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 Capital Markets

<ul>
<li>XIMA has a dominant market share based on monthly active users and time on site.</li>
<li>However, one small competitor is owned by Byte Dance and another is owned by Tencent Music.</li>
<li>We conclude that competition still exists.</li>
</ul>
<p>Also see <a href="https://www.smartkarma.com/insights/ximalaya-pre-ipo-peer-comparison" target="_blank" data-smartkarma-citation="insights:51324" rel="noopener">Ximalaya Pre-IPO - Peer Comparison</a>, <a href="https://www.smartkarma.com/insights/ximalaya-pre-ipo-the-negatives" target="_blank" data-smartkarma-citation="insights:51143" rel="noopener">Ximalaya Pre-IPO - The Negatives</a> , and <a href="https://www.smartkarma.com/insights/ximalaya-pre-ipo-the-positives-a-whole-lot-of-listening" target="_blank" data-smartkarma-citation="insights:51096" rel="noopener">Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening</a> by <a href="https://www.smartkarma.com/profiles/sumeet-singh" target="_blank" data-smartkarma-citation="accounts:4" rel="noopener">Sumeet Singh</a>. </p>


XIMA has a dominant market share based on monthly active users and time on site.
However, one small competitor is owned by Byte Dance and another is owned by Tencent Music.
We conclude that competition still exists.

Also see Ximalaya Pre-IPO - Peer Comparison, Ximalaya Pre-IPO - The Negatives , and Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening by Sumeet Singh. 

Ximalaya (XIMA): Has Large Market Share, But Small Competitors Have Big Bosses.

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.

<p><a href="https://www.smartkarma.com/entities/ximalaya-inc" target="_blank" data-smartkarma-citation="entities:33232:1" rel="noopener">Ximalaya (XIMA US)</a> is the largest online audio platform in China as measured by average MAUs (monthly active users), total mobile listening time, and total revenues in 2020, according to CIC. Ximalaya also has the largest audio content library and the most audio content creators in China. <br>Ximalaya is backed by <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> (5.4% of outstanding shares), <a href="https://www.smartkarma.com/entities/tal-education-group" target="_blank" data-smartkarma-citation="entities:1124:1" rel="noopener">TAL Education (TAL US)</a> and Sony Music Entertainment. Ximalaya has filed for an NYSE IPO to raise proceeds of $0.5-1.0 billion, according to press reports. </p><p>China is the world’s largest online audio market in terms of the number of online audio users. However, the number of mobile online audio MAUs (monthly active users) in China accounted for only 16.1% of total mobile Internet MAUs in 2020, according to CIC. China’s online audio market in terms of revenue is forecasted to grow from RMB13.1 billion in 2020 to RMB120.1 billion by 2025, representing a CAGR of 55.8%, according to CIC.</p><div class="content-highlight">
<p>At first glance, Ximalaya is well-positioned to benefit from this sizeable market opportunity. The strong user engagement, fast-paced revenue growth and declining loss margin suggest that Ximalaya is heading in the right direction. However, a closer look reveals concerning developments on several fronts.</p>
<p><a href="https://www.smartkarma.com/entities/lizhi-inc" target="_blank" data-smartkarma-citation="entities:28396:1" rel="noopener">Lizhi Inc (LIZI US)</a>, a peer, is trading around 50% below its IPO price which suggests that investors are not overly enthused by plays on the China online audio market. With sentiment on Chinese US listings weakening, we think that the negatives in the Ximalaya story warrant a pass.  </p>
</div>

