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>Hellobike, an Alibaba’s investee and traffic source, will go public in 2Q21.</li>
<li>NetEase’s Cloud Music is seeking IPO next year.</li>
<li>The authorities said Tencent and Baidu were fined not because they eliminate competition, but because they forgot to ask for approval.</li>
<li>Tencent invests in Rakuten.</li>
</ul>


Hellobike, an Alibaba’s investee and traffic source, will go public in 2Q21.
NetEase’s Cloud Music is seeking IPO next year.
The authorities said Tencent and Baidu were fined not because they eliminate competition, but because they forgot to ask for approval.
Tencent invests in Rakuten.


China Internet Weekly (Mar 15): BABA & NTES Subsidiaries Seek IPO, Tencent Invests in Rakuten

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

Zhihu Technology / Equity Capital Markets

<div>
<a href="https://www.smartkarma.com/entities/zhihu-technology-ltd" target="_blank" data-smartkarma-citation="entities:32185:1" rel="noopener">Zhihu Technology (ZH US)</a> is the largest Q&amp;A-inspired online community and one of the top five comprehensive online content communities in China, both in terms of average mobile MAUs and revenue in 2020, according to CIC. Zhihu is acknowledged as the first choice among all online content communities in China where people look for information to make decisions or find answers, according to CIC. Zhihu is backed 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>, <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a> and <a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a>.
<div class="content-highlight">Zhihu is pre-marketing an NYSE IPO to raise proceeds of $1 billion, according to press reports. In <a href="https://www.smartkarma.com/insights/zhihu-ipo-initiation-question-time" target="_blank" data-smartkarma-citation="insights:48928" rel="noopener">Zhihu IPO Initiation: Question Time</a>, we opined that as the largest Q&amp;A-inspired online community, Zhihu is well-positioned to benefit from favourable industry trends. We concluded that Zhihu’s fundamentals are attractive. In this note, we present our forecasts and take the first look at Zhihu's potential valuation. </div>
</div>


Zhihu Technology (ZH US) is the largest Q&amp;A-inspired online community and one of the top five comprehensive online content communities in China, both in terms of average mobile MAUs and revenue in 2020, according to CIC. Zhihu is acknowledged as the first choice among all online content communities in China where people look for information to make decisions or find answers, according to CIC. Zhihu is backed by Tencent Holdings (700 HK), Kuaishou Technology (1024 HK) and Baidu (BIDU US).
Zhihu is pre-marketing an NYSE IPO to raise proceeds of $1 billion, according to press reports. In Zhihu IPO Initiation: Question Time, we opined that as the largest Q&amp;A-inspired online community, Zhihu is well-positioned to benefit from favourable industry trends. We concluded that Zhihu’s fundamentals are attractive. In this note, we present our forecasts and take the first look at Zhihu's potential valuation. 


Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

<div><a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a> plans to raise around US$3bn in its secondary listing in Hong Kong. I have covered most aspects of the deal in my earlier note, <a href="https://www.smartkarma.com/insights/baidu-secondary-listing-early-look-will-be-one-of-the-largest-secondary-listings-this-year" target="_blank" rel="noopener">Baidu Secondary Listing Early Look - Will Be One of the Largest Secondary Listings This Year</a>.</div><div>In this note, I'll only touch upon the updates since my last note.</div>

Baidu (BIDU US) plans to raise around US$3bn in its secondary listing in Hong Kong. I have covered most aspects of the deal in my earlier note, Baidu Secondary Listing Early Look - Will Be One of the Largest Secondary Listings This Year.In this note, I'll only touch upon the updates since my last note.

Baidu Secondary Listing - Smaller than Expected, Doing the Bare Minimum

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Thematic (Sector/Industry)

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.  Companies mentioned this week:<a href="https://www.smartkarma.com/entities/petroleo-brasileiro-sa-5cbcae17-0673-48c8-b792-98cd7ec49fb7" target="_blank" data-smartkarma-citation="entities:22692:1" rel="noopener">Petroleo Brasileiro (PBR US)</a>, <a href="https://www.smartkarma.com/entities/weibo-corp-adr" target="_blank" data-smartkarma-citation="entities:3826:1" rel="noopener">Weibo Corp (Adr) (WB US)</a>, <a href="https://www.smartkarma.com/entities/suning-commerce-group-co-a" target="_blank" data-smartkarma-citation="entities:9178:1" rel="noopener">Suning Commerce Group Co A (002024 CH)</a>

