IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/ximalaya-inc" target="_blank" data-smartkarma-citation="entities:33232:1" rel="noopener">Ximalaya (XIMA US)</a> is the largest online audio platform in China as measured by average MAUs (monthly active users), total mobile listening time, and total revenues in 2020, according to CIC. Ximalaya also has the largest audio content library and the most audio content creators in China. <br>Ximalaya is backed by <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> (5.4% of outstanding shares), <a href="https://www.smartkarma.com/entities/tal-education-group" target="_blank" data-smartkarma-citation="entities:1124:1" rel="noopener">TAL Education (TAL US)</a>, Sony Music Entertainment and <a href="https://www.smartkarma.com/entities/china-literature-ltd" target="_blank" data-smartkarma-citation="entities:24388:1" rel="noopener">China Literature (772 HK)</a>. Ximalaya has filed for an NYSE IPO to raise proceeds of $0.5-1.0 billion, according to press reports.   </p></div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/ximalaya-ipo-initiation-out-of-tune" target="_blank" data-smartkarma-citation="insights:51169" rel="noopener">Ximalaya IPO Initiation: Out of Tune</a>, we stated that Ximalaya is well-positioned to benefit from this sizeable China online audio market opportunity. The strong user engagement, fast-paced revenue growth and declining loss margin suggest that Ximalaya is heading in the right direction. However, a closer look reveals concerning developments on several fronts. We concluded that the negatives in the Ximalaya story warrant a pass. In this note, we present our forecasts and take the first look at Ximalaya's potential valuation range. </p></div></div>

Ximalaya (XIMA US) is the largest online audio platform in China as measured by average MAUs (monthly active users), total mobile listening time, and total revenues in 2020, according to CIC. Ximalaya also has the largest audio content library and the most audio content creators in China.  Ximalaya is backed by Tencent (700 HK) (5.4% of outstanding shares), TAL Education (TAL US), Sony Music Entertainment and China Literature (772 HK). Ximalaya has filed for an NYSE IPO to raise proceeds of $0.5-1.0 billion, according to press reports.   In Ximalaya IPO Initiation: Out of Tune, we stated that Ximalaya is well-positioned to benefit from this sizeable China online audio market opportunity. The strong user engagement, fast-paced revenue growth and declining loss margin suggest that Ximalaya is heading in the right direction. However, a closer look reveals concerning developments on several fronts. We concluded that the negatives in the Ximalaya story warrant a pass. In this note, we present our forecasts and take the first look at Ximalaya's potential valuation range. 

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<div><p><a href="https://www.smartkarma.com/entities/ximalaya-inc" target="_blank" data-smartkarma-citation="entities:33232:1" rel="noopener">Ximalaya (XIMA US)</a>, the largest online audio platform in China, is looking to raise around US$1bn in its US listing. </p></div><div><p>As of 1Q21, it had 250m average MAUs, which included 104m mobile MAUs through its apps and 146m MAUs through internet-of-things (IoT) and other third-party platforms. As per CIC, it accounted for 75% of total mobile listening time among all online audio platforms in China. It had 5.2m active content creators in 2020.</p></div><div>
<p>We have covered various aspects of the deal in our previous notes:<a href="https://www.smartkarma.com/insights/ximalaya-pre-ipo-the-positives-a-whole-lot-of-listening" target="_blank" rel="noopener"></a></p>
<ul>
<li>
<a href="https://www.smartkarma.com/insights/ximalaya-pre-ipo-the-positives-a-whole-lot-of-listening" target="_blank" rel="noopener"> Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening</a><a href="https://www.smartkarma.com/insights/ximalaya-pre-ipo-the-negatives" target="_blank" rel="noopener"></a>
</li>
<li><a href="https://www.smartkarma.com/insights/ximalaya-pre-ipo-the-negatives" target="_blank" rel="noopener">Ximalaya Pre-IPO - The Negatives</a></li>
<li><a href="https://www.smartkarma.com/insights/ximalaya-pre-ipo-peer-comparison" target="_blank" rel="noopener">Ximalaya Pre-IPO - Peer Comparison</a></li>
<li><a href="https://www.smartkarma.com/insights/ximalaya-xima-has-large-market-share-but-small-competitors-have-big-bosses" target="_blank" rel="noopener">Ximalaya (XIMA): Has Large Market Share, But Small Competitors Have Big Bosses</a></li>
</ul>
</div><div><p>In this note, we will talk about earnings and valuation.</p></div>

Ximalaya (XIMA US), the largest online audio platform in China, is looking to raise around US$1bn in its US listing. As of 1Q21, it had 250m average MAUs, which included 104m mobile MAUs through its apps and 146m MAUs through internet-of-things (IoT) and other third-party platforms. As per CIC, it accounted for 75% of total mobile listening time among all online audio platforms in China. It had 5.2m active content creators in 2020.
We have covered various aspects of the deal in our previous notes:


 Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening

Ximalaya Pre-IPO - The Negatives
Ximalaya Pre-IPO - Peer Comparison
Ximalaya (XIMA): Has Large Market Share, But Small Competitors Have Big Bosses

In this note, we will talk about earnings and valuation.

