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

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>We believe the new law will slow down the expansion of the lending business related to e-commerce companies.</li>
<li>iQiyi (IQ) announced it would raise the membership fees.</li>
<li>Tencent Music (TME) signed a contract for exclusively using Peer Music’s copyrights in China.</li>
</ul>


We believe the new law will slow down the expansion of the lending business related to e-commerce companies.
iQiyi (IQ) announced it would raise the membership fees.
Tencent Music (TME) signed a contract for exclusively using Peer Music’s copyrights in China.


China Internet Weekly (9Nov2020): New Law on Online Small Amount Lending

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

<p>In the September quarter, revenue growth at <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba Group (BABA US)</a>'s logistics arm CaiNiao Network accelerated sharply, as the unit continued to grow faster than Alibaba, total eCommerce sales, and China's express market.</p><p>How has CaiNiao Network managed to grow so much faster than eCommerce and associated logistics spending, and what does it mean for China's listed express companies?</p><p>In this note we identify likely drivers of CaiNiao's superior sales momentum. We also explain the threat CaiNiao's strength poses to the five express companies in which Alibaba has invested.</p><p>In our view, CaiNiao's growth will make it tougher for commodity-type express companies to breathe. These companies are already under pressure from declining margins and rising CapEx requirements. <a href="https://www.smartkarma.com/entities/maanshan-dingtai-rare-a" target="_blank" data-smartkarma-citation="entities:4128:1" rel="noopener">S.F. Holding (002352 CH)</a>, which operates mostly <em>outside</em> of Alibaba's orbit and is thus insulated from many of these problems, remains the most attractive name in Chinese express, in our opinion, but <a href="https://www.smartkarma.com/entities/best-inc" target="_blank" data-smartkarma-citation="entities:25494:1" rel="noopener">BEST Inc (BEST US)</a> is an interesting play on potential M&amp;A in the sector. </p>

In the September quarter, revenue growth at Alibaba Group (BABA US)'s logistics arm CaiNiao Network accelerated sharply, as the unit continued to grow faster than Alibaba, total eCommerce sales, and China's express market.How has CaiNiao Network managed to grow so much faster than eCommerce and associated logistics spending, and what does it mean for China's listed express companies?In this note we identify likely drivers of CaiNiao's superior sales momentum. We also explain the threat CaiNiao's strength poses to the five express companies in which Alibaba has invested.In our view, CaiNiao's growth will make it tougher for commodity-type express companies to breathe. These companies are already under pressure from declining margins and rising CapEx requirements. S.F. Holding (002352 CH), which operates mostly outside of Alibaba's orbit and is thus insulated from many of these problems, remains the most attractive name in Chinese express, in our opinion, but BEST Inc (BEST US) is an interesting play on potential M&amp;A in the sector. 

As Growth Accelerates, Alibaba's CaiNiao Network Is Pushing Aside Commodity-Type Express Firms

Chief Economist

Diana Choyleva

Enodo Economics

Enodo Economics is an independent macroeconomic forecasting company that untangles complexity, challenges the consensus, and makes sense of the future. Our focus is on China – one of the most misunderstood economies in the world, but one of the most important to figure out.  Enodo’s chief economist, Diana Choyleva, has been analysing China for almost 20 years, while Enodo’s team boasts a combined 140 years’ experience covering China’s economy, politics and markets. 

Macroeconomics

<h2>China News That Matters</h2><ul>
<li>Don’t over-react, but I’ve a few things to say…</li>
<li>Shanghai hosts one of 2020’s largest events </li>
<li>Self-sufficiency at plenum core</li>
<li>Armed drones to ROC; disruptive tech to PRC</li>
<li>China’s counting too</li>
</ul><div class="content-remarks"><p>In my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.</p></div>

China News That Matters
Don’t over-react, but I’ve a few things to say…
Shanghai hosts one of 2020’s largest events 
Self-sufficiency at plenum core
Armed drones to ROC; disruptive tech to PRC
China’s counting too
In my weekly digest China News That Matters, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and highlight why I think the news is significant. These posts are meant to neither be bullish nor bearish, but help you separate the signal from the noise.

Ant IPO/ Imports/ Plenum/ US-China/ Census

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Equity Capital Markets

New Oriental Education & Techn / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/new-oriental-education-tech-grp-adr" target="_blank" data-smartkarma-citation="entities:531:1" rel="noopener">New Oriental Education (EDU US)</a> raised around US$1.5bn in its secondary listing in Hong Kong.</p></div><div><p>I have covered the background of the deal in my earlier insight, <a href="https://www.smartkarma.com/insights/new-oriental-hong-kong-secondary-might-be-relatively-small" target="_blank" rel="noopener">New Oriental Hong Kong Secondary - Might Be Relatively Small.</a></p></div><div><p>In this note, I'll talk about the deal dynamics and updates over the past week.</p></div>

New Oriental Education (EDU US) raised around US$1.5bn in its secondary listing in Hong Kong.I have covered the background of the deal in my earlier insight, New Oriental Hong Kong Secondary - Might Be Relatively Small.In this note, I'll talk about the deal dynamics and updates over the past week.

