Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

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.

Equity Capital Markets

<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>  is the leading online music entertainment platform in China offering online music, online karaoke, and music-centric live streaming services. It has been reported by several news media outlets that TME is planning for a secondary listing in Hong Kong and could raise as much as US$5bn through the secondary listing. The company went public through an IPO in 2018 on the New York Stock Exchange.This is the First of a series of reports on Tencent Music Entertainment (TME), where we will be deep diving into the company’s business model, its segments and revenues.

Tencent Music (TME US)  is the leading online music entertainment platform in China offering online music, online karaoke, and music-centric live streaming services. It has been reported by several news media outlets that TME is planning for a secondary listing in Hong Kong and could raise as much as US$5bn through the secondary listing. The company went public through an IPO in 2018 on the New York Stock Exchange.This is the First of a series of reports on Tencent Music Entertainment (TME), where we will be deep diving into the company’s business model, its segments and revenues.

TME Secondary Listing: Monetisation Efforts in Social Entertainment Should Boost Top Line Growth

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.

Autohome Inc (Adr) / Equity Capital Markets

Autohome plans to raise around US$1bn in its secondary listing in Hong Kong. The company is said to have filed confidentially in Jan 2021 and won approval from HKEX last week.<div>Including Baba, so far ten companies have undertaken a secondary listing in Hong Kong, raising a total of US$28bn with a range of US$0.5-11.4bn. Along with covering all of the past listings, we have also looked at the drivers for the secondary listings in our earlier notes, links to which are below: </div><div>
<ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/china-adrs-secondary-listing-deep-dive-yin-and-yang" target="_blank" rel="noopener">China ADRs Secondary Listing Deep-Dive: Yin and Yang,</a> published in Feb 2020,  we looked at the background and rules around undertaking a secondary listing in Hong Kong and then came up with a short-list of companies that might undertake a secondary listing. </li>
<li>
<a href="https://www.smartkarma.com/insights/china-adrs-secondary-listing-covid-19-has-increased-the-tension-but-narrowed-the-short-list" target="_blank" rel="noopener">In China ADRs Secondary Listing: COVID-19 Has Increased the Tension but Narrowed the Short List</a> published in May 2020, we looked at the recent developments and provided an revised short-list</li>
<li>In <a href="https://www.smartkarma.com/insights/china-adrs-secondary-listing-holding-foreign-companies-accountable-act-i-m-coming-home" target="_blank" rel="noopener">China ADRs Secondary Listing - Holding Foreign Companies Accountable Act - I’m Coming Home</a>, published in May 2020, we spoke about the implication of the act which had made its way through the senate.</li>
<li>In <a href="https://www.smartkarma.com/insights/china-adrs-secondary-listing-pipeline-looks-rich-have-three-years-to-move" target="_blank" rel="noopener">China ADRs Secondary Listing - Pipeline looks rich, have three years to move</a>, published in Feb 2021, we looked at the recent updates from the Holding Foreign Companies Accountable Act and Hong Kong Exchanges changes to corporate weighted average voting rights. In this note, we’ll take an early look at the deal and talk about likely timing and impact of the raising.</li>
</ul>
In this note, we’ll take a look at the deal and talk about the likely impact of the raising.
</div>

Autohome plans to raise around US$1bn in its secondary listing in Hong Kong. The company is said to have filed confidentially in Jan 2021 and won approval from HKEX last week.Including Baba, so far ten companies have undertaken a secondary listing in Hong Kong, raising a total of US$28bn with a range of US$0.5-11.4bn. Along with covering all of the past listings, we have also looked at the drivers for the secondary listings in our earlier notes, links to which are below: 


China ADRs Secondary Listing Deep-Dive: Yin and Yang, published in Feb 2020,  we looked at the background and rules around undertaking a secondary listing in Hong Kong and then came up with a short-list of companies that might undertake a secondary listing. 

In China ADRs Secondary Listing: COVID-19 Has Increased the Tension but Narrowed the Short List published in May 2020, we looked at the recent developments and provided an revised short-list
In China ADRs Secondary Listing - Holding Foreign Companies Accountable Act - I’m Coming Home, published in May 2020, we spoke about the implication of the act which had made its way through the senate.
In China ADRs Secondary Listing - Pipeline looks rich, have three years to move, published in Feb 2021, we looked at the recent updates from the Holding Foreign Companies Accountable Act and Hong Kong Exchanges changes to corporate weighted average voting rights. In this note, we’ll take an early look at the deal and talk about likely timing and impact of the raising.

In this note, we’ll take a look at the deal and talk about the likely impact of the raising.


