Revenues in 9М2019 — 9М2020
Invest in IPO OZON
OZON is a leading e-commerce platform in Russia. The company connects and facilitates transactions between buyers and sellers on its platform. According to INFOLine, OZON mobile app is one of the leading shopping apps in Russia by number of average monthly users, with approximately 10 million monthly average users. The company offers same-day delivery services in Moscow and in parts of the Moscow region and Saint Petersburg, and next-day delivery coverage for over 40% of the Russian population. Since its launch in September 2018, approximately 18,100 active sellers have joined OZON marketplace.
Sellers range from large retailers to small and medium-sized enterprises (“SME”), which collectively offer the widest selection of goods in the Russian e-commerce market at competitive prices. Ozon is regularly expanding the variety of products available to buyers by attracting more sellers to the marketplace.
The core addressable market is the Russian retail market, which was the fourth largest retail market in Europe, totaling $440B in 2019 and projected to total $600B in 2025, according to INFOLine. The increasing technological adoption accompanied by the easy availability of smartphones has enabled the e-commerce sector to be more reachable and efficient.
E-commerce penetration in Russia was only 6.0%, compared to 27.1%, 18.3%, and 15.2% in China, the United Kingdom, and the United States, respectively. OZON is working to address issues related to the under-penetration of the Russian e-commerce market by optimizing sourcing of products, adding new products to the catalog and broadening the number of product categories, as well as by optimizing online search and purchasing processes, minimizing click-to-delivery times and generally enhancing buyer service experience.
OZON may experience significant fluctuations in the results of operations and growth rate. It has incurred significant losses in the past and is likely to continue to incur losses as the company continues to invest in order to grow, and may not achieve profitability going forward.
OZON operates in a competitive market. If it fails to retain current market position, business and results of operations could be materially and adversely affected.
OZON is subject to currency related risk as it generates revenue in Russian rubles. The depreciation of Russian currency may negatively affect operating results of the company and its stock price.
OZON plans to sell 30 million American depositary shares at a price range of $22.50 to $27.50. The company intends to raise as much as $825M in an IPO of its common stock at about $5B valuation.
The company booked $1.145B in revenue for the last 12 months. Gross margin is around 30%. The company is growing rapidly with revenue growth of 70% YoY in the first 9 months of 2020, but is producing losses. Current investors have entered into private placement agreements to purchase an aggregate of $135 million of ADSs at the IPO price.
OZON is asking investors to pay 4.4x sales, which is a discount to the industry valuation. The average P/S ratio for public e-commerce companies listed in the US is 10x. The company has produced rapid revenue growth in the large underpenetrated market. However, OZON is still unprofitable and has not shown a clear path to future profitability. The expected return on investment is medium, up to 40%.
2-3 weeks before the start of the company publishes information about the opening of trading: financial statements for 3 years, a description of the company's business, plans for the future, as well as the risks that management sees in their own business. We analyze such offers and publish the best ones. Investors apply for deposits. Before the deadline for applications, you can change the request or cancel it.
We submit one large application for the purchase of shares by pre-subscription with reduced price to large investors. The application may be rejected in part or in full. Over the past three years, our applications have been rejected only three times. The next day, or every other day, we'll know at what price and at what percentage the order is executed, and we'll post it on «The my investment page».
The price of shares is rising from the first day due to the demand of investors deprived of the opportunity to buy shares before trading. Most of the stocks we've been recommending buying over the past three years have been starting to trade on the stock exchange at tens of percent higher than the price at which customers bought the shares. There comes a Lock up period when it is forbidden to sell shares purchased by subscription. Typically lasts 3 months.
After the expiration of the Lock Up period, the investment is automatically closed and the investor receives a profit on account of the deduction commissions UT. You can always view the results of your past investments in investment archive.
Although no shares are allowed to be sold during the lock-up period, our traders seek to offer investors fixed profit by way of using various financial instruments, including forwards, options, short positions etc.
From the investor’s point of view this means that he or she may close an investment by paying a certain part of its value (as a rule, approximately 15 percent). This is due to high prices for the instruments which are employed to ensure availability of fixed profit. As such, you shall press any relevant button in the Investor Account as soon as it is active.
The closing procedure is similar to commencement of investment business. You shall file a bid which is executed within a business day by UT. So, your investment is closed at the price currently prevailing on the stock exchange. However, we rarely recommend using this feature, since upon expiry of an applicable lock-up period the average performance is higher.
3 per cent of the share price. This fee is charged as soon as your investment bid is confirmed.
1.75 per cent of the purchase price paid for your shares as soon as trading is closed. This fee is charged upon closure of any relevant investment.
20 per cent of the profit your derive. This fee is charged only if you show positive performance as of the moment any relevant investment is closed.
TO EARLY EXIT
Usually, 15 per cent (depends on the stock exchange environment). It is calculated per each investment individually.
Our risk managers ensure proper support throughout the entire transaction.
IN THE PROFIT FROM THE FIRST DAY
Such an approach allows it to limit extra risks related to bankruptcy of start-ups and considerably increase profit vs investors purchasing shares on open Market.
LOW ENTRY THRESHOLD
Millions of dollars are required to buy shares on a subscription basis. We have generated a pool of traders and investors which enables any newbie to participate in any transaction as aforesaid by investing just USD50 or more.