New Oriental Hong Kong Secondary Trading - Largest ADR/HK Listing Premium Yet

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN 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

PT Surya Citra Media Tbk / Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/surya-citra-media-pt-tbk" target="_blank" data-smartkarma-citation="entities:14739:1" rel="noopener">PT Surya Citra Media Tbk (SCMA IJ)</a> published a very respectable set of results this week, with positive signs of recovery on TV advertising and strong growth in its digital efforts through Vidio.com.</p>
<p>A major highlight was a marked improvement in margins, as the company saw significantly reduced programming costs over the period due to an increased reliance on re-runs. </p>
<p>FMCG customers have come back in 3Q2020 and will also underpin growth in 4Q2020 but the resumption of profitable sponsored programming, often interactive, from e-commerce players will help to further lift growth in advertising.</p>
<p>Vidio.com is firing on all cylinders, with 950,000 paying subscribers and 60m monthly active users (MAUs), with the draw of SCMA's rich content offering drawing in customers. </p>
<p><a href="https://www.smartkarma.com/entities/surya-citra-media-pt-tbk" target="_blank" data-smartkarma-citation="entities:14739:1" rel="noopener">PT Surya Citra Media Tbk (SCMA IJ)</a> remains a high-quality way to play the recovery in the advertising market, with a significant recovery already underway. This is underpinned by both FMCG customers as well as e-commerce companies, which have big marketing budgets. Vidio.com goes from strength to strength and looks increasingly able to stand alone without bringing in a strategic investor. The company still looks attractive on an FY21E PER of 17.8x versus its 5-year average of 19.1x, especially given its increasing digital exposure through Vidio.com.</p>

PT Surya Citra Media Tbk (SCMA IJ) published a very respectable set of results this week, with positive signs of recovery on TV advertising and strong growth in its digital efforts through Vidio.com.
A major highlight was a marked improvement in margins, as the company saw significantly reduced programming costs over the period due to an increased reliance on re-runs. 
FMCG customers have come back in 3Q2020 and will also underpin growth in 4Q2020 but the resumption of profitable sponsored programming, often interactive, from e-commerce players will help to further lift growth in advertising.
Vidio.com is firing on all cylinders, with 950,000 paying subscribers and 60m monthly active users (MAUs), with the draw of SCMA's rich content offering drawing in customers. 
PT Surya Citra Media Tbk (SCMA IJ) remains a high-quality way to play the recovery in the advertising market, with a significant recovery already underway. This is underpinned by both FMCG customers as well as e-commerce companies, which have big marketing budgets. Vidio.com goes from strength to strength and looks increasingly able to stand alone without bringing in a strategic investor. The company still looks attractive on an FY21E PER of 17.8x versus its 5-year average of 19.1x, especially given its increasing digital exposure through Vidio.com.

PT Surya Citra Media Tbk (SCMA IJ) - Let the Games Begin

China

Alibaba Group Holding Limited provides online sales services. The Company provides internet infrastructure, electronic commerce, online financial, and internet content services through its subsidiaries. Alibaba Group Holding offers its products and services worldwide.

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Alibaba Group Holding (9988 HK)

China Internet Weekly (9Nov2020): New Law on Online Small Amount Lending

We believe the new law will slow down the expansion of online lending. iQiyi raised the membership fees. Tencent Music signed an exclusive contract...

Ming Lu

As Growth Accelerates, Alibaba's CaiNiao Network Is Pushing Aside Commodity-Type Express Firms

Amid a price war in China's express sector, the dramatic growth of Alibaba's logistics arm CaiNiao Network is adding to existing pressure on most...

Tracking Traffic

Ant IPO/ Imports/ Plenum/ US-China/ Census

In my weekly digest, I will give you selected summaries, sourced from a variety of local Chinese-language and international news outlets, and...

Diana Choyleva

New Oriental Hong Kong Secondary Trading - Largest ADR/HK Listing Premium Yet

New Oriental Education (EDU US) raised US$1.5bn in its secondary listing. I have covered the background of the deal in my earlier note. In this...

Sumeet Singh

PT Surya Citra Media Tbk (SCMA IJ) - Let the Games Begin

SCMA remains a high-quality way to play the recovery in the advertising market, with an increasingly digital twist through Vidio.com

Angus Mackintosh

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