Ximalaya Pre-IPO - Earnings Forecast and Valuation

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

<ul>
<li>XIMA has a dominant market share based on monthly active users and time on site.</li>
<li>However, one small competitor is owned by Byte Dance and another is owned by Tencent Music.</li>
<li>We conclude that competition still exists.</li>
</ul>
<p>Also see <a href="https://www.smartkarma.com/insights/ximalaya-pre-ipo-peer-comparison" target="_blank" data-smartkarma-citation="insights:51324" rel="noopener">Ximalaya Pre-IPO - Peer Comparison</a>, <a href="https://www.smartkarma.com/insights/ximalaya-pre-ipo-the-negatives" target="_blank" data-smartkarma-citation="insights:51143" rel="noopener">Ximalaya Pre-IPO - The Negatives</a> , and <a href="https://www.smartkarma.com/insights/ximalaya-pre-ipo-the-positives-a-whole-lot-of-listening" target="_blank" data-smartkarma-citation="insights:51096" rel="noopener">Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening</a> by <a href="https://www.smartkarma.com/profiles/sumeet-singh" target="_blank" data-smartkarma-citation="accounts:4" rel="noopener">Sumeet Singh</a>. </p>


XIMA has a dominant market share based on monthly active users and time on site.
However, one small competitor is owned by Byte Dance and another is owned by Tencent Music.
We conclude that competition still exists.

Also see Ximalaya Pre-IPO - Peer Comparison, Ximalaya Pre-IPO - The Negatives , and Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening by Sumeet Singh. 

Ximalaya (XIMA): Has Large Market Share, But Small Competitors Have Big Bosses.

<p><a href="https://www.smartkarma.com/entities/ximalaya-inc" target="_blank" data-smartkarma-citation="entities:33232:1" rel="noopener">Ximalaya (XIMA US)</a> is the largest online audio platform in China as measured by average MAUs (monthly active users), total mobile listening time, and total revenues in 2020, according to CIC. Ximalaya also has the largest audio content library and the most audio content creators in China. <br>Ximalaya is backed by <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> (5.4% of outstanding shares), <a href="https://www.smartkarma.com/entities/tal-education-group" target="_blank" data-smartkarma-citation="entities:1124:1" rel="noopener">TAL Education (TAL US)</a> and Sony Music Entertainment. Ximalaya has filed for an NYSE IPO to raise proceeds of $0.5-1.0 billion, according to press reports. </p><p>China is the world’s largest online audio market in terms of the number of online audio users. However, the number of mobile online audio MAUs (monthly active users) in China accounted for only 16.1% of total mobile Internet MAUs in 2020, according to CIC. China’s online audio market in terms of revenue is forecasted to grow from RMB13.1 billion in 2020 to RMB120.1 billion by 2025, representing a CAGR of 55.8%, according to CIC.</p><div class="content-highlight">
<p>At first glance, Ximalaya is well-positioned to benefit from this sizeable market opportunity. The strong user engagement, fast-paced revenue growth and declining loss margin suggest that Ximalaya is heading in the right direction. However, a closer look reveals concerning developments on several fronts.</p>
<p><a href="https://www.smartkarma.com/entities/lizhi-inc" target="_blank" data-smartkarma-citation="entities:28396:1" rel="noopener">Lizhi Inc (LIZI US)</a>, a peer, is trading around 50% below its IPO price which suggests that investors are not overly enthused by plays on the China online audio market. With sentiment on Chinese US listings weakening, we think that the negatives in the Ximalaya story warrant a pass.  </p>
</div>

