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 class="">
<li>The real main business, social entertainment, continued to recover in 3Q20.</li>
<li>Music, as the nominal main business, is facing a mature market.</li>
<li>TME’s largest entertainment platform, Kugou, stopped paying basic salary to live broadcasters; therefore, we believe the margins will prove in 2021.</li>
<li>The downside has narrowed from 28% to 2%. We believe the stock is fairly valued now.</li>
</ul>


The real main business, social entertainment, continued to recover in 3Q20.
Music, as the nominal main business, is facing a mature market.
TME’s largest entertainment platform, Kugou, stopped paying basic salary to live broadcasters; therefore, we believe the margins will prove in 2021.
The downside has narrowed from 28% to 2%. We believe the stock is fairly valued now.


Tencent Music (TME): Real Main Business Continued to Recover in 3Q20, Downside Has Narrowed

<ul>
<li>Xiaomi (1810)’s global shipment increased 42% YoY in 3Q20.</li>
<li>The Cyberspace Administration plans to pass a law of <em>live broadcaster account classification</em>.</li>
<li>JD.com (JD) has the largest market share of online fresh food.</li>
<li>Alibaba Health (241 HK)’s profit turned positive.</li>
</ul>


Xiaomi (1810)’s global shipment increased 42% YoY in 3Q20.
The Cyberspace Administration plans to pass a law of live broadcaster account classification.
JD.com (JD) has the largest market share of online fresh food.
Alibaba Health (241 HK)’s profit turned positive.


China Internet Weekly (2Nov2020):  Xiaomi Phone Shipment up 42%, New Live Broadcast Law Coming

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

<p><a href="https://www.smartkarma.com/entities/yalla-group-ltd" target="_blank" data-smartkarma-citation="entities:29286:1" rel="noopener">Yalla Group Ltd (YALA US)</a> is the largest voice-centric social networking and entertainment platform in MENA as measured by revenue in 2019, according to Frost &amp; Sullivan. The flagship mobile application, <em>Yalla</em>, allows users to spend their leisure time in casual chats. <em>Yalla Ludo</em> enables users to play simple board games that are highly popular in MENA, such as Ludo and Domino. Yalla has filed for an NYSE IPO to raise $100 million. </p><div class="content-highlight"><p>Yalla is a play on the significant demand-supply imbalance for online social networking and entertainment options in MENA. The imbalance is in part due to only a few online social networking and entertainment platforms localising their Arabic user interfaces for MENA culture. Localised appeal enables platforms to build a highly loyal and engaged user community. Overall, we think that Yalla has appealing fundamentals.</p></div>

Yalla Group Ltd (YALA US) is the largest voice-centric social networking and entertainment platform in MENA as measured by revenue in 2019, according to Frost &amp; Sullivan. The flagship mobile application, Yalla, allows users to spend their leisure time in casual chats. Yalla Ludo enables users to play simple board games that are highly popular in MENA, such as Ludo and Domino. Yalla has filed for an NYSE IPO to raise $100 million. Yalla is a play on the significant demand-supply imbalance for online social networking and entertainment options in MENA. The imbalance is in part due to only a few online social networking and entertainment platforms localising their Arabic user interfaces for MENA culture. Localised appeal enables platforms to build a highly loyal and engaged user community. Overall, we think that Yalla has appealing fundamentals.

Yalla Group IPO Initiation: Eat, Pray, Chat

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>Alibaba (BABA) reopened the Freshippo store where an employee tested positive of coronavirus.</li>
<li>Alibaba (BABA) will raise its stake in YTO (600233 CN) from 10.5% to 22.5%.</li>
<li>India banned Tencent (700 HK)’s game, PUBG Mobile Lite.</li>
<li>GSX Edutech (GSX)’s revenue increased by 367% YoY in 2Q20.</li>
</ul>


Alibaba (BABA) reopened the Freshippo store where an employee tested positive of coronavirus.
Alibaba (BABA) will raise its stake in YTO (600233 CN) from 10.5% to 22.5%.
India banned Tencent (700 HK)’s game, PUBG Mobile Lite.
GSX Edutech (GSX)’s revenue increased by 367% YoY in 2Q20.


China Internet Weekly (7Sep2020): BABA Re-Opened Freshippo Stores, India Banned Tencent’s Top Game

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

Thematic (Sector/Industry)

<div class="content-highlight"><h2>Huya Merger News Propels Stock Upwards; Tencent Gains Subdued from Rising US-China Tensions</h2></div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/153/594/original/China%20Portfolio%20Performance.png?1597832603" class="editor-image img-responsive" data-smartkarma-image-id="153594"></figure><p>The months of July and August saw a broad level rise in prices across our entire China tech portfolio. While companies like Huya and Niu outperformed the MSCI China and NASDAQ indices, companies like Tencent remained relatively subdued given rising US-China tensions on mobile app bans.</p><p>We observe that China Tech companies appear to be looking inwards for growth - focusing more on domestic opportunities while the international regulatory outlook remains uncertain.</p><p>We provide updated views on each of our portfolio companies below:</p>

Huya Merger News Propels Stock Upwards; Tencent Gains Subdued from Rising US-China TensionsThe months of July and August saw a broad level rise in prices across our entire China tech portfolio. While companies like Huya and Niu outperformed the MSCI China and NASDAQ indices, companies like Tencent remained relatively subdued given rising US-China tensions on mobile app bans.We observe that China Tech companies appear to be looking inwards for growth - focusing more on domestic opportunities while the international regulatory outlook remains uncertain.We provide updated views on each of our portfolio companies below:

Our Tech Portfolio Update: Capitalizing on Domestic Opportunities Amidst Heightened US-China Tension

China

Hello Group Inc. operates as a mobile-based social networking platform. The Company enables users to establish and expand social relationships based on location and interests. Hello Group operates out of the Peoples Republic of China.

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

Hello Group (MOMO US)

Tencent Music (TME): Real Main Business Continued to Recover in 3Q20, Downside Has Narrowed

The real main business, social entertainment, continued to recover in 3Q20. Music, as the nominal main business, is facing a mature market. The...

Ming Lu

China Internet Weekly (2Nov2020): Xiaomi Phone Shipment up 42%, New Live Broadcast Law Coming

Xiaomi ’s global shipment up 42% YoY in 3Q20. The Cyberspace Administration plans to pass a law of live broadcaster account classification. JD.com...

Ming Lu

Yalla Group IPO Initiation: Eat, Pray, Chat

$ is the largest voice-centric social networking and entertainment platform in MENA as measured by revenue in 2019, according to the Frost &...

Arun George

China Internet Weekly (7Sep2020): BABA Re-Opened Freshippo Stores, India Banned Tencent’s Top Game

Alibaba (BABA) reopened the Freshippo store where an employee tested positive of coronavirus. Alibaba (BABA) will raise its stake in YTO (600233...

Ming Lu

Our Tech Portfolio Update: Capitalizing on Domestic Opportunities Amidst Heightened US-China Tension

Huya Merger News Propels Stock Upwards; Tencent Gains Subdued from Rising US-China TensionsThe months of July and August saw a broad level rise in...

Vincent Fernando, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)