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.  Companies mentioned this week:Petroleo Brasileiro (PBR US), Weibo Corp (Adr) (WB US), Suning Commerce Group Co A (002024 CH)

Global Emerging Markets Weekly: 26 February 2021

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Back on the 6 July last year, <a href="https://www.smartkarma.com/entities/sina-corp-china" target="_blank" data-smartkarma-citation="entities:22691:1" rel="noopener">Sina Corp (Class A) (SINA US)</a> <a href="http://ir.sina.com/index.php/static-files/69e95aee-2729-457f-be56-73628090b8ea" target="_blank" rel="noopener">announced</a> the receipt of a preliminary non-binding “going private” proposal from New Wave MMXV - a company controlled by its chairman/CEO Charles Chao - at US$41/share. This was followed by an <a href="http://ir.sina.com/static-files/de1ddd0f-354f-42de-9b33-b1bc414ab1b4" target="_blank" rel="noopener">Agreement and Plan of Merger</a> pursuant to which New Wave will acquire all of the outstanding ordinary shares not owned at US$43.30/share.
Despite an undemanding Offer price, shareholders approved (93.6% of the total votes) the merger on the <a href="http://ir.sina.com/static-files/ea4a5614-30e8-472c-895c-31e120de3261" target="_blank" rel="noopener">23 December</a>.
Completion of the merger was contingent on the satisfaction or waiver of the closing conditions set forth in the Merger Agreement, including no more than 10% of the ordinary shares dissenting.
Prior to the  EGM, <a href="http://ir.sina.com/static-files/722deb54-0426-4b43-a58a-1c8be8b59b61" target="_blank" rel="noopener">21.5mn shares or 35.9%</a> of the total issued and outstanding shares of Sina issued notices of objections to the company. 
On or prior to January 12, 2021, Sina intended to issue written notices of authorization to all the objecting shareholders. Within 20 days immediately after the date on which these notices were given, any objecting shareholder was required to give written notice of its decision to dissent.
There has been no update on the merger from Sina since the 28 December. Behind the scenes, Charles Chao can choose to walk, negotiate a superior price with dissentient shareholders, or waive the condition.  Should he waive the condition, dissentient shareholders have the right to be paid fair value for their shares, as determined by the Cayman Island's Grand Court.
More below the fold.<a href="https://www.collascrill.com/news-updates/articles/grand-court-confirms-that-dissent-rights-are-available-to-minority-shareholders-in-short-form-mergers/" target="_blank" rel="noopener"></a>

Back on the 6 July last year, Sina Corp (Class A) (SINA US) announced the receipt of a preliminary non-binding “going private” proposal from New Wave MMXV - a company controlled by its chairman/CEO Charles Chao - at US$41/share. This was followed by an Agreement and Plan of Merger pursuant to which New Wave will acquire all of the outstanding ordinary shares not owned at US$43.30/share.
Despite an undemanding Offer price, shareholders approved (93.6% of the total votes) the merger on the 23 December.
Completion of the merger was contingent on the satisfaction or waiver of the closing conditions set forth in the Merger Agreement, including no more than 10% of the ordinary shares dissenting.
Prior to the  EGM, 21.5mn shares or 35.9% of the total issued and outstanding shares of Sina issued notices of objections to the company. 
On or prior to January 12, 2021, Sina intended to issue written notices of authorization to all the objecting shareholders. Within 20 days immediately after the date on which these notices were given, any objecting shareholder was required to give written notice of its decision to dissent.
There has been no update on the merger from Sina since the 28 December. Behind the scenes, Charles Chao can choose to walk, negotiate a superior price with dissentient shareholders, or waive the condition.  Should he waive the condition, dissentient shareholders have the right to be paid fair value for their shares, as determined by the Cayman Island's Grand Court.
More below the fold.

China

JOYY Inc. operates a global social media platform. The Company offers platform which enables users to interact with each other in real time through online live media by creating, sharing, and enjoying a vast range of entertainment content and activities. JOYY serves customers in China.

Beijing TRS Information Technology Company Limited develops and markets software and technology services for unstructured data management. The Company provides software products that are enterprise search, content management and text mining.

Focus Technology Co Ltd. provides business-to-business (B2B) e-commerce solutions. The Company provides the supply and the demand sides for the release, search and management services of the transaction information.

Hangzhou Shunwang Technology Co., Ltd. develops and sells Internet entertainment networking platforms.  The Company's products provide safety management, system maintenance service, and entertainment content update service.

