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 Bottom-Up

<ul>
<li>TME reported 4Q2021 results on Monday. Revenue for the quarter decreased 8.7% YoY to RMB7.61bn (vs consensus RMB7.66bn) and reported OP decreased 47.3% YoY to RMB682m (vs consensus RMB1.3bn).</li>
<li>Revenue from Online music services grew single digit (4%) for the first time while revenue from Social Entertainment services dropped further during the quarter.</li>
<li>TME expects its revenues to decline in 2022 as it expects the social entertainment services business to remain under pressure due to competition and regulatory pressure.</li>
</ul>


TME reported 4Q2021 results on Monday. Revenue for the quarter decreased 8.7% YoY to RMB7.61bn (vs consensus RMB7.66bn) and reported OP decreased 47.3% YoY to RMB682m (vs consensus RMB1.3bn).
Revenue from Online music services grew single digit (4%) for the first time while revenue from Social Entertainment services dropped further during the quarter.
TME expects its revenues to decline in 2022 as it expects the social entertainment services business to remain under pressure due to competition and regulatory pressure.


TME 4Q Results: Earnings Continue to Weaken

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>On 8th Mar 2022, Securities Exchange Commission (SEC) added five China ADR names to its provisional list of issuers under the Holding Foreign Companies Accountable Act (HFCAA).</li>
<li>There is nothing new about the list, on 2nd Dec 2021, SEC had issued final amendments to implement the HFCAA which had already spoken about the list and its implications.</li>
<li>In this note, we'll talk about the latest developments its possible timelines and implications.</li>
</ul>


On 8th Mar 2022, Securities Exchange Commission (SEC) added five China ADR names to its provisional list of issuers under the Holding Foreign Companies Accountable Act (HFCAA).
There is nothing new about the list, on 2nd Dec 2021, SEC had issued final amendments to implement the HFCAA which had already spoken about the list and its implications.
In this note, we'll talk about the latest developments its possible timelines and implications.


China ADRs Delisting - SEC Sets the Clock Ticking and Sends China ADRs Tripping

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bilibili-inc" target="_blank" data-smartkarma-citation="entities:26793:1" rel="noopener">Bilibili Inc (BILI US)</a> reported 4Q2021 results last week where revenues increased 50.6% YoY to RMB 5.8bn while operating losses increased to RMB 2bn compared to RMB 903m in 4Q2020.</li>
<li>This marks the lowest YoY growth in top line since 2Q2019. Though all segments experienced YoY growth in revenue, we have observed that the growth is slowing down.</li>
<li>The company also has announced a share buyback of up to US$500m of its ADS over the next 24 months</li>
</ul>



Bilibili Inc (BILI US) reported 4Q2021 results last week where revenues increased 50.6% YoY to RMB 5.8bn while operating losses increased to RMB 2bn compared to RMB 903m in 4Q2020.
This marks the lowest YoY growth in top line since 2Q2019. Though all segments experienced YoY growth in revenue, we have observed that the growth is slowing down.
The company also has announced a share buyback of up to US$500m of its ADS over the next 24 months


Bilibili: All Things Point to Slowdown in Earnings Growth

<ul>
<li>
<a href="https://www.smartkarma.com/entities/iqiyi-inc" target="_blank" data-smartkarma-citation="entities:26755:1" rel="noopener">IQIYI Inc (IQ US)</a> reported 4Q and full-year 2021 results on Tuesday. Revenue for the quarter declined 0.9% YoY to RMB7.39bn (vs consensus RMB7.31bn).</li>
<li>Operating losses for the quarter was RMB975.2m (vs consensus RMB1.33bn), about 13.2% of revenues compared to RMB1.31bn (17.5% of revenues) in 4Q2020.</li>
<li>IQiyi’s ADRs jumped 21.5% at the end of Tuesday’s close as the company mentioned that it expects quarterly non-GAAP operating break-even as soon as possible.</li>
</ul>



IQIYI Inc (IQ US) reported 4Q and full-year 2021 results on Tuesday. Revenue for the quarter declined 0.9% YoY to RMB7.39bn (vs consensus RMB7.31bn).
Operating losses for the quarter was RMB975.2m (vs consensus RMB1.33bn), about 13.2% of revenues compared to RMB1.31bn (17.5% of revenues) in 4Q2020.
IQiyi’s ADRs jumped 21.5% at the end of Tuesday’s close as the company mentioned that it expects quarterly non-GAAP operating break-even as soon as possible.


IQiyi: Huge Drop in Operating Losses Despite Flat Revenues; Path to Profits Becoming Clear

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

<ul>
<li>The paying user base continued growing in 4Q21 and has space to grow further.</li>
<li>Game revenue recovered for the second quarter, as the games launched last year began to earn money.</li>
<li>BILI's advertising revenue grew significantly faster than the market size of Chinese online advertising.</li>
</ul>


The paying user base continued growing in 4Q21 and has space to grow further.
Game revenue recovered for the second quarter, as the games launched last year began to earn money.
BILI's advertising revenue grew significantly faster than the market size of Chinese online advertising.


Bilibili (BILI): 4Q21, Slow Than Expected, But Many Positive Signals

China

Bilibili Inc. provides online entertainment services. The Company offers a platform that covers a wide array of genres and media formats, including videos, live broadcasting, mobile games, animation, and comics. Bilibili serves customers in China.

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Bilibili (BILI US)

TME 4Q Results: Earnings Continue to Weaken

TME's 4Q2021 earnings have further weakened with single-digit growth in online music revenue while social entertainment revenues further decreased...

Shifara Samsudeen, ACMA, CGMA

China ADRs Delisting - SEC Sets the Clock Ticking and Sends China ADRs Tripping

On 8th Mar 2022, Securities Exchange Commission (SEC) added five China ADR names to its provisional list of issuers under the Holding Foreign...

Sumeet Singh

Bilibili: All Things Point to Slowdown in Earnings Growth

Bilibili's share price has declined further since the company’s earnings announcement which suggests that the investors are concerned over...

Shifara Samsudeen, ACMA, CGMA

IQiyi: Huge Drop in Operating Losses Despite Flat Revenues; Path to Profits Becoming Clear

During iQiyi's 4Q2021 earnings call, the company mentioned that it expects quarterly non-GAAP operating breakeven as soon as possible. We discuss...

Shifara Samsudeen, ACMA, CGMA

Bilibili (BILI): 4Q21, Slow Than Expected, But Many Positive Signals

The paying user base continued growing in 4Q21 and has space to grow further. Game revenue recovered for the second quarter. Advertising revenue...

Ming Lu

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