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/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.

Ming Yuan Cloud Group / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/ming-yuan-cloud-group" target="_blank" data-smartkarma-citation="entities:29268:1" rel="noopener">Ming Yuan Cloud Group (MYCG HK)</a> is the leading software solution provider for property developers in China with a market share of 18.5% as measured by revenue in 2019, according to Frost &amp; Sullivan. Ming Yuan has launched its IPO at a price range of $15.00-16.50 per share. At the mid-point of the IPO price range, Ming Yuan will raise net proceeds of HK$5,635.9 million ($727 million). Six cornerstone investors will subscribe for 36.3% of the shares under the global offering, at the mid-point of the IPO price range. The cornerstone investors are Hillhouse Capital, GIC, China Structural Reform Fund, Sequoia Capital, BlackRock and Fidelity International. </p><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/ming-yuan-cloud-ipo-initiation-new-wiring" target="_blank" rel="noopener">our initiation note</a>, we stated that Ming Yuan’s fundamentals are attractive due to several factors. Overall, we think that a reasonable PEG valuation, a market-leading business and solid cornerstone support makes Ming Yuan tempting at the proposed pricing range. </p></div>

Ming Yuan Cloud Group (MYCG HK) is the leading software solution provider for property developers in China with a market share of 18.5% as measured by revenue in 2019, according to Frost &amp; Sullivan. Ming Yuan has launched its IPO at a price range of $15.00-16.50 per share. At the mid-point of the IPO price range, Ming Yuan will raise net proceeds of HK$5,635.9 million ($727 million). Six cornerstone investors will subscribe for 36.3% of the shares under the global offering, at the mid-point of the IPO price range. The cornerstone investors are Hillhouse Capital, GIC, China Structural Reform Fund, Sequoia Capital, BlackRock and Fidelity International. In our initiation note, we stated that Ming Yuan’s fundamentals are attractive due to several factors. Overall, we think that a reasonable PEG valuation, a market-leading business and solid cornerstone support makes Ming Yuan tempting at the proposed pricing range. 

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/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.</p>
<p>In this insight, I'll talk about the recent updates and do a quick peer comparison</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 this insight, I'll talk about the recent updates and do a quick peer comparison


KE Holdings/​Beike Pre-IPO - Recent Updates, Peer Comparison

China

Leju Holdings Ltd provides online real estate services. The Company offers advertising, listings information and online-to-offline e-commerce to their clients. Leju operates in the real estate market in China.

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Leju Holdings Ltd Adr (LEJU US)

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...

Arun George

Ming Yuan Cloud IPO: Valuation Insights

Ming Yuan Cloud Group (MYCG HK) is the leading software solution provider for property developers in China with a market share of 18.5% as measured...

Arun George

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

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...

Sumeet Singh

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...

Arun George

KE Holdings/Beike Pre-IPO - Recent Updates, Peer Comparison

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

Sumeet Singh

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52-week Range

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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...

Arun George

Ming Yuan Cloud IPO: Valuation Insights

Ming Yuan Cloud Group (MYCG HK) is the leading software solution provider for property developers in China with a market share of 18.5% as measured...

Arun George

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

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...

Sumeet Singh

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...

Arun George

KE Holdings/​Beike Pre-IPO - Recent Updates, Peer Comparison

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

Sumeet Singh

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

KE Holdings/Beike Pre-IPO - Recent Updates, Peer Comparison