Differentiated global TMT & Internet Research

New Street Research Insights

New Street Research

Research is provided by our team of experienced analysts. Our work is idea driven, based on independence of thought, sector expertise, and firmly focused on fundamentals and valuation of telecoms and internet names globally. New Street is headquartered in London with offices in New York, Singapore and Australia. 

New Street Research is an independent, partner-owned, research firm specialising in equity and debt research. Our equity research embraces the following sectors:

Pan European Telecom Services and Cable
US Telecoms, Cable, Satellite and Towers
Global Emerging Market Telecoms
Japan Telecoms
Asian Internet
Pan European Healthcare
US Healthcare
Japanese Healthcare

We also provide debt research on:
Pan European Telecom Services and Cable

Equity Bottom-Up

We remain positive on the long-term prospects for <a href="https://www.smartkarma.com/entities/17203" target="_blank" data-smartkarma-citation="entities:17203:1">NetEase (NTES US)</a>, which we see as one of the dominant online game companies in China (along with <a href="https://www.smartkarma.com/entities/26" target="_blank" data-smartkarma-citation="entities:26:1">Tencent (700 HK)</a>).  However, in the short term, we are concerned that softness in mobile games is likely to extend through 3Q and into 4Q this year as hit titles mature. That is likely to continue to weigh on sentiment. Longer term we expect its position in online games to remain strong while its eCommerce efforts are also growing strongly. We have…

We remain positive on the long-term prospects for NetEase (NTES US), which we see as one of the dominant online game companies in China (along with Tencent (700 HK)).  However, in the short term, we are concerned that softness in mobile games is likely to extend through 3Q and into 4Q this year as hit titles mature. That is likely to continue to weigh on sentiment. Longer term we expect its position in online games to remain strong while its eCommerce efforts are also growing strongly. We have…

We Expect Mobile Game Softness at Netease to Remain in 2017

Investment Advisors, JL Warren Capital

Junheng Li

Investment Advisors

JL Warren Capital

JL Warren Capital LLC is a leading independent equity research firm focused on Chinese companies and listed multinationals in China. We employ a bottom-up research approach that takes great care to avoid the acquisition of material non-public information. Through investigative due diligence including channel surveys and interviews, our research helps clients to pinpoint the dislocations in the market.

We believe that without the launches of a few new major mobile games, the upside in the stock of <a href="https://www.smartkarma.com/entities/17203" target="_blank" data-smartkarma-citation="entities:17203:1">NetEase Inc (ADR) (NTES US)</a> is capped.  As of Q2, mobile is about 72% of total game revenue and 41% of group revenue.  The success of launches of new mobile games is the key to the stock.  Investors tend to be more willing to pay for a concentrated portfolio of major hits of hundreds of millions RMB in monthly GMV) than a collection of many small games each generating only a few million RMB.  With…

We believe that without the launches of a few new major mobile games, the upside in the stock of NetEase Inc (ADR) (NTES US) is capped.  As of Q2, mobile is about 72% of total game revenue and 41% of group revenue.  The success of launches of new mobile games is the key to the stock.  Investors tend to be more willing to pay for a concentrated portfolio of major hits of hundreds of millions RMB in monthly GMV) than a collection of many small games each generating only a few million RMB.  With…

Netease Q3 Update: Awaiting New Blockbuster Games

We updated our price target and forecasts for <a href="https://www.smartkarma.com/entities/26" target="_blank" data-smartkarma-citation="entities:26:1">Tencent (700 HK)</a> recently ahead of the 2Q result. Our price target moved from HK$260 to HK$371. The increase was due in part to the forecast changes (around $30 of the increase) but the major driver was a reduction in the discount rate we use for our DCF valuation (to 10% from 12%). To some extent we are falling into line with the share price (now HK$327), but our view on Tencent and <a href="https://www.smartkarma.com/entities/787" target="_blank" data-smartkarma-citation="entities:787:1">Alibaba (BABA US)</a> is evolving and we think they can justify a lower…

We updated our price target and forecasts for Tencent (700 HK) recently ahead of the 2Q result. Our price target moved from HK$260 to HK$371. The increase was due in part to the forecast changes (around $30 of the increase) but the major driver was a reduction in the discount rate we use for our DCF valuation (to 10% from 12%). To some extent we are falling into line with the share price (now HK$327), but our view on Tencent and Alibaba (BABA US) is evolving and we think they can justify a lower…

Tencent Continues to Surge past Expectations. Its Earnings Flexibility Makes It a Core Holding.

