ConsumerDaily Briefs

Consumer: Zomato, NIO Inc, iCar Asia Ltd, Nayuki Holdings, Coupang and more

In today’s briefing:

  • Zomato IPO: Offering Details & Index Inclusion
  • Nio Inc – Structural Subordination to Hefei Investors and Associated Risks
  • ICar (ICQ AU): Carsome & Catcha Carpool
  • Zomato IPO Valuation: Making Losses In Most Favorable Circumstances
  • Nayuki (奈雪) Post IPO – Potential Catalysts – Where to from Here?
  • CPNG: Is Coupang Biz that Big of a Deal?

Zomato IPO: Offering Details & Index Inclusion

By Brian Freitas

Zomato (ZOM IN) is a leading online food service platform that connects customers, restaurant partners and delivery partners. Zomato had 148,384 active food delivery restaurants and 169,802 active delivery partners during the month of March 2021 and on average 6.8m customers ordering food every month in fiscal 2021.

Zomato (ZOM IN)‘s IPO will open on 14 July and run till 16 July with an expected listing date of 27 July.

Zomato (ZOM IN) is looking to raise INR 93.75bn (~US$1.26bn) at a price range of INR 72-76/share valuing the company at close to US$8bn.

Moneycontrol has reported that the company has raised US$560m by allotting shares to Anchor Investors. This ties in with our calculations of 60% of the QIP portion being allotted to Anchor investors.

Given the allocation to anchor investors and the lock-up on those shares, we do not expect the stock to get Fast Entry to the MSCI and FTSE indices. Zomato (ZOM IN) could be included in the MSCI Standard index at the November SAIR while the stock could be added to the FTSE All-World index at the December QIR.

Entry to the NIFTY Index (NIFTY INDEX) and S&P BSE SENSEX Index (SENSEX INDEX) could come in the second half of 2022 at the earliest given that the stock will need to meet additional criteria to be a part of the index universe.

Nio Inc – Structural Subordination to Hefei Investors and Associated Risks

By Jason Yap, CFA

In recent months, NIO Inc (NIO US) announced record vehicle deliveries and ambitious domestic and international expansion plans.  These developments highlight the significant progress it made compared to early 2020 when it appeared to be on the verge of bankruptcy.  This article discusses the Hefei Investors’ emergency funding which facilitated Nio Inc’s subsequent business and share price turnaround but subjected ADR holders to certain risks including, amongst others, structural subordination in terms of their claim on the key operating assets in China.

ICar (ICQ AU): Carsome & Catcha Carpool

By David Blennerhassett

Back on the 30 October 2020, iCar Asia Ltd (ICQ AU), owner and operator of automotive portals in Malaysia, Indonesia, and Thailand, announced it had received a non-binding proposal from China-based Autohome (2518 HK), another auto internet platform, to acquire 100% of iCar’s shares for A$0.50/share by way of a Scheme of Arrangement.

A trading update on the 26 February said discussions were still ongoing regarding Autohome’s proposal, with similar wording in the 30 April update, and the 2020 annual report (page 34).

The New News

iCar has now announced it has received a non-binding proposal from privately-held Carsome Group to acquire 100% of iCar’s shares for A$0.55/share by way of a Scheme.

Separately Malaysian-based Carsome has entered into an agreement with Catcha Group, iCar’s largest shareholder, to acquire 19.9% of shares out in iCar via the issuance of shares in Carsome. That side agreement and the proposal are conditional on ASIC relief.

Provided the agreement completes, Carsome and Catcha will jointly acquire the remaining shares not owned in iCar.

This agreement/proposal appears an initial step towards listing Carsome/Catcha. 

The announcement also says discussions remain ongoing with Autohome. 

More below the fold. 

Zomato IPO Valuation: Making Losses In Most Favorable Circumstances

By Oshadhi Kumarasiri

We previously examined Zomato (ZOM IN) and expressed our concerns regarding the company’s unit cost dynamics mentioning that the FY21 operating loss is a sign that Zomato is incapable of generating profits even from its most loyal customers who stuck with the company during the hardest days of COVID-19.

