Alibaba-backed Energy Monster dips even as Goldman PT implies about 70% upside

KFC Holdings Japan

26/04/2021 18:09

** Shares of Smart Share Global  EM.O , Chinese mobile
charging devices provider which operates under "Energy Monster"
brand, down 1.0% at $8.19 on Mon
    ** Goldman Sachs initiates coverage with "buy" rating and PT
of $13.90, implying 68% upside to stock's Fri close
    ** GS cites Energy Monster's 34% market share of total
charging revenue in 2020, says with potential 7x TAM growth in
next 10 years, co well positioned to maintain leading position
while delivering higher margins than peers
    ** Brokerage positive on improving rev visibility with key
accounts (KA), such as Disney and KFC, that are exclusive and
duration higher than peers - 87% of contracts are >2 years
    ** Key risks include: intensified competition from existing
and new players, network stability and incentive levels with
POIs (Points of Interest), battery technology breakthrough that
could impact need and method of charging
    ** American Depositary Shares of EM initially jumped in
their Apr 1 U.S. debut, but have slumped since and trading below
$8.50 IPO price  urn:newsml:reuters.com:*:nL4N2LU42U
    ** Unit of Alibaba Group  BABA.K   9988.HK  is largest
shareholder with 16.5% stake while SoftBank subsidiaries hold
7.7% of co, per IPO filing https://www.sec.gov/Archives/edgar/data/1834253/000104746921000827/a2243138z424b4.htm#em19101_principal_shareholders

 (Lance Tupper is a Reuters market analyst. The views expressed
are his own)
 ((lance.tupper.tr.com@reuters.net
lance.tupper@tr.com 1-332-219-1430))