelines and implications.


China ADRs - A New Act Aims to Put an End to China ADR IPOs

China

Kanzhun Limited provides online recruitment services. The Company connects job seekers and enterprise users through its mobile application. Kanzhun offers a mobile-native product that promotes instant direct chats between enterprise users and job seekers.

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Kanzhun (BZ US)

Kanzhun IPO: Thoughts on First Day Trading

We would not be surprised if Kanzhun's EV/Sales exceeds more than 18-20x on its first day trading given the strong growth prospects for Kanzhun.

Shifara Samsudeen, FCMA, CGMA

Kanzhun IPO: Trading Debut

Kanzhun has priced its IPO at $19 per ADS to raise $912 m. Our DCF sensitivity analysis points to a meaningful upside based on achievable targets...

Arun George

Kanzhun IPO Trading - Should Be Able to Turn the China ADR Sentiment Around

Kanzhun (BZ US), an online recruitment platform in China, raised around US$912m in its US IPO. The company is backed by Tencent (700 HK).

Sumeet Singh

Dingdong Maicai Vs Miss Fresh Pre-IPO - One Clear Winner

Dingdong Maicia (DDL US)(DM) and Missfresh (MF US) (MFL), are two groceries on-demand e-commerce companies in China, both aim to raise up to...

Sumeet Singh

China ADRs - A New Act Aims to Put an End to China ADR IPOs

On 27th May 2021, U.S. Senators Marco Rubio and Bob Casey introduced the No IPOs for Unaccountable Actors Act, which aims to prohibit IPO on U.S....

Sumeet Singh

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