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aCommerce is an ecommerce enabler providing end-to-end and ala carte ecommerce solutions for brands in Southeast Asia (SEA). As per Euromonitor, the firm is the largest fully integrated service provider in SEA, with a market share of 16.5% as per 2020 gross merchandise value (GMV).
ACOM’s changing GMV and sales mix has left its gross margins fluctuating with higher margin items affected by the global supply crunch. While the firm did manage to narrow its losses, in our view, given its razor thin gross margins, the firm would probably have to expand further and faster to become profitable, instead of aiming for further cost efficiencies, given the already tight ratio of exp as % of sales. It has also, in the past, racked up payables to produce a positive cash inflow. As at end-1Q22’s cash pile, and assuming that ACOM burns cash at similar rates as that in 1Q22, the firm only has around 2.4 quarters of operational runway.
This note should be read in conjunction with our previous note:
Acommerce Pre-IPO - Beneficiary of COVID However, Has Been Losing Market Share
aCommerce Pre-IPO
aCommerce is looking to raise about US$200m in its upcoming Thailand IPO.aCommerce is an ecommerce enabler providing end-to-end and ala carte ecommerce solutions for brands in Southeast Asia (SEA). As per Euromonitor, the firm is the largest fully integrated service provider in SEA, with a market share of 16.5% as per 2020 gross merchandise value (GMV).
ACOM’s changing GMV and sales mix has left its gross margins fluctuating with higher margin items affected by the global supply crunch. While the firm did manage to narrow its losses, in our view, given its razor thin gross margins, the firm would probably have to expand further and faster to become profitable, instead of aiming for further cost efficiencies, given the already tight ratio of exp as % of sales. It has also, in the past, racked up payables to produce a positive cash inflow. As at end-1Q22’s cash pile, and assuming that ACOM burns cash at similar rates as that in 1Q22, the firm only has around 2.4 quarters of operational runway.
This note should be read in conjunction with our previous note:
Acommerce Pre-IPO - Beneficiary of COVID However, Has Been Losing Market Share
Underlying
Acommerce Group
Provider
Aequitas Research
Aequitas Research is a leading ECM research firm with a focus on IPOs and placements/follow-on offerings across the Asia Pacific with deal size of over USD100m.
Since 2015, we have covered 400+ IPOs and 450+ placements with a hit rate of 73% and 65%, respectively. We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic analysis.
Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis. We also provide a more quant driven analysis on placement/follow-on offerings.
Markets that we cover include:
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Hong Kong,
China ADRs,
India,
Japan,
Australia, and
ASEAN.
Clarence Chu
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