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

Yatsen Holding Ltd / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/yatsen-holding-ltd" target="_blank" data-smartkarma-citation="entities:29719:1" rel="noopener">Yatsen Holding (YSG US)</a> , the owner of the Perfect Diary cosmetic and skin-care brand in China has set the terms for its IPO. The company has set an indicative IPO price range of US$8.5-10.5 per ADS, and at the midpoint of the IPO price of US$9.50 per ADS, the company will raise net proceeds of US$521.5m.<table class="table table-striped"><tbody>
<tr><td colspan="2" style="width: 256.0pt;">Yatsen Holding IPO Details</td></tr>
<tr>
<td style="width: 165.65pt;">No. of ADSs Issued</td>
<td style="width: 90.35pt;">58,750,000</td>
</tr>
<tr>
<td style="width: 165.65pt;">Ordinary Shares per ADS</td>
<td style="width: 90.35pt;">4</td>
</tr>
<tr>
<td style="width: 165.65pt;">Shares Outstanding Post IPO (m)</td>
<td style="width: 90.35pt;">2,662</td>
</tr>
<tr>
<td style="width: 165.65pt;">Offer as a % of Outstanding Shares</td>
<td style="width: 90.35pt;">8.83%</td>
</tr>
<tr>
<td style="width: 165.65pt;">Price per ADS (US$)</td>
<td style="width: 90.35pt;">8.50-10.50</td>
</tr>
<tr>
<td style="width: 165.65pt;">Net Proceeds from IPO (US$m)</td>
<td style="width: 90.35pt;">521.5</td>
</tr>
<tr>
<td style="width: 165.65pt;">Market Capitalisation (US$m)</td>
<td style="width: 90.35pt;">                  6,322.07</td>
</tr>
<tr>
<td style="width: 165.65pt;">Enterprise Value (US$m)</td>
<td style="width: 90.35pt;">                  5,514.20</td>
</tr>
</tbody></table><div class="content-caption">Source: Company Disclosures, LSR (Market cap and EV are at the midpoint of the IPO price range, EV is after deducting net cash and net IPO proceeds)</div>The company expects to use the proceeds for pursuing strategic investments and acquisitions, expansion of store network, development of technology and for general corporate purposes.In our previous insight on the company’s IPO, we examined Yatsen’s business model, segments, revenues and margins. Find below an extract from our previous insight:<div class="content-highlight">Having analysed the company’s IPO prospectus, we remain concerned about the company’s future prospects. We believe the company’s attempt to improve its top line comes at the expense of its margins. Though the company reported a 4.7% OPM in 2019, we believe the company will have to continue to incur on selling and marketing expenses in order to survive in the heavily competitive Chinese cosmetics market. In order to reach the iconic success of multi-national cosmetic brands, the company and its other domestic competitors will have to consistently innovate and launch new products to capture market share which we believe will eat into the company’s margins. We would not recommend subscribing for Yatsen’s IPO as we don’t see a clear path to profitability</div>In this insight, we examine the company’s valuation and whether it is attractive enough to compensate for the lack of profitability.

Yatsen Holding (YSG US) , the owner of the Perfect Diary cosmetic and skin-care brand in China has set the terms for its IPO. The company has set an indicative IPO price range of US$8.5-10.5 per ADS, and at the midpoint of the IPO price of US$9.50 per ADS, the company will raise net proceeds of US$521.5m.
Yatsen Holding IPO Details

No. of ADSs Issued
58,750,000


Ordinary Shares per ADS
4


Shares Outstanding Post IPO (m)
2,662


Offer as a % of Outstanding Shares
8.83%


Price per ADS (US$)
8.50-10.50


Net Proceeds from IPO (US$m)
521.5


Market Capitalisation (US$m)
                  6,322.07


Enterprise Value (US$m)
                  5,514.20

Source: Company Disclosures, LSR (Market cap and EV are at the midpoint of the IPO price range, EV is after deducting net cash and net IPO proceeds)The company expects to use the proceeds for pursuing strategic investments and acquisitions, expansion of store network, development of technology and for general corporate purposes.In our previous insight on the company’s IPO, we examined Yatsen’s business model, segments, revenues and margins. Find below an extract from our previous insight:Having analysed the company’s IPO prospectus, we remain concerned about the company’s future prospects. We believe the company’s attempt to improve its top line comes at the expense of its margins. Though the company reported a 4.7% OPM in 2019, we believe the company will have to continue to incur on selling and marketing expenses in order to survive in the heavily competitive Chinese cosmetics market. In order to reach the iconic success of multi-national cosmetic brands, the company and its other domestic competitors will have to consistently innovate and launch new products to capture market share which we believe will eat into the company’s margins. We would not recommend subscribing for Yatsen’s IPO as we don’t see a clear path to profitabilityIn this insight, we examine the company’s valuation and whether it is attractive enough to compensate for the lack of profitability.

