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.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/robosense-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:39903:1" rel="noopener">Robosense Technology (2498 HK)</a> raised around US$126m in its Hong Kong IPO in Jan 2024. The lockup on its shareholders will expire soon.</li>
<li>The company provides LiDAR and perception solutions to its customers. As of March 2024, it had design wins for mass production of LiDAR products with 22 automotive OEMs and suppliers.</li>
<li>In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.</li>
</ul>



Robosense Technology (2498 HK) raised around US$126m in its Hong Kong IPO in Jan 2024. The lockup on its shareholders will expire soon.
The company provides LiDAR and perception solutions to its customers. As of March 2024, it had design wins for mass production of LiDAR products with 22 automotive OEMs and suppliers.
In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.


Robosense IPO Lock-Up Expiry - US$2.8bn Lockup Expiry for 99% of the Stock, CCASS Movement

China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>TME reported in-line results with continued divergence in its two major businesses: Online music increased by 48% YoY, while social entertainment declined by 25% YoY.</li>
<li>We expect these trends to continue, with online music benefiting from price increases and social entertainment facing ongoing challenges from competition, regulations, and macro influences.</li>
<li>Recently, Douyin has been advancing the integration of its large entertainment division. We anticipate that this will pose pressure on TME. Remain SELL and cut TP to US$ 5.7.</li>
</ul>


TME reported in-line results with continued divergence in its two major businesses: Online music increased by 48% YoY, while social entertainment declined by 25% YoY.
We expect these trends to continue, with online music benefiting from price increases and social entertainment facing ongoing challenges from competition, regulations, and macro influences.
Recently, Douyin has been advancing the integration of its large entertainment division. We anticipate that this will pose pressure on TME. Remain SELL and cut TP to US$ 5.7.


[Tencent Music (TME US, SELL, TP US$5.7) TP Change]: Competition Remains the Biggest Downward Factor

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>TME announced 2Q23 financial results on 15 Aug. Total revenue grew by 5.5% YoY and 4.0% QoQ to RMB7.3bn in 2Q23, in line with CMBI/consensus estimate of RMB7.2/7.3bn.</li><li>Non-IFRS net income was up 48.6% YoY to RMB1.5bn in 2Q23, also in line with CMBI/consensus estimate.</li><li>Its online music revenue growth was ahead of consensus expectations by 8% due to solid music subscription growth and ad business recovery; but its social entertainment revenue was 12% below consensus due to TME’s risk control measures implemented in 2Q23. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

TME announced 2Q23 financial results on 15 Aug. Total revenue grew by 5.5% YoY and 4.0% QoQ to RMB7.3bn in 2Q23, in line with CMBI/consensus estimate of RMB7.2/7.3bn.Non-IFRS net income was up 48.6% YoY to RMB1.5bn in 2Q23, also in line with CMBI/consensus estimate.Its online music revenue growth was ahead of consensus expectations by 8% due to solid music subscription growth and ad business recovery; but its social entertainment revenue was 12% below consensus due to TME’s risk control measures implemented in 2Q23. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

TME (TME US) – Improving profitability despite pressure on social entertainment business

<ul><li>TME will report its 2Q23 results on 15 August.</li><li>We expect 2Q23 total revenue to grow 4% YoY to RMB7.2bn (3% below consensus), mainly due to enhanced live streaming procedures started in late 2Q and its subsequent impact to TME’s social entertainment revenue.</li><li>But online music business continues to remain on track of progressive growth, driven by the robust subscription business and recovery of ads business. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

TME will report its 2Q23 results on 15 August.We expect 2Q23 total revenue to grow 4% YoY to RMB7.2bn (3% below consensus), mainly due to enhanced live streaming procedures started in late 2Q and its subsequent impact to TME’s social entertainment revenue.But online music business continues to remain on track of progressive growth, driven by the robust subscription business and recovery of ads business. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

TME (TME US) – Solid Earnings Growth Despite Social Entertainment Business Adjustment

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

<ul>
<li>We expect that Tencent’s C3Q23’s revenue/non-IFRS operating profit/IFRS net income to be 2.3%/3.3%/4.2% above consensus.</li>
<li>We raised estimates of Tencent’s international game growth to 12% YoY to reflect the success. We also expect Tencent's advertising business to benefit from e-commerce advertisers’ competition.</li>
<li>We raised the Target Price to HK$425, which implies 22.4X PE in 2024.</li>
</ul>


We expect that Tencent’s C3Q23’s revenue/non-IFRS operating profit/IFRS net income to be 2.3%/3.3%/4.2% above consensus.
We raised estimates of Tencent’s international game growth to 12% YoY to reflect the success. We also expect Tencent's advertising business to benefit from e-commerce advertisers’ competition.
We raised the Target Price to HK$425, which implies 22.4X PE in 2024.


[Tencent(700 HK,BUY,TP HK$425)Target Price Change]: International Game and Advertising Drove Results

China

Tencent Music Entertainment operates an online music entertainment platform in China. The Company offers platform that comprises of online music, recording, music-centric live streaming enabling users to discover, listen, sing, watch, perform, and socialize music.

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Tencent Music (TME US)

Robosense IPO Lock-Up Expiry - US$2.8bn Lockup Expiry for 99% of the Stock, CCASS Movement

The pre-IPO shareholders came out of lockup today, leading to a 67% drop in the share price with an accompanying spike in volumes.

Sumeet Singh