ConsumerDaily Briefs

Consumer: Zomato, Tesla Motors, Kakao Pay, Bajaj Auto Ltd, Avanti Feeds and more

In today’s briefing:

  • ECM Weekly (11th July 2021) – Zomato, Bukalapak, Kakao Bank, Krafton, Didi, Kanzhun, Full Truck
  • 2H21 Obex Research Short Portfolio
  • Kakao Pay IPO: Do Not Worry About Maturing MAU Growth
  • Morning India: Bajaj Auto: Exports cushion domestic weakness
  • Avanti Feeds: Favourable Culture Conditions Provide Better Outlook

ECM Weekly (11th July 2021) – Zomato, Bukalapak, Kakao Bank, Krafton, Didi, Kanzhun, Full Truck

By Zhen Zhou, Toh

Aequitas Research puts out a weekly update on the deals that have been covered by the team recently along with updates for upcoming IPOs.

China ADRs were rattled this week. It began with announcements of a cyber security review into newly-listed DiDi Chuxing, Kanzhun and Full Truck Alliance by the Cyberspace Administration of China (CAC). 

Since then, China has pledged greater scrutiny of data for listed companies and is considering regulations that will hinder Chinese firms from listing overseas. In our notes this week, we discuss the news in greater detail and what it means for future listings:

China ADR ECM pipeline will be subject to greater uncertainty and deal flow should come to a halt for the foreseeable future. Expectedly, LinkDoc, which closed its books early for its US$211m bookbuild, has since shelved its IPO and China e-Commerce platform, Meicai, has also postponed its US IPO plan.

Prior to the news, we initiated on Alibaba and Daojia Limited, one of the largest one-stop home services platforms in China. 

For live IPOs, attention finally shifted away from Hong Kong to other APAC countries. In India, food delivery platform, Zomato, secured SEBI approval for its listing and launched its upsized bookbuild to raise US$1.26bn (up from US$1.1bn). The firm is backed by Alipay, Temasek, Uber and Sequoia. Demand for the deal has been considerably high thus far, with anchor books set to open on Tuesday. Shares will debut on 27 July.

In Hong Kong, the focus next week will be on biotech/healthcare names. Medlive Technology and Kindstar Globalgene Technology both closed their bookbuilds earlier than stipulated, citing strong investor demand. Both deals were priced at the top end. Medlive will debut on Thursday, and Kindstar, on Friday. We covered both deals earlier: 

Brii Biosciences closed its books a day earlier as well, raising US$320m. The deal boasts an impressive lineup of 11 cornerstones that includes Oppenheimer, UBS, Boyu, Yunfeng, Sequoia etc., combining to take up half the total deal size. 

For our ongoing coverage, we followed up with peer comparison and preliminary valuation on fresh food and FMCG retailer, WM Tech, and its US$1bn deal.  

Tencent-backed games developer Krafton Inc. is also set to launch its US$3.8bn bookbuild this coming Wednesday. The company is known for developing the global hit, PlayerUnknown’s Battlegrounds (PUBG), an online multiplayer battle royale game. Books are expected to close on 27 July and to trade on 10 August. 

Despite the general market weakness mid week, Hong Kong debuts have mostly done well except for Xpeng which closed 5.8% below deal price largely due to its ADR trading lower. On the other hand, Chaoju Eye Care and Keymed closed 40.4% and 30.2% above their respective IPO price by Friday’s close.

For placements and potential ones this week, we think that there is a good chance that RLX Technology Inc (RLX US)‘s pre-IPO investors could come to market to sell considering the impact from regulation.

Jinxin Fertility Investment Group sold part of its stake in Jinxin Fertility Group to raise US$99m. Deal was priced at a 6.6% to undisturbed price and has traded downwards, closing 9.15% below deal price on Friday. 