Yatsen Holding IPO: Expensive Valuation Does Not Reflect the Fundamentals

Kuaishou Technology / Equity Capital Markets

ByteDance’s Chinese rival <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Beijing Kuaishou Technology Co Ltd (1496219D CH)</a>  has filed for an IPO to list its shares on the Hong Kong Stock Exchange ahead of its rival Douyin. The company aims to raise up to US$5bn at a rumoured valuation of over US$50bn.Kuaishou’s platform offers its users to create content through short videos and livestreams as well as sell and purchase products. On the other hand, it allows businesses to advertise and sell their products to the users of the platform.China has the world’s largest internet population which accounted for about 23% of mobile internet users globally. The internet users in China have been increasingly spending time on video-based social and entertainment platforms.These short video and live streaming platforms offer monetisation opportunities through virtual gifting and online marketing services. According to iResearch, both virtual gifting and mobile advertising through short videos and livestreaming will grow at a CAGR of 19.9% and 33.7% respectively through 2020-25E.The company generates a majority of its revenues from live streaming (through virtual gifting) however, online marketing services and other services (e-commerce and other services) have been growing at higher rates over the last two years which we believe should drive future growth for Kuaishou.In this insight, we examine the company’s business model, the industry and the revenue channels. We will be covering the company’s financials in detail in a follow-up insight.

ByteDance’s Chinese rival Beijing Kuaishou Technology Co Ltd (1496219D CH)  has filed for an IPO to list its shares on the Hong Kong Stock Exchange ahead of its rival Douyin. The company aims to raise up to US$5bn at a rumoured valuation of over US$50bn.Kuaishou’s platform offers its users to create content through short videos and livestreams as well as sell and purchase products. On the other hand, it allows businesses to advertise and sell their products to the users of the platform.China has the world’s largest internet population which accounted for about 23% of mobile internet users globally. The internet users in China have been increasingly spending time on video-based social and entertainment platforms.These short video and live streaming platforms offer monetisation opportunities through virtual gifting and online marketing services. According to iResearch, both virtual gifting and mobile advertising through short videos and livestreaming will grow at a CAGR of 19.9% and 33.7% respectively through 2020-25E.The company generates a majority of its revenues from live streaming (through virtual gifting) however, online marketing services and other services (e-commerce and other services) have been growing at higher rates over the last two years which we believe should drive future growth for Kuaishou.In this insight, we examine the company’s business model, the industry and the revenue channels. We will be covering the company’s financials in detail in a follow-up insight.

Kuaishou IPO: Advertising and E-Commerce Businesses to Drive Future 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.

<a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Beijing Kuaishou Technology Co Ltd (1496219D CH)</a> (KT) is a content community and social platform. The company 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>, Sequoia China, <a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a>, DST Global, Boyu Capital, Temasek and others. As of six months ended Jun 2020, it had 302m daily active users (DAUs), who spent 85 mins on average on the app every day. It also had 776m monthly active users (MAUs) and total e-commerce GMV of RMB109.6bn. On an average 1.1bn short videos were uploaded on its app during 1H20. As per iResearch, Kuaishou was globally the largest live streaming platform by gross billings from virtual gifting and average live streaming MPUs, the second largest short video platform by average DAUs, and the second largest live streaming e-commerce platform by GMV, over six months ended June 30, 2020.In my earlier note, <a href="https://www.smartkarma.com/insights/kuaishou-technology-pre-ipo-the-positives-hot-segment-fast-growth" target="_blank" rel="noopener">Kuaishou Technology Pre-IPO - The Positives - Hot Segment, fast growth</a>, I spoke about the positive aspects of the deal. In this note, I'll talk about the not so flattering aspects.

Beijing Kuaishou Technology Co Ltd (1496219D CH) (KT) is a content community and social platform. The company is backed by Tencent Holdings (700 HK), Sequoia China, Baidu (BIDU US), DST Global, Boyu Capital, Temasek and others. As of six months ended Jun 2020, it had 302m daily active users (DAUs), who spent 85 mins on average on the app every day. It also had 776m monthly active users (MAUs) and total e-commerce GMV of RMB109.6bn. On an average 1.1bn short videos were uploaded on its app during 1H20. As per iResearch, Kuaishou was globally the largest live streaming platform by gross billings from virtual gifting and average live streaming MPUs, the second largest short video platform by average DAUs, and the second largest live streaming e-commerce platform by GMV, over six months ended June 30, 2020.In my earlier note, Kuaishou Technology Pre-IPO - The Positives - Hot Segment, fast growth, I spoke about the positive aspects of the deal. In this note, I'll talk about the not so flattering aspects.

Kuaishou Technology Pre-IPO - The Negatives - Ample Doubts Remain

<a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Beijing Kuaishou Technology Co Ltd (1496219D CH)</a> (KT) is a content community and social platform. The company 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>, Sequoia China, <a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a>, DST Global, Boyu Capital, Temasek and others. As of six months ended Jun 2020, it had 302m daily active users (DAUs), who spent 85 mins on average on the app every day. It also had 776m monthly active users (MAUs) and total e-commerce GMV of RMB109.6bn. On an average 1.1bn short videos were uploaded on its app during 1H20. As per iResearch, Kuaishou was globally the largest live streaming platform by gross billings from virtual gifting and average live streaming MPUs, the second largest short video platform by average DAUs, and the second largest live streaming e-commerce platform by GMV, over six months ended June 30, 2020.In this note, I'll talk about the positive aspects of the deal.

