written by Matt Cheng
For Cherubic Ventures, 2021 has been a fruitful year. After Hims & Hers went public on the NYSE early this year, Cherubic Ventures welcomed a second IPO on May 25th as 91APP (6741.TWO) went public. Although 91APP joins a list of other public ecommerce companies in Taiwan, 91APP stands out with its spectacular performance. With an offering price of $2.4, 91APP’s stock price instantaneously rose to $5.2 at its opening and reached a high of $6.5. At the end of its debut, 91APP closed with $6, a 153% increase of its original price, with a remarkable evaluation of $726M.
However, what struck me the most from 91APP’s initial performance was that its P/E ratio nearly reached 90, going head-to-head with Shopify’s 96. The day after their IPO, 91APP’s P/E ratio continued to increase and surpassed 100 by its closing. Despite a recent global chip shortage, 91APP’s outstanding performance reflects the resilience that is similarly seen in strong capital market performances across the board, especially in Taiwan’s TSMC, dubbed the “sacred mountain defending the nation,” as it continued to soar in public markets. These past couple of days, many friends have reached out to me to discuss the underlying significance of 91APP’s IPO. Among the many comments, someone even remarked to me, “Wow, I didn’t expect Taiwan could give this high of a valuation! Maybe we should also consider going public in Taiwan.
To be honest, seeing 91APP’s performance makes me both happy and slightly frightened; I believe this is a new era in Taiwan where markets now are starting to understand the software industry and other new innovative sectors. Before 91APP became listed, the business world universally thought that its P/E ratio would fall between 20 and 30, close to that of TSMC; this goes to show the low expectations that markets have already determined for 91APP. However, after its opening, 91APP soared with flying colors to everyone’s surprise. As I watched, I became extremely excited at the sight of what will begin a change in Taiwanese markets.
For a long time, Taiwan’s markets have primarily focused on the hardware manufacturing industry, making it hard for the new generation of software entrepreneurs to achieve high valuations. Many of them pursue public markets in Japan or as far as the US. However, 91APP’s recent IPO not only serves as a milestone as Taiwan’s “first successful SaaS company” but also creates more possibilities for other innovative SaaS companies to reach Taiwanese markets.
91APP hopes to become the TSMC of the global retail industry. I, on the other hand, personally hope that the Taiwan market becomes more accustomed to investing in new and innovative industries because of 91APP and that the global investors also recognize the growing possibilities in Taiwanese markets. Just as investors look for opportunities afar in foreign markets, investors now no longer have to look too far. We can now say proud and clear: Taiwan is a market with many opportunities waiting to be found.