Ximalaya (XIMA US) is the largest online audio platform in China as measured by average MAUs (monthly active users), total mobile listening time, and total revenues in 2020, according to CIC. Ximalaya also has the largest audio content library and the most audio content creators in China.  Ximalaya is backed by Tencent (700 HK) (5.4% of outstanding shares), TAL Education (TAL US) and Sony Music Entertainment. Ximalaya has filed for an NYSE IPO to raise proceeds of $0.5-1.0 billion, according to press reports. China is the world’s largest online audio market in terms of the number of online audio users. However, the number of mobile online audio MAUs (monthly active users) in China accounted for only 16.1% of total mobile Internet MAUs in 2020, according to CIC. China’s online audio market in terms of revenue is forecasted to grow from RMB13.1 billion in 2020 to RMB120.1 billion by 2025, representing a CAGR of 55.8%, according to CIC.
At first glance, Ximalaya is well-positioned to benefit from this sizeable market opportunity. The strong user engagement, fast-paced revenue growth and declining loss margin suggest that Ximalaya is heading in the right direction. However, a closer look reveals concerning developments on several fronts.
Lizhi Inc (LIZI US), a peer, is trading around 50% below its IPO price which suggests that investors are not overly enthused by plays on the China online audio market. With sentiment on Chinese US listings weakening, we think that the negatives in the Ximalaya story warrant a pass.  


<div><p><a href="https://www.smartkarma.com/entities/ximalaya-inc" target="_blank" data-smartkarma-citation="entities:33232:1" rel="noopener">Ximalaya (XIMA US)</a>, the largest online audio platform in China, is looking to raise around US$1bn in its US listing. </p></div><div>
<p>As of 1Q21, it had 250m average MAUs, which included 104m mobile MAUs through its apps and 146m MAUs through internet-of-things (IoT) and other third-party platforms. As per CIC, it accounted for 75% of total mobile listening time among all online audio platforms in China. It had 5.2m active content creators in 2020.</p>
<p>In our previous note,<a href="https://www.smartkarma.com/insights/ximalaya-pre-ipo-the-positives-a-whole-lot-of-listening" target="_blank" rel="noopener"> Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening</a>, we covered the positive aspects of the deal.</p>
</div><div><p>In this note, we will talk about the not so pleasant aspects of the deal.</p></div>

Ximalaya (XIMA US), the largest online audio platform in China, is looking to raise around US$1bn in its US listing. 
As of 1Q21, it had 250m average MAUs, which included 104m mobile MAUs through its apps and 146m MAUs through internet-of-things (IoT) and other third-party platforms. As per CIC, it accounted for 75% of total mobile listening time among all online audio platforms in China. It had 5.2m active content creators in 2020.
In our previous note, Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening, we covered the positive aspects of the deal.
In this note, we will talk about the not so pleasant aspects of the deal.

China

iQIYI, Inc. offers video entertainment services. The Company provides movies, television dramas, variety shows, and other video contents. iQIYI offers services worldwide.

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iQIYI Inc (IQ US)

Ximalaya IPO: Valuation First-Look

Ximalaya has filed for an NYSE IPO to raise proceeds of $0.5-1.0 billion. In this note, we present our forecasts and take the first look at...

Arun George

Ximalaya Pre-IPO - Earnings Forecast and Valuation

Ximalaya (XIMA US), the largest online audio platform in China, is looking to raise around US$1bn in its US listing. As of 1Q21, it had 250m...

Sumeet Singh

Ximalaya IPO Initiation: Out of Tune

At first glance, Ximalaya is well-positioned to benefit from the sizeable China online audio market opportunity. However, a closer look reveals...

Arun George

Ximalaya Pre-IPO - The Negatives

Ximalaya (XIMA US), the largest online audio platform in China, is looking to raise around US$1bn in its US listing. In this note, we will talk...

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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Ximalaya IPO: Valuation First-Look

Ximalaya has filed for an NYSE IPO to raise proceeds of $0.5-1.0 billion. In this note, we present our forecasts and take the first look at...

Arun George

Ximalaya Pre-IPO - Earnings Forecast and Valuation

Ximalaya (XIMA US), the largest online audio platform in China, is looking to raise around US$1bn in its US listing. As of 1Q21, it had 250m...

Sumeet Singh

Ximalaya (XIMA): Has Large Market Share, But Small Competitors Have Big Bosses.

XIMA has a dominant market share based on monthly active users and time on site. However, one small competitor is owned by Byte Dance and another...

Ming Lu

Ximalaya IPO Initiation: Out of Tune

At first glance, Ximalaya is well-positioned to benefit from the sizeable China online audio market opportunity. However, a closer look reveals...

Arun George

Ximalaya Pre-IPO - The Negatives

Ximalaya (XIMA US), the largest online audio platform in China, is looking to raise around US$1bn in its US listing. In this note, we will talk...

Sumeet Singh