By Tim Culpan
In its first earnings announcement since the Sept. 20 listing, the Chinese operator of food-delivery, ride-hailing and bike-rental businesses reported a blowout in its net loss for the first half.
Hong Kong’s IPO window is closing fast, as evidenced by dwindling liquidity and the narrowing investor base. HK’s most recent tech IPOs have languished, with many below their offering prices.
If Oyo uses the recently secured $1 billion to run a tighter ship, there’s every chance it could be the world’s largest hotel chain within five years. If quality plays second fiddle to expansion, it risks becoming a brand name that’s of little value to anyone.
Family offices are favoring higher risk, more illiquid investments in the pursuit of alpha.
For the past five years, the sharing economy has taken southeast Asia by storm. But, the next big thing will be AI, robotics, self-driving and the other areas in frontier technology.
In a December press release, Mobike claimed 200 million users worldwide. Meituan’s prospectus says otherwise – 48.1 million Active Bike Users, 7.1 million Active Bikes and over 1 billion rides completed in the four months ended April 30, 2018.
Indochina – which comprises Cambodia, Laos, Myanmar, Vietnam and Thailand – is fast catching investor interest even though the return timeline appears to be long drawn.
Does size really matter? Yes, larger investments do allow PE firms to do more. However, smaller deals in hot sectors promise good exits.
The only viable way for the Chinese to make money in Indonesia is perhaps through industry consolidation. After all, Indonesia has already seen some high-profile mergers, such as Grab’s takeover of Uber’s entire Southeast Asian business this year.
The future of PE in emerging markets is all about acting on data-driven insights about what works and doesn’t work, says Mekong Capital founder and partner Chris Freund.