Whilst positive sentiment built up after the company’s impressive AI developers’ conference, we remain cautious on near to mid-term monetization at <a href="https://www.smartkarma.com/entities/179" target="_blank" data-smartkarma-citation="entities:179:1">Baidu (BIDU US)</a> while competition for advertising spend from social media remains a challenge.Baidu beat expectations in its recent 2Q17 results as other service revenue (+126% YoY) exceeded forecasts although ad sales (+6% YoY) disappointed.  3Q revenue guidance was driven by better than expected growth in iQiyi subscription services and lower…

Whilst positive sentiment built up after the company’s impressive AI developers’ conference, we remain cautious on near to mid-term monetization at Baidu (BIDU US) while competition for advertising spend from social media remains a challenge.Baidu beat expectations in its recent 2Q17 results as other service revenue (+126% YoY) exceeded forecasts although ad sales (+6% YoY) disappointed.  3Q revenue guidance was driven by better than expected growth in iQiyi subscription services and lower…

Baidu Beats Expectations in 2Q17 but Too Early to Cheer. We Remain at Neutral.

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Exposure to <a href="https://www.smartkarma.com/entities/1088" target="_blank" data-smartkarma-citation="entities:1088:1">Vipshop Holdings Ltd Adr (VIPS US)</a> continues to be scaled back by global emerging market equity funds.  The percentage of EM funds holding any exposure to Vipshop has fallen from a peak of 32% in late 2015 to just 12% today (from 127 global EM actively managed equity funds).  The peak coincided with Vipshop's entry into the MSCI EM Index in November 2015, but since then funds have consistently cut positions.  The average holding weight among all funds stands at just 7bps…

Exposure to Vipshop Holdings Ltd Adr (VIPS US) continues to be scaled back by global emerging market equity funds.  The percentage of EM funds holding any exposure to Vipshop has fallen from a peak of 32% in late 2015 to just 12% today (from 127 global EM actively managed equity funds).  The peak coincided with Vipshop's entry into the MSCI EM Index in November 2015, but since then funds have consistently cut positions.  The average holding weight among all funds stands at just 7bps…

Vipshop Holdings Loses Appeal with EM Funds.  Netease Exposure Snowballs.

China

NetEase, Inc. is an Internet technology company that develops applications, services and other Internet technologies in China. The Company's core businesses consist of email service, web portal and online entertainment, including online gaming services. NetEase also offers online advertising, search, mobile applications and e-commerce.

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NetEase Inc (NTES US)

We Expect Mobile Game Softness at Netease to Remain in 2017

We remain positive on the long-term prospects for NetEase (NTES US), which we see as one of the dominant online game companies in China (along with...

New Street Research

Netease Q3 Update: Awaiting New Blockbuster Games

We believe that without the launches of a few new major mobile games, the upside in the stock of NetEase Inc (ADR) (NTES US) is capped. As of Q2,...

JL Warren Capital

Tencent Continues to Surge past Expectations. Its Earnings Flexibility Makes It a Core Holding.

We updated our price target and forecasts for Tencent (700 HK) recently ahead of the 2Q result. Our price target moved from HK$260 to HK$371. The...

New Street Research

Baidu Beats Expectations in 2Q17 but Too Early to Cheer. We Remain at Neutral.

Whilst positive sentiment built up after the company’s impressive AI developers’ conference, we remain cautious on near to mid-term monetization at...

New Street Research

Vipshop Holdings Loses Appeal with EM Funds. Netease Exposure Snowballs.

Exposure to Vipshop Holdings Ltd Adr (VIPS US) continues to be scaled back by global emerging market equity funds. The percentage of EM funds...

Steven Holden

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