Beijing Kuaishou Technology Co Ltd (1496219D CH) (KT) is a content community and social platform. The company is backed by Tencent Holdings (700 HK), Sequoia China, Baidu (BIDU US), DST Global, Boyu Capital, Temasek and others. As of six months ended Jun 2020, it had 302m daily active users (DAUs), who spent 85 mins on average on the app every day. It also had 776m monthly active users (MAUs) and total e-commerce GMV of RMB109.6bn. On an average 1.1bn short videos were uploaded on its app during 1H20. As per iResearch, Kuaishou was globally the largest live streaming platform by gross billings from virtual gifting and average live streaming MPUs, the second largest short video platform by average DAUs, and the second largest live streaming e-commerce platform by GMV, over six months ended June 30, 2020.In this note, I'll talk about the positive aspects of the deal.

Kuaishou Technology Pre-IPO - The Positives - Hot Segment, Fast Growth

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.

<a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Beijing Kuaishou Technology Co Ltd (1496219D CH)</a> is the second-largest short video platform by average DAUs (daily active users) in 1H20, according to iResearch. Users access the platform primarily through a family of mobile apps comprising Kuaishou Flagship, Kuaishou Express and Kuaishou Concept, which is collectively referred to as the Kuaishou App. Kuaishou 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> (21.57% shareholder), Morningside Venture Capital, DCM Capital (9.23%), <a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a> (3.78%), Sequoia Capital (3.20%), Boyu Capital (2.29%) and Temasek (0.86%). In January 2020, Kuaishou raised $3 billion through a Series F round at a valuation of $28 billion, according to press reports. Kuaishou has filed for a Hong Kong IPO to raise up to $5 billion as early as January 2021, according to Reuters. <div class="content-highlight">As a key competitor to <a href="https://www.smartkarma.com/entities/bytedance-technology" target="_blank" data-smartkarma-citation="entities:27936:1" rel="noopener">ByteDance (1460967D CH)</a>’s Douyin, Kuaishou offers public market investors the first opportunity to gain direct exposure to China’s short-video platform market. While Kuaishou’s performance over the track record period is distorted due to various factors, we believe that the underlying fundamentals are attractive.</div>

Beijing Kuaishou Technology Co Ltd (1496219D CH) is the second-largest short video platform by average DAUs (daily active users) in 1H20, according to iResearch. Users access the platform primarily through a family of mobile apps comprising Kuaishou Flagship, Kuaishou Express and Kuaishou Concept, which is collectively referred to as the Kuaishou App. Kuaishou is backed by Tencent Holdings (700 HK) (21.57% shareholder), Morningside Venture Capital, DCM Capital (9.23%), Baidu (BIDU US) (3.78%), Sequoia Capital (3.20%), Boyu Capital (2.29%) and Temasek (0.86%). In January 2020, Kuaishou raised $3 billion through a Series F round at a valuation of $28 billion, according to press reports. Kuaishou has filed for a Hong Kong IPO to raise up to $5 billion as early as January 2021, according to Reuters. As a key competitor to ByteDance (1460967D CH)’s Douyin, Kuaishou offers public market investors the first opportunity to gain direct exposure to China’s short-video platform market. While Kuaishou’s performance over the track record period is distorted due to various factors, we believe that the underlying fundamentals are attractive.

Kuaishou IPO Initiation: Dancing to Its Own Tune

China

Kuaishou Technology operates as a content community and social platform. The Company helps users create, upload and watch short videos on mobile devices. Kuaishou Technology offers services worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Kuaishou Technology (1024 HK)

Yatsen Holding IPO: Expensive Valuation Does Not Reflect the Fundamentals

Yatsen Holdings, the owner of the Perfect Diary cosmetic and skin-care brand in China has set the terms for its IPO and will raise net proceeds of...

Shifara Samsudeen, ACMA, CGMA

Kuaishou IPO: Advertising and E-Commerce Businesses to Drive Future Growth

ByteDance’s Chinese rival Kuaishou Technology has filed for an IPO to list its shares on the HKEX at a rumoured valuation of over US$50bn.

Shifara Samsudeen, ACMA, CGMA

Kuaishou Technology Pre-IPO - The Negatives - Ample Doubts Remain

Kuaishou Technology is a content community and social platform. The company is backed by Tencent Holdings (700 HK), Sequoia China, Baidu (BIDU US),...

Sumeet Singh

Kuaishou Technology Pre-IPO - The Positives - Hot Segment, Fast Growth

Kuaishou Technology is a content community and social platform. The company is backed by Tencent Holdings (700 HK), Sequoia China, Baidu (BIDU US),...

Sumeet Singh

Kuaishou IPO Initiation: Dancing to Its Own Tune

Kuaishou is a key competitor to ByteDance’s Douyin. While Kuaishou’s performance is distorted due to various factors, we believe that the...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)