Greater China Equity Long/Short Analyst

Eric Chen

Equity Bottom-Up

<ul>
<li>Koolearn’s successful transformation into a live-streaming e-commerce business showcased outstanding entrepreneurship and leadership of its founder Michael Yu, whom we highly respect.</li>
<li>That said, we expect its growth to decelerate materially after hitting RMB18 billion GMV by 2024. We value Koolearn at RMB36 billion (20% downside), drawing reference to VIPShop growth trajectory.</li>
<li>While high-frequency data on live-streaming business will drive near-term stock price (and potentially to the upside), its current valuation doesn’t pay off for long -term investors in our view.</li>
</ul>


Koolearn’s successful transformation into a live-streaming e-commerce business showcased outstanding entrepreneurship and leadership of its founder Michael Yu, whom we highly respect.
That said, we expect its growth to decelerate materially after hitting RMB18 billion GMV by 2024. We value Koolearn at RMB36 billion (20% downside), drawing reference to VIPShop growth trajectory.
While high-frequency data on live-streaming business will drive near-term stock price (and potentially to the upside), its current valuation doesn’t pay off for long -term investors in our view.


Koolearn (1797 HK): Don't Overpay for Growth

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.

Event-Driven

<ul>
<li>Today PCAOB announced that they had secured complete access to inspect and investigate Chinese Firms for the first time in history.</li>
<li>This was on back of the Aug 2022 agreement between PCAOB, CSRC and MOF, which was followed up with a Hong Kong visit by PCAOB officials over Sep-Nov 2022.</li>
<li>We wrote about this on 14th Dec 2022 and expected the results to be out on Friday (16th Dec), they have come out a day earlier than we expected.</li>
</ul>


Today PCAOB announced that they had secured complete access to inspect and investigate Chinese Firms for the first time in history.
This was on back of the Aug 2022 agreement between PCAOB, CSRC and MOF, which was followed up with a Hong Kong visit by PCAOB officials over Sep-Nov 2022.
We wrote about this on 14th Dec 2022 and expected the results to be out on Friday (16th Dec), they have come out a day earlier than we expected.


China ADRs Delisting - Christmas Came a Day Earlier than We Expected - No Delisting Risk for Now

<ul>
<li>PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.</li>
<li>The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.</li>
<li>In this note, we'll talk about the latest developments, possible outcomes and implications.</li>
</ul>


PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
In this note, we'll talk about the latest developments, possible outcomes and implications.


China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<ul>
<li>ATRenew (RERE US) is one of the stocks in China that is starting to look very attractive after a sharp decline in its share price since its IPO.</li>
<li>ATRenew has achieved noticeable improvements in operations and profitability in the recent quarter.</li>
<li>Our base case valuation analysis suggests an implied market cap of US$720 million, representing an implied price of US$3.15 per share, representing an upside of 43% from current price.</li>
</ul>


ATRenew (RERE US) is one of the stocks in China that is starting to look very attractive after a sharp decline in its share price since its IPO.
ATRenew has achieved noticeable improvements in operations and profitability in the recent quarter.
Our base case valuation analysis suggests an implied market cap of US$720 million, representing an implied price of US$3.15 per share, representing an upside of 43% from current price.


ATRenew: A Turnaround Story With Material Increase in Profit Margins + Remaining Share Buyback

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/atrenew-inc" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener">ATRenew (RERE US)</a> operates the largest pre-owned consumer electronics transactions and services platform in China. It is listed in June 2021 at US$14 per ADS. </li>
<li>The shares are down 63% YTD largely due to the tech market sell-off. Unlike most tech companies, ATRenew is starting to deliver growth with profits, cash generation and share buybacks.</li>
<li>The valuation is undemanding compared to a peer group of pre-owned marketplaces and global online retail marketplaces. It will also appeal to investors with an ESG mandate.</li>
</ul>



ATRenew (RERE US) operates the largest pre-owned consumer electronics transactions and services platform in China. It is listed in June 2021 at US$14 per ADS. 
The shares are down 63% YTD largely due to the tech market sell-off. Unlike most tech companies, ATRenew is starting to deliver growth with profits, cash generation and share buybacks.
The valuation is undemanding compared to a peer group of pre-owned marketplaces and global online retail marketplaces. It will also appeal to investors with an ESG mandate.


ATRenew (RERE US): Pre-Owned Satisfaction

China

Vipshop Holdings Ltd. retails branded products at discount over the Internet. The Company retails through flash sales, in which limited quantities of an item are sold at deep discount for a specified period of time.

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Vipshop Holdings (VIPS US)

Koolearn (1797 HK): Don't Overpay for Growth

We draw reference to VIPShop and value Koolearn at RMB36 billion by 2024 – 20% downside to its current valuation, based on 20x PE on RMB1.8 billion...

Eric Chen

China ADRs Delisting - Christmas Came a Day Earlier than We Expected - No Delisting Risk for Now

Today PCAOB announced that they had secured complete access to inspect and investigate Chinese Firms for the first time in history. This removes...

Sumeet Singh

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

ATRenew (RERE US): Pre-Owned Satisfaction

Unlike most tech companies, ATRenew is starting to deliver growth with profits, cash generation and share buybacks. The valuation remains undemanding.

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Koolearn (1797 HK): Don't Overpay for Growth

We draw reference to VIPShop and value Koolearn at RMB36 billion by 2024 – 20% downside to its current valuation, based on 20x PE on RMB1.8 billion...

Eric Chen

China ADRs Delisting - Christmas Came a Day Earlier than We Expected - No Delisting Risk for Now

Today PCAOB announced that they had secured complete access to inspect and investigate Chinese Firms for the first time in history. This removes...

Sumeet Singh

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

ATRenew: A Turnaround Story With Material Increase in Profit Margins + Remaining Share Buyback

Our base case valuation analysis of ATRenew suggests an implied market cap of US$720 million, representing an implied price of US$3.15 per share,...

Douglas Kim

ATRenew (RERE US): Pre-Owned Satisfaction

Unlike most tech companies, ATRenew is starting to deliver growth with profits, cash generation and share buybacks. The valuation remains undemanding.

Arun George