Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Event-Driven

On Friday evening, the Stock Exchange of Hong Kong Limited (SEHK), a wholly-owned subsidiary of <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a>, <a href="https://www.hkex.com.hk/News/Regulatory-Announcements/2020/201030news?sc_lang=en" target="_blank" rel="noopener">published</a> the conclusions to its consultation on the Corporate WVR beneficiaries.The SEHK will treat Greater China issuers that are controlled by corporate Weighted Voting Rights (WVRR) beneficiaries and have a primary listing on a Qualifying Exchange in the same manner as current grandfathered Greater China issuers. The cut-off date for the grandfathered issues is 30 October 2020.Qualifying corporate WVR issuers will need to meet the following requirements:<ul>
<li>a minimum market cap threshold of at least HK$40bn, or a market cap of at least HK$10bn and revenue of at least HK$1bn in its most recent audited financial year.</li>
<li>be an 'innovative company' as part of the suitability for listing</li>
<li>demonstrate that the laws, rules and regulations provide certain shareholder protection standards</li>
</ul>The secondary listing applicant would also need to demonstrate that it is controlled by a single corporate WVR beneficiary, or a group of corporate beneficiaries acting in concert, controlling at least 30% of the total shareholder votes.This paves the way for <a href="https://www.smartkarma.com/entities/tencent-music-entertainment" target="_blank" data-smartkarma-citation="entities:27255:1" rel="noopener">Tencent Music (TME US)</a> and <a href="https://www.smartkarma.com/entities/iqiyi-inc" target="_blank" data-smartkarma-citation="entities:26755:1" rel="noopener">iQIYI Inc (IQ US)</a>, among others, to pursue a secondary listing on the <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a>.

On Friday evening, the Stock Exchange of Hong Kong Limited (SEHK), a wholly-owned subsidiary of HKEX (388 HK), published the conclusions to its consultation on the Corporate WVR beneficiaries.The SEHK will treat Greater China issuers that are controlled by corporate Weighted Voting Rights (WVRR) beneficiaries and have a primary listing on a Qualifying Exchange in the same manner as current grandfathered Greater China issuers. The cut-off date for the grandfathered issues is 30 October 2020.Qualifying corporate WVR issuers will need to meet the following requirements:
a minimum market cap threshold of at least HK$40bn, or a market cap of at least HK$10bn and revenue of at least HK$1bn in its most recent audited financial year.
be an 'innovative company' as part of the suitability for listing
demonstrate that the laws, rules and regulations provide certain shareholder protection standards
The secondary listing applicant would also need to demonstrate that it is controlled by a single corporate WVR beneficiary, or a group of corporate beneficiaries acting in concert, controlling at least 30% of the total shareholder votes.This paves the way for Tencent Music (TME US) and iQIYI Inc (IQ US), among others, to pursue a secondary listing on the HKEX (388 HK). 

Conclusions of the Corporate WVR Consultation: Small Changes for Now

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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.

Equity Bottom-Up

<ul>
<li>Xiaomi (1810)’s global shipment increased 42% YoY in 3Q20.</li>
<li>The Cyberspace Administration plans to pass a law of live broadcaster account classification.</li>
<li>JD.com (JD) has the largest market share of online fresh food.</li>
<li>Alibaba Health (241 HK)’s profit turned positive.</li>
</ul>


Xiaomi (1810)’s global shipment increased 42% YoY in 3Q20.
The Cyberspace Administration plans to pass a law of live broadcaster account classification.
JD.com (JD) has the largest market share of online fresh food.
Alibaba Health (241 HK)’s profit turned positive.


China Internet Weekly (2Nov2020):  Xiaomi Phone Shipment up 42%, New Live Broadcast Law Coming

<ul class="">
<li>Central government media announced that there was a virtual casino running on Douyu (DOYU).</li>
<li>Last year, other media announced Huya (HUYA) has the same illegal gambling problem.</li>
<li>We believe the authorities will start to investigate gambling on all live broadcast platforms.</li>
</ul>


Central government media announced that there was a virtual casino running on Douyu (DOYU).
Last year, other media announced Huya (HUYA) has the same illegal gambling problem.
We believe the authorities will start to investigate gambling on all live broadcast platforms.


Tencent (700 HK): Illegal Gambling Risk in Merger of Huya and Douyu

<ul>
<li>Management reduced shareholding in Tencent (700 HK).</li>
<li>Funds withdrew from game developers such as 37 Interactive (002555 CN).</li>
<li>Huya (HUYA) and Douyu (DOYU) merged in the way we expected in April.</li>
<li>Delivered parcels increased 28% YoY in 1~3Q20.</li>
</ul>


Management reduced shareholding in Tencent (700 HK).
Funds withdrew from game developers such as 37 Interactive (002555 CN).
Huya (HUYA) and Douyu (DOYU) merged in the way we expected in April.
Delivered parcels increased 28% YoY in 1~3Q20.


China Internet Weekly (19Oct20): Tencent Mgt Reduced Shares, HUYA & DOYU Merged in Our Expected Way

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

The announcement of the merger ratio for Huya and Douyu came yesterday with Huya offering 7.3 of it’s A shares per share of Douyu in turn implying a ratio of 0.73 Huya ADS per Douyu ADS. Concurrent with the merger will be the assignment of Tencent’s Penguin e-Sports to Douyu for $500m creating a dominant player within China’s game streaming and esports markets.

The announcement of the merger ratio for Huya and Douyu came yesterday with Huya offering 7.3 of it’s A shares per share of Douyu in turn implying a ratio of 0.73 Huya ADS per Douyu ADS. Concurrent with the merger will be the assignment of Tencent’s Penguin e-Sports to Douyu for $500m creating a dominant player within China’s game streaming and esports markets.

Huya – Generous for Douyu and the New Global Streaming Landscape Gets Interesting

United States

HUYA Inc. operates as a game live streaming platform. The Company offers interactive video broadcast services including e-sports, music, reality show, entertainment genres, talent shows, and anime and outdoor activities. HUYA serves customers in China.

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HUYA (HUYA US)

Conclusions of the Corporate WVR Consultation: Small Changes for Now

The HKEX has published the conclusions of the consultation on corporate WVR beneficiaries. There are no major changes, but the proposed changes...

Brian Freitas

China Internet Weekly (2Nov2020): Xiaomi Phone Shipment up 42%, New Live Broadcast Law Coming

Xiaomi ’s global shipment up 42% YoY in 3Q20. The Cyberspace Administration plans to pass a law of live broadcaster account classification. JD.com...

Ming Lu

Tencent (700 HK): Illegal Gambling Risk in Merger of Huya and Douyu

Central government media released a virtual casino on Douyu. Last year, other media released Huya has the same illegal gambling problem. We...

Ming Lu

China Internet Weekly (19Oct20): Tencent Mgt Reduced Shares, HUYA & DOYU Merged in Our Expected Way

News about online games. Mgt reduced shares in Tencent. Funds withdrew from game developers such as 37 Interactive. Huya and Douyu merged in the...

Ming Lu

Huya – Generous for Douyu and the New Global Streaming Landscape Gets Interesting

Why the Huya-Douyu ratio is generous to Douyu, the implications of the merger are positive for prospects in the domestic market and unlikely to...

Mio Kato

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