Daily BriefsIPOs and Placements

Equity Capital Markets: Gracell Biotechnologies Inc, RLX Technology Inc, Poshmark Inc, Roblox, Beijing Kuaishou Technology Co Ltd, New Horizon Health and more

In today’s briefing:

  • Gracell Biotechnologies (GRCL.US) – Could It Become a Game Changer?
  • RLX Technology Pre-IPO (RLX): Store Visits to Relx and Its Competitors
  • Poshmark IPO – Not a Bargain but a Reasonable Price for Reasonable Quality
  • RLX Technology IPO: Eyeing Global Dominance
  • Roblox DPO. Going Public Through A Direct Listing Instead Of A Traditional IPO
  • Kuaishou Technology Pre-IPO – Peer Comparison and Thoughts on Valuation
  • New Horizon Health (诺辉健康) Pre-IPO: Comparison with Exact Sciences

Gracell Biotechnologies (GRCL.US) – Could It Become a Game Changer?

By Xinyao (Criss) Wang

Gracell Biotechnologies Inc (GRCL US), a global clinical-stage biopharmaceutical company dedicated to discovering and developing breakthrough cell therapies, was listed on Nasdaq. On its first day of trading, Gracell’s shares jumped by about 32%, with a market value of $1.643 billion. Since the establishment, Gracell has had a clear listing schedule and plans to go public in early 2021. Gracell chooses to list on NASDAQ mainly because it believes that international capital market would be more suitable for the Company’s development, which is conducive to future cooperation with American research institutes and enterprises, license-in or acquisition. It is also worth mention that although there are many pharmaceutical companies in the CAR-T field, the limitations of the therapies are still very prominent. So how is Gracell different from others? Could it become a game changer?


RLX Technology Pre-IPO (RLX): Store Visits to Relx and Its Competitors

By Ming Lu

Relx Technology aims to raise around US$1bn in its US IPO.

  • We visited electronic cigarette (e-cig) stores of Relx, Vazo, Yooz, and Moti.
  • We conclude that the price of Relx-Classic, RMB299, is the benchmark of the e-cig market.
  • Relx has the largest market share because of its store number.
  • Vazo discounts its prices to be closer to Relx-Classic.
  • Yooz and Moti keep about RMB50~60 below Relx-Classic.

We have covered the basic background of the company in our earlier insights:


Poshmark IPO – Not a Bargain but a Reasonable Price for Reasonable Quality

By Mio Kato

Poshmark has announced its indicative pricing range at $35-39 per share which implies an EV between $2,189-2,486m. There are both positives and negatives when it comes to the business model but given the strength of “animal spirits” in the market at present this starts to look decidedly reasonably priced.


RLX Technology IPO: Eyeing Global Dominance

By Oshadhi Kumarasiri

RLX Technology Inc (RLX US), China’s number one e-vapor company with a market share of 62.6% of the closed-system e-vapor products as of September 2020 has filled for an IPO on the NYSE to raise about $1.0 billion.

The company intends to use IPO proceeds for development of products and technologies and scientific research, enhancement of distribution and retail network, improvement of supply chain capabilities, and general corporate purposes and working capital.


Roblox DPO. Going Public Through A Direct Listing Instead Of A Traditional IPO

By Andrei Zakharov

The online gaming and entertainment technology decacorn Roblox intends to sell of up to ~197 million shares of Class A common stock through a direct listing in February. The opening public price of common stock on the NYSE will be determined by buy and sell orders collected by the NYSE from broker-dealers. Roblox has the largest global online gaming community with more than 150 million MAUs and ~75% of all American children ages 9-12 play Roblox. In 2019 Roblox entered into a JV agreement with Songhua, an affiliate of Tencent Holdings to pursue opportunities of expanding business in China.

Goldman Sachs and Morgan Stanley are lead financial advisors on the upcoming DPO. Roblox raised ~$856 million in funding over 9 rounds, according to Crunchbase. Their latest $520 million Series H round was led by Altimeter Capital and Dragoneer Investment Group.

Altos Ventures, Tiger Global Management, Andreessen Horowitz, Investment Group of Santa Barbara and Warner Music Group also participated in this funding round. The Series H round valued Roblox at ~$29 billion, assuming a purchase price of $45 per share. 


Kuaishou Technology Pre-IPO – Peer Comparison and Thoughts on Valuation

By Sumeet Singh

Kuaishou Technology (KT) is a content community and social platform that is looking to raise around US$5bn in its Hong Kong IPO. The company is backed by Tencent, Sequoia China, Baidu, DST Global, Boyu Capital, Temasek and others.

As of six months ended Jun 2020, it had 302m daily active users (DAUs), who spent 85 mins on average on the app every day. It also had 776m monthly active users (MAUs) and total e-commerce GMV of RMB109.6bn. On an average 1.1bn short videos were uploaded on its app during 1H20.

As per iResearch, Kuaishou was globally the largest live streaming platform by gross billings from virtual gifting and average live streaming MPUs, the second largest short video platform by average DAUs, and the second largest live streaming e-commerce platform by GMV, over six months ended June 30, 2020.

I have covered various aspects of the company’s performance in my previous notes: 

In this note, I’ll undertake a peer comparison, provide earnings forecasts and talk about valuations. 


New Horizon Health (诺辉健康) Pre-IPO: Comparison with Exact Sciences

By Ke Yan, CFA, FRM

New Horizon Health, a pioneer in the colorectal cancer screening market in China, is looking to raise up to USD 300m to list via a Hong Kong listing.  

In our previous note (A hot medical device deal in making), we discussed that NH Health provides cancer screen kits for convenient early screening targeting populations recommended for regular cancer screening. The company’s approved product ColoClear has an impressive accuracy compared with peer products for colorectal cancer. In addition to ColoClear, it also offers a more mass-market product, Pupu Tube for home-based testing. The company’s products have a huge unmet market and a high barrier to entry. We believe its uniqueness as the only investable stock in the segment will make the deal interesting for investors. The company’s management has good prior working experience and is backed by a strong line up of international and domestic investors. 

In this note, we compare the company’s product with the benchmark product, Exact Sciences’ Cologuard. We think the company’s ColoClear is ahead of the Cologuard with improvement in clinical reading and the technology used. 


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