Hangzhou Shunwang Technology A (300113 CH)

Shanghai Ganglian E-Commerce Holdings Company Limited provides market information and B2B e-commerce services for steel and steel-related industries. The Company provides market information, research services and also offers business promotion to customers.

Hubei Century Network Technology Co. Ltd. provides internet content and service aggregation platforms. The Company delivers music, games, and other related products.

INESA Intelligent Tech Inc. operates in the IT industry. The Company designs and manages cloud servers and big data applications for businesses. INESA Intelligent also manufactures electronic components.

Longmaster Information & Technology Company Limited provides community-based phonic value-added services. The Company's main product is a large-scale telephone phonic social and entertainment platform.

Longmaster Information&Technology (300288 CH)

21Vianet Group, Inc. provides carrier-neutral Internet data center services. The Company hosts its customers' servers and networking equipment, as well as provides interconnectivity and managed network services to enable customers to deliver data across the Internet. 21Vianet conducts business in Beijing, China.

Beijing Sinnet Technology Company Limited provides customers with broadband access services, IDC and its value-added services, and other internet integrated services. The Company's core business are broadband access services, IDC and its value-added services.

mixi, Inc. operates community style website, mixi.  The Company sells advertising spaces on its website.  mixi also runs online recruiting services for IT related positions.

DeNA Co., Ltd. operates social media site, auction and shopping web site such as Mobage-town and Bidders.  DeNA also provides mobile-related services such as mobile game and community site.

Gogo Inc. provides in-flight connectivity systems and services. The Company offers online aircraft systems, wireless digital entertainment and other services in the commercial and business aviation markets.

Shutterstock Inc. operates a global marketplace for commercial digital imagery. The Company's online marketplace provides a freely searchable library of commercial digital images that our users can pay to license, download and incorporate into their work.

SMS CO.,LTD. is a website operator regarding elderly care.  On its websites, the company provides a variety of information contents related to employment placements for senior care assistants and doctors, as well as medical and nursing qualifications.

Megaport Limited operates as a software-based elastic connectivity provider. The Company develops an elastic connectivity platform that provides customers interconnectivity and flexibility between other networks and cloud providers connected to the platform. Megaport serves customers worldwide.

Cars.com Inc. operates an online automotive platform. The Company offers new and used vehicle listings, expert and consumer reviews, research tools, and other information which helps shoppers to buy, sell, and service their vehicles. Cars.com serves customers in the United States.

SUNeVision Holdings Limited, through its subsidiaries, operates Internet services centers and Information Technology (IT) facilities.  The Company also designs and installs SMATV, structural cabling and security systems as well as provides system development, solutions, and management services.  In addition, Sunevision invests in properties.

QuinStreet Inc. specializes in vertical marketing and media on the Internet. The Company focuses on clients in the education and financial services industries, as well as has a presence in the home services, business-to-business, or B2B, and healthcare industries.

Just Dial Ltd. operates a local search engine that provides comprehensive updated information. The Company offers a search engine that includes a variety of categories such as movies, hotels and resorts, taxis and car rentals, insurance, bars, and nightclubs. Just Dial markets its search engine to users throughout India.

Weibo Corp is a social media platform for people to create, distribute and discover Chinese-language content.  The Company offers users public self-expression in real time with a powerful platform for social interaction, as well as content aggregation and distribution.

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Weibo Corp (WB US)

China Internet Weekly (Mar 15): BABA & NTES Subsidiaries Seek IPO, Tencent Invests in Rakuten

Tencent was fined not because they eliminate competition, but because they forgot to ask for approval. Tencent invests in Rakuten. Hellobike and...

Ming Lu

Zhihu IPO: Valuation First Look

Zhihu is pre-marketing an NYSE IPO to raise proceeds of $1 billion, according to press reports. In this note, we present our forecasts and take the...

Arun George

Baidu Secondary Listing - Smaller than Expected, Doing the Bare Minimum

Baidu plans to raise around US$3bn in its secondary listing in Hong Kong. I have covered most aspects of the deal in my earlier note. In this note,...

Sumeet Singh

Global Emerging Markets Weekly: 26 February 2021

This insight provides a summary of the key news developments impacting the largest countries and constituents of the Global Emerging Markets equity...

Wium Malan, CFA

What's Going On With Sina Corp?

Currently trading to terms. This is an avoid. The Offer is being done too cheaply, But unless you have already dissented, you are effectively...

David Blennerhassett

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