Accuracy Rate:

Our overall accuracy rate is 73.8% for IPOs and 67.5% for Placements 

(Performance measurement criteria is explained at the end of the note)

New IPO filings this week

  • Bukalapak (Indonesia, US$1bn)

News on Upcoming IPOs

Hong Kong/China

US/China ADRs



Analysis on Upcoming IPOs

Hong Kong

Anjuke Pre-IPO – Mixed (Positive and Negative) Developments 

Betta Pharma

Betta Pharma (贝达医药) A+H: Tier 2 Player Struggled to Break Out 


Broncus (堃博医疗) Pre-IPO: Big Potential to Be Tested 


ByteDance (字节跳动) IPO: How Jinri Toutiao Paves The Way for a Bigger Empire (Part 1)


ByteDance (字节跳动) Pre-IPO: Why Facebook Should Worry About TikTok 


ByteDance (字节跳动) IPO: Tiktok the No.1 Short Video App for a Good Reason (Part 2)


ByteDance (字节跳动) Pre-IPO: How Has It Done in 1H? 


ByteDance: The Unlisted Company’s Video Apps Leading the Market and Threatening Internet Giants 


ByteDance (字节跳动) Pre-IPO: Why Facebook Should Worry About TikTok 


ByteDance (字节跳动) Pre-IPO – Globally the Most Downloaded App for Jan 2020 Driven by India 


ByteDance (字节跳动) Pre-IPO: Global Ambition Meets Regulatory Challenges 


Dida Pre-IPO – Making Hay While Big Brother Retreats 


Dida Pre-IPO – Earnings Forecast and First Stab at Valuation 


Dida Pre-IPO – Peer Comparison – Lagging in Scale, Leading in Profitability 

Edding Grp

Edding Group (亿腾医药) Pre-IPO: Notes from Latest Financials and Its Related Party 

Edding Grp

Edding Group (亿腾医药) Pre-IPO: Notes from Latest Financials and Its Related Party 


Shanghai Hanyu (捍宇医疗) Pre-IPO: Not a Straight-A but Listing at Right Time 

Intco Med

Intco Medical (英科医疗) A+H: From China No.1 to Global No. 1 


Kilcoy Global Foods Pre-IPO – Rapid Earnings Growth on the Back of Margin Improvement 


Kilcoy Global Foods Pre-IPO – A Lot of Things Still Remain Unexplained 


Novotech Pre-IPO: Biotech Focused CRO at Hefty Pre-IPO Valuation 

RemeGen RemeGen (荣昌生物) Pre-IPO: Thoughts on Valuation of RC18 and RC48 
SH Bio-heart Shanghai Bio-Heart (上海百心安) Pre-IPO: Needs a Long Runway 
Toplist Toplist China Pre-IPO – Overwhelmingly More Negatives than Positives 
Tasly Tasly Biopharm (天士力生物) IPO: Visible Growth from Approved Drug but Lacks Blockbusters 
WeDoctor WeDoctor (微医) Pre-IPO -App Walk Through – The Online Medical Directory and More 
WeDoctor WeDoctor (微医) Pre-IPO – A More Focused Online Medical Svc Provider than Ping An Good Doctor 
WeDoctor We Doctor (微医) Pre-IPO – Peer Comparison – Picking Its Battles Wisely 
WeDoctor We Doctor (微医) Pre-IPO – Forecasts, Early Thoughts on Valuation, and Acquisition Gripes 
Weilong Weilong Delicious Global Pre-IPO – The Positives – Fast Growth, Strong Backers 
Weilong Weilong Delicious Global Pre-IPO – The Negatives – Spicy Valuation 
WM Tech WM Tech Pre-IPO – Digitalization Efforts Coming Through but Not Well Substantiated 
WM Tech WM Tech Pre-IPO – Peer Comparison and Pre-IPO Valuation – Some Signs of Advantage 
Aadhar Housing Aadhar Housing Finance Pre-IPO – Decent past Growth but Comes with Weird Disclosures 
ASK ASK Investment Managers Pre-IPO – Riding on a Wave of Wealth 
Anmol IndAnmol Industries Pre-IPO Quick Take – No Growth, Generous Payments to Founders
Bharat Hotel

Bharat Hotels Pre-IPO – Catching up with Peers 

Bajaj En

Bajaj Energy Pre-IPO – Supposed to Deliver Steady Performance if Only Its Sole Client Would Let It 