Autohome Secondary Listing - Doesn’t Need the Cash at All

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

Equity Bottom-Up

<ul>
<li>Online karaoke’ active users decreased by 31% and the time on site decreased by 13%<a target="_blank"> in China</a>.</li>
<li>Music per capita time on site plunged sharply by 26% in China.</li>
<li>Monthly active users of TME’s top app shrank.</li>
<li>China Mobile’s music app is freely using TME’s copyrights.</li>
</ul>


Online karaoke’ active users decreased by 31% and the time on site decreased by 13% in China.
Music per capita time on site plunged sharply by 26% in China.
Monthly active users of TME’s top app shrank.
China Mobile’s music app is freely using TME’s copyrights.


Tencent Music (TME): Less Attractive than Other Entertainments

Insight Provider, CrossASEAN Research

Nicolas Van Broekhoven

Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Since 2017 we have written various insights on <a href="https://www.smartkarma.com/entities/vivendi-sa" target="_blank" data-smartkarma-citation="entities:21076:1" rel="noopener">Vivendi SA (VIV FP) and Chairman Bollore.</a><a href="https://www.smartkarma.com/insights/vivendi-coming-ipo-of-universal-music-group-umg-gives-best-exposure-to-growth-in-streaming-music" target="_blank" data-smartkarma-citation="insights:14102" rel="noopener">Vivendi: Coming IPO of Universal Music Group (UMG) Gives Best Exposure to Growth in Streaming Music</a> in October 2017<a href="https://www.smartkarma.com/insights/vivendi-50-trade-sale-of-universal-music-will-receive-strong-interest-17-2-2022-is-coming-closer" target="_blank" data-smartkarma-citation="insights:24640" rel="noopener">Vivendi: 50%Trade Sale of Universal Music Will Receive Strong Interest; 17/2/2022 Is Coming Closer</a> in October 2018<a href="https://www.smartkarma.com/insights/vivendi-viv-fp-equity-all-about-umg-bet-on-vincent-bollore-to-create-maximum-value-by-17-02-22" target="_blank" data-smartkarma-citation="insights:33243" rel="noopener">Vivendi (VIV FP Equity): All About UMG. Bet on Vincent Bollore to Create Maximum Value by 17/02/22</a> in October 2019The crown jewel of Vivendi has been UMG and news over the weekend has come out that 60% of UMG will be listed in Amsterdam. Recall, 20% of UMG is already owned by <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a> which increased its stake from 10% to 20% in late December 2020. The remaining 20% will stay with Vivendi.Vivendi's share price rallied 19.6% on the news and as it is digested all eyes should now be on 17/02/2022. This is the official retirement date of Vincent Bollore. As we have predicted over the years (see previous insights) he will want to leave the group on a high note.We, therefore, expect more value-enhancing moves for Vivendi shareholders by Vincent Bollore. Vivendi remains a solid large-cap European story with anticipation for UMG's IPO surely building in 2Q and 3Q. The question that has been posed since 2017 remains the same: would you rather own <a href="https://www.smartkarma.com/entities/spotify-technology-sa" target="_blank" data-smartkarma-citation="entities:26772:1" rel="noopener">Spotify Technology SA (SPOT US)</a> (65 billion USD market cap), which is the distributor of music, OR would you rather own the largest music catalog owner?Our bet is that once this understanding gets out in the market valuation expectations for UMG will be ramped up aggressively from the minimum 30 billion EUR valuation. Over the coming six months Wall Street banks will be falling over each other to help investors understand the opportunity we have been writing about since 2017. Better late than never.

Since 2017 we have written various insights on Vivendi SA (VIV FP) and Chairman Bollore.Vivendi: Coming IPO of Universal Music Group (UMG) Gives Best Exposure to Growth in Streaming Music in October 2017Vivendi: 50%Trade Sale of Universal Music Will Receive Strong Interest; 17/2/2022 Is Coming Closer in October 2018Vivendi (VIV FP Equity): All About UMG. Bet on Vincent Bollore to Create Maximum Value by 17/02/22 in October 2019The crown jewel of Vivendi has been UMG and news over the weekend has come out that 60% of UMG will be listed in Amsterdam. Recall, 20% of UMG is already owned by Tencent Holdings (700 HK) which increased its stake from 10% to 20% in late December 2020. The remaining 20% will stay with Vivendi.Vivendi's share price rallied 19.6% on the news and as it is digested all eyes should now be on 17/02/2022. This is the official retirement date of Vincent Bollore. As we have predicted over the years (see previous insights) he will want to leave the group on a high note.We, therefore, expect more value-enhancing moves for Vivendi shareholders by Vincent Bollore. Vivendi remains a solid large-cap European story with anticipation for UMG's IPO surely building in 2Q and 3Q. The question that has been posed since 2017 remains the same: would you rather own Spotify Technology SA (SPOT US) (65 billion USD market cap), which is the distributor of music, OR would you rather own the largest music catalog owner?Our bet is that once this understanding gets out in the market valuation expectations for UMG will be ramped up aggressively from the minimum 30 billion EUR valuation. Over the coming six months Wall Street banks will be falling over each other to help investors understand the opportunity we have been writing about since 2017. Better late than never.

