Asia Ex-J Consumer/ Transport analyst

Valerie Law, CFA

Thematic (Sector/Industry)

Zhangyue Technologies, the creators of IReader app, is filing to list on the A-share market. The timing to list coincides with another major player <a href="https://www.smartkarma.com/entities/24388" target="_blank" data-smartkarma-citation="entities:24388:1">China Literature Ltd (1522280D HK)</a>, which we covered in an earlier piece <a href="https://www.smartkarma.com/insights/china-literature-ipo-preview-time-to-monetize-its-rich-content-library" target="_blank" data-smartkarma-citation="insights:12582">China Literature IPO Preview: Time to Monetize Its Rich Content Library</a>.In order to watch the duel for online readers between these major players, we needed to compare their swordsplay (ie. business model) and cross-reference some industry growth figures. The sections in this article are as follows:<ol><li>Brief company background</li><li>A comparison with China Literature's business model</li><li>Cross referencing industry growth and both companies' market positions</li><li>A comparison of user metrics and financial overview</li><li>Concluding thoughts</li></ol>

Zhangyue Technologies, the creators of IReader app, is filing to list on the A-share market. The timing to list coincides with another major player China Literature Ltd (1522280D HK), which we covered in an earlier piece China Literature IPO Preview: Time to Monetize Its Rich Content Library.In order to watch the duel for online readers between these major players, we needed to compare their swordsplay (ie. business model) and cross-reference some industry growth figures. The sections in this article are as follows:Brief company backgroundA comparison with China Literature's business modelCross referencing industry growth and both companies' market positionsA comparison of user metrics and financial overviewConcluding thoughts

China Literature Vs Zhangyue IPO: A Duel Between Crouching Tiger and Hidden Dragon?

Equity Capital Markets

China Literature / Equity Capital Markets

China Literature (CHLIT), an online publisher of literary works in China, is seeking a HK-listing. It operates in the digital media space and contends with publishing heavyweights such as <a href="https://www.smartkarma.com/entities/530" target="_blank" data-smartkarma-citation="entities:530:1">Phoenix New Media Ltd Adr (FENG US)</a> , <a href="https://www.smartkarma.com/entities/17285" target="_blank" data-smartkarma-citation="entities:17285:1">China South Publishing A (601098 CH)</a> and Amazon's Kindle. Despite having a database for 72% of total literary works in China on their platforms, the company only managed to report a profit in FY16 helped by some non-core gains. If channel stickiness persists on their platforms and those on Tencent's (main shareholder), monetization of content will become easier over time.   The deal size is estimated to be USD 800m with a valuation of  ~ USD 2bn according to a <a href="http://www.reuters.com/article/us-tencent-holdings-china-literature-ipo-idUSKBN19P0ER" target="_blank">Reuters report</a>. News sources also quoted <a href="https://www.smartkarma.com/entities/26" target="_blank" data-smartkarma-citation="entities:26:1">Tencent Holdings Ltd (700 HK)</a> having plans to hold at least 50% in the company after the spinoff. In this article, we will provide the company background and brief history, followed by some early thoughts on the following questions: 1. What was the company’s growth track record?2. How will the company grow near-term?3. What are some operational risks to consider?4. How are other players faring?5. At what valuations should CHLIT trade?

China Literature (CHLIT), an online publisher of literary works in China, is seeking a HK-listing. It operates in the digital media space and contends with publishing heavyweights such as Phoenix New Media Ltd Adr (FENG US) , China South Publishing A (601098 CH) and Amazon's Kindle. Despite having a database for 72% of total literary works in China on their platforms, the company only managed to report a profit in FY16 helped by some non-core gains. If channel stickiness persists on their platforms and those on Tencent's (main shareholder), monetization of content will become easier over time.   The deal size is estimated to be USD 800m with a valuation of  ~ USD 2bn according to a Reuters report. News sources also quoted Tencent Holdings Ltd (700 HK) having plans to hold at least 50% in the company after the spinoff. In this article, we will provide the company background and brief history, followed by some early thoughts on the following questions:  1. What was the company’s growth track record?2. How will the company grow near-term?3. What are some operational risks to consider?4. How are other players faring?5. At what valuations should CHLIT trade?

China Literature IPO Preview: Time to Monetize Its Rich Content Library

China

China Literature is the largest online literature platform in China

Price Gauge
52-week Range	0.00 - 0.00
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China Literature (772 HK)

China Literature Vs Zhangyue IPO: A Duel Between Crouching Tiger and Hidden Dragon?

Zhangyue Technologies, the creators of IReader app, is filing to list on the A-share market. The timing to list coincides with another major player...

Valerie Law, CFA

China Literature IPO Preview: Time to Monetize Its Rich Content Library

China Literature (CHLIT), an online publisher of literary works in China, is seeking a HK-listing. It operates in the digital media space and...

Valerie Law, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)