The offer period begins tomorrow (will continue till 16th July 2021) at a price range of INR 72.0-76.0 per share, which implies a market cap range of INR 569.6-596.2bn.

Nayuki (奈雪) Post IPO – Potential Catalysts – Where to from Here?

By Zhen Zhou, Toh

Nayuki raised US$656m at HK$19.80 per share, the top-end of its IPO price range, but it is now trading 18% below IPO price.

In this note, we look at potential upcoming catalysts and share updated thoughts on valuation.

Nayuki is the operator of Nayuki teahouses, a premium modern teahouse chain in China. The company had a network of 420 Nayuki teahouses across 61 cities in China as of September 30, 2020. As per CIC, Nayuki is the most extensive premium modern teahouse network in China in terms of the number of cities covered.

We had previously covered the IPO in:

CPNG: Is Coupang Biz that Big of a Deal?

By Henry Kwon

Since June 25, CPNG has outperformed NASDAQ by 16.90%, rising by 19.1%. The stock closed above its 10-day EMA for the third consecutive session today, and it seem that there is now an ascending channel that may have formed. From a valuation perspective, Risk-Free Rate as defined by the 10-year Treasury yield, has come down to 1.42% from 1.65% and consensus forecasts have been revised upwards since we last addressed CPNG’s valuation issues (see CPNG: Dead Cat Bounce or a More Sustainable Price Recovery in the Cards?).

There were two news items we are aware of that have had a major impact on CPNG’s recent rally:

  • News that CPNG would be able to refinance its 5.5%, 5-year loan from Goldman Sachs to finance its warehouse burned down by fire, at a more favorable rate of around 2% (see, should have been a non-event since CPNG is insured against fire damage. However, the shares reacted positively to the news on June 29, which is June 30 in Korea when media focused on the debt refinancing issue.
  • News that CPNG has just registered its “Coupang Biz” trademark for its planned B2B business for small-medium size businesses shopping for office equipment and other MRO items (see should also have been a non-starter from a fundamental standpoint, since anecdotal evidence seems to envision Coupang Biz to add about KRW 1.0trn to its top line at an as of yet unannounced timeline in the future. In other words, the news should be taken at face value, but no sane analyst should run out and immediately add what amounts to about 5% upgrade in FY21 consensus revenue forecasts based on what is in media reports. However, the news seems to have been at least responsible for today’s 3.39% jump in share price.

CPNG’s shares closed above its 10-Day EMA for the third consecutive day at close today, with what looks like an ascending channel that may be forming. MACD is positively postured but RSI sits a little on the high side now at 67.28 albeit with further room for strength. The trading volumes reached 6.92m shares, from the 2.5-3.7m share range seen since the beginning of July. As for share price implications for the rest of the week:

  • Short Term Bullish Scenario: Following the third consecutive day’s close above its 10-Day EMA today, the shares could try to break above the 61.8% Fibonacci retracement level at $45.30. If sufficient momentum builds the shares may attempt to break above the 50% retracement level at $49.83, but can face resistance in the 46.00-47.00 zone, which looks like the upper bounds of the ascending channel formation we referred to above.
  • Short Term Bearish Scenario: The surge in trading volume seen today could also indicate a topping move, so in case of a pullback, investors should see the $41-42 price range along the 10-Day EMA as the first level of support, with the 21-Day EMA as the next level of support. Below these levels, we would expect shares to test the 78.6% Fibonacci retracement level at $38.86.

In the short run, we believe from experience that fundamentals could take a long time to get priced into the share price of any stock, so investors should carefully weigh whether they will invest in CPNG or just trade the shares, because the choice could imply two very different courses of action. Having said that, it never hurts to buy low whether investing or trading. CPNG’s next fundamental catalyst should come from the company’s 2Q earnings release, which we anticipate is likely to take place in mid-August (see

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