Vivendi: IPO of UMG Late '21 to Benefit Tencent; Still Watching 17/02/22 For Final Bollore Fireworks

Bairong, an independent AI-powered technology platform in China serving the financial services industry, plans to raise around US$300m in its Hong Kong IPO. According to F&amp;S, it was the largest independent financial big data analytics solutions provider in China by revenue in 2019, with a market share of 8.7%.Bairong has three main revenue generating segments: data analytics services, precision marketing services and insurance distribution services. As of FY19, data analytics accounted for 41.4% of revenue, with the next largest segment being precision marketing at 32.1% of revenue and insurance distribution making up for the rest.Over 2017-19, Bairong’s revenue expanded by 3.56x or at 88.8% CAGR. While its data analytics revenue increased by 66% over the period, its precision marketing services revenue grew 22.6x, and insurance distribution grew 54.5x. Over the same time, gross profit grew 3.99x and adjusted EBITDA, PAT and OCF all turned positive during that period.In this insight, I'll talk about the positive aspects of the deal.

Bairong, an independent AI-powered technology platform in China serving the financial services industry, plans to raise around US$300m in its Hong Kong IPO. According to F&amp;S, it was the largest independent financial big data analytics solutions provider in China by revenue in 2019, with a market share of 8.7%.Bairong has three main revenue generating segments: data analytics services, precision marketing services and insurance distribution services. As of FY19, data analytics accounted for 41.4% of revenue, with the next largest segment being precision marketing at 32.1% of revenue and insurance distribution making up for the rest.Over 2017-19, Bairong’s revenue expanded by 3.56x or at 88.8% CAGR. While its data analytics revenue increased by 66% over the period, its precision marketing services revenue grew 22.6x, and insurance distribution grew 54.5x. Over the same time, gross profit grew 3.99x and adjusted EBITDA, PAT and OCF all turned positive during that period.In this insight, I'll talk about the positive aspects of the deal. 

Bairong Pre-IPO - The Positives - Largest Independent Big-Data Analytics Provider

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)

Autohome Secondary Listing - Doesn’t Need the Cash at All

Autohome plans to raise around US$1bn in its secondary listing in Hong Kong. The company is said to have filed confidentially in Jan 2021 and won...

Sumeet Singh

Tencent Music (TME): Less Attractive than Other Entertainments

Online karaoke and online music plunged in China. Monthly active users of TME’s top app shrank. China Mobile’s music app is freely using TME’s...

Ming Lu

Vivendi: IPO of UMG Late '21 to Benefit Tencent; Still Watching 17/02/22 For Final Bollore Fireworks

Vivendi popped 19.6% as plans for a listing of UMG on the Amsterdam exchange were announced. With Vincent Bollore's retirement coming up, expect...

Nicolas Van Broekhoven

Bairong Pre-IPO - The Positives - Largest Independent Big-Data Analytics Provider

Bairong, an independent AI-powered technology platform in China serving the financial services industry, plans to raise around US$300m in its Hong...

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

TME Secondary Listing: Monetisation Efforts in Social Entertainment Should Boost Top Line Growth

This is the First of a series of reports on Tencent Music Entertainment (TME), where we will be deep diving into the company’s business model, its...

Shifara Samsudeen, ACMA, CGMA

Autohome Secondary Listing - Doesn’t Need the Cash at All

Autohome plans to raise around US$1bn in its secondary listing in Hong Kong. The company is said to have filed confidentially in Jan 2021 and won...

Sumeet Singh

Tencent Music (TME): Less Attractive than Other Entertainments

Online karaoke and online music plunged in China. Monthly active users of TME’s top app shrank. China Mobile’s music app is freely using TME’s...

Ming Lu

Vivendi: IPO of UMG Late '21 to Benefit Tencent; Still Watching 17/02/22 For Final Bollore Fireworks

Vivendi popped 19.6% as plans for a listing of UMG on the Amsterdam exchange were announced. With Vincent Bollore's retirement coming up, expect...

Nicolas Van Broekhoven

Bairong Pre-IPO - The Positives - Largest Independent Big-Data Analytics Provider

Bairong, an independent AI-powered technology platform in China serving the financial services industry, plans to raise around US$300m in its Hong...

Sumeet Singh