CMS InfoCMS Info Systems Pre-IPO – When a PE Sells to Another PE… Only One Gets the Timing Right
Crystal CropCrystal Crop Protection Pre-IPO – DRHP Raises More Questions than in Answers
ESAF SFB ESAF Small Finance Bank Pre-IPO – Growing Fast but Remains Highly Dependant on a Related Party 
Flemingo Flemingo Travel Retail Pre-IPO – Its a Different Business in Every Country
Emami Cem Emami Cement Pre-IPO – Still in Ramp Up Phase but Shares Pledge Might Lead to an Early IPO 
NSENSE IPO Preview- Not Only Fast..its Risky and Expensive
NSENational Stock Exchange Pre-IPO Review – Bigger, Better, Stronger but a Little Too Fast for Some


Life Insurance Corporation of India Pre-IPO – Early Take on India’s Largest IPO 
Penna Cem Penna Cement – Aggressive Expansion Plans Even Though Past Performance Has Been Tepid 
PNB MetPNB Metlife Pre-IPO Quick Take – Doesn’t Stack up Well Versus Its Larger Peers
Samhi Hotels Samhi Hotels Pre-IPO – Assets and Borrowings Are Growing, but Earnings Haven’t Kept Pace 
Zomato Zomato Pre-IPO – Filings Lack Narrative, a Little Bit of History Helps 
Zomato Zomato Pre-IPO – Food Delivery Revenue Was Probably up 16x 
QSRQSR Brands Pre-IPO – As Healthy as Fast Food
The U.S.
ForU ForU Worldwide Pre-IPO – Mostly Negatives 
Qiniu Qiniu Cloud (七牛云) Pre-IPO: PaaS Doesn’t Warrant a Premium 

2H21 Obex Research Short Portfolio

By Aaron Gabin

Some updated thinking on our shorts: We like the Teradata short setup into 2Q21, and think Tesla may finally be safe to short. Well, safe as it ever gets. Apple remains our preferred large cap short, while Disney we flip from long biased to short biased as Disney+ subscriber numbers have decelerated massively. 

Obex’s fundamental research process is focused on secular change in the TMT and Consumer sectors. We seek to differentiate between fundamental business analysis and security analysis. Before deciding if a security’s pricing and positioning merit a long or short position, we analyze the four pillars of business fundamentals (Secular Factors, TAM, Competitive Advantage, Business Model) in order to determine if this is a “good” or “not so good” opportunity.  

Kakao Pay IPO: Do Not Worry About Maturing MAU Growth

By Oshadhi Kumarasiri

Backed by Ant Financial Services Group (6688 HK) and the South Korean Internet company Kakao Corp (035720 KS), Kakao Pay (KAK KS) started off as a mobile wallet/mobile payment service capable of handling payments, remittances, and P2P transactions. While the mobile wallet business is considered rather important, as it is the foundation for creating a cashless society, mobile wallet is not really a profitable venture capable of surviving on its own (it is unable to charge sufficient amounts from merchants and customers to offset high operating costs such as IPG costs). However, the payment business provides the platform to attract and retain customers for Kakao Pay’s financial services business, which is more profitable.

With 19.5m monthly active users (MAU) (around 45% of South Korea’s adult population) as of March 2021, alongside stiff competition from Naver Pay, Toss, Payco, and Samsung Pay, it is natural that Kakao Pay’s payment business may experience a deceleration in MAU growth in the next few years.

Nonetheless, we are unrattled by the payment business’ slower growth prospects, as the financial services business, which is just starting to gain momentum, is more than capable of replacing the payment business’ lost growth potential and that too in a profitable manner.

Morning India: Bajaj Auto: Exports cushion domestic weakness

By Motilal Oswal

While its share in the domestic Motorcycle market declined marginally (50bp to 18%), led by market share loss of 770bp in the Sports segment due to cannibalization by Pulsar 125cc. It expects to further strengthen its position in the Premium segment, with…

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Avanti Feeds: Favourable Culture Conditions Provide Better Outlook

By Geojit BNP Paribas

Revenue/PAT to grow at 18%/23% CAGR over FY21-23E. We value AFL at FY23E P/E of 19x considering healthy growth & RoE, and no debt. Revenue growth aided by healthy growth in feed volumes For Q4FY21, revenue grew by 6% YoY on account of 16%YoY growth in Feed segment while Exports de-grew by 23%YoY. Feed volumes improved by 14%YoY while export volumes declined by 19%YoY mainly due to disruption in marine logistics, weak demand, and recall of certain products sold in USA. As restaurants & malls are reopening, demand is picking up which is supporting prices also.

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

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