Ximalaya (XIMA US) is the largest online audio platform in China as measured by average MAUs (monthly active users), total mobile listening time, and total revenues in 2020, according to CIC. Ximalaya also has the largest audio content library and the most audio content creators in China.  Ximalaya is backed by Tencent (700 HK) (5.4% of outstanding shares), TAL Education (TAL US) and Sony Music Entertainment. Ximalaya has filed for an NYSE IPO to raise proceeds of $0.5-1.0 billion, according to press reports. China is the world’s largest online audio market in terms of the number of online audio users. However, the number of mobile online audio MAUs (monthly active users) in China accounted for only 16.1% of total mobile Internet MAUs in 2020, according to CIC. China’s online audio market in terms of revenue is forecasted to grow from RMB13.1 billion in 2020 to RMB120.1 billion by 2025, representing a CAGR of 55.8%, according to CIC.
At first glance, Ximalaya is well-positioned to benefit from this sizeable market opportunity. The strong user engagement, fast-paced revenue growth and declining loss margin suggest that Ximalaya is heading in the right direction. However, a closer look reveals concerning developments on several fronts.
Lizhi Inc (LIZI US), a peer, is trading around 50% below its IPO price which suggests that investors are not overly enthused by plays on the China online audio market. With sentiment on Chinese US listings weakening, we think that the negatives in the Ximalaya story warrant a pass.  


Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

<div><p><a href="https://www.smartkarma.com/entities/ximalaya-inc" target="_blank" data-smartkarma-citation="entities:33232:1" rel="noopener">Ximalaya (XIMA US)</a>, the largest online audio platform in China, is looking to raise around US$1bn in its US listing. </p></div><div>
<p>As of 1Q21, it had 250m average MAUs, which included 104m mobile MAUs through its apps and 146m MAUs through internet-of-things (IoT) and other third-party platforms. As per CIC, it accounted for 75% of total mobile listening time among all online audio platforms in China. It had 5.2m active content creators in 2020.</p>
<p>In our previous note,<a href="https://www.smartkarma.com/insights/ximalaya-pre-ipo-the-positives-a-whole-lot-of-listening" target="_blank" rel="noopener"> Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening</a>, we covered the positive aspects of the deal.</p>
</div><div><p>In this note, we will talk about the not so pleasant aspects of the deal.</p></div>

Ximalaya (XIMA US), the largest online audio platform in China, is looking to raise around US$1bn in its US listing. 
As of 1Q21, it had 250m average MAUs, which included 104m mobile MAUs through its apps and 146m MAUs through internet-of-things (IoT) and other third-party platforms. As per CIC, it accounted for 75% of total mobile listening time among all online audio platforms in China. It had 5.2m active content creators in 2020.
In our previous note, Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening, we covered the positive aspects of the deal.
In this note, we will talk about the not so pleasant aspects of the deal.

<p><a href="https://www.smartkarma.com/entities/ximalaya-inc" target="_blank" data-smartkarma-citation="entities:33232:1" rel="noopener">Ximalaya (XIMA US)</a>, the largest online audio platform in China, is looking to raise around US$1bn in its US listing. </p><p>As of 1Q21, it had 250m average MAUs, which included 104m mobile MAUs through its apps and 146m MAUs through internet-of-things (IoT) and other third-party platforms. As per CIC, it accounted for 75% of total mobile listening time among all online audio platforms in China. It had 5.2m active content creators in 2020.</p><p>In this note, we will talk about the positive aspects of the deal.</p>

Ximalaya (XIMA US), the largest online audio platform in China, is looking to raise around US$1bn in its US listing. As of 1Q21, it had 250m average MAUs, which included 104m mobile MAUs through its apps and 146m MAUs through internet-of-things (IoT) and other third-party platforms. As per CIC, it accounted for 75% of total mobile listening time among all online audio platforms in China. It had 5.2m active content creators in 2020.In this note, we will talk about the positive aspects of the deal.

Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening

<div><p><a href="https://www.smartkarma.com/entities/waterdrop-inc" target="_blank" data-smartkarma-citation="entities:33018:1" rel="noopener">Waterdrop Inc (WDH US)</a> is the largest independent third-party insurance platform in China as measured by life and health insurance first-year premiums (FYP) distributed in 2020, according to iResearch. Waterdrop 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>, <a href="https://www.smartkarma.com/entities/swiss-re-ag-1f83dcbc-730e-46fa-82f2-bfe7e8e361a1" target="_blank" data-smartkarma-citation="entities:27914:1" rel="noopener">Swiss Re AG (SREN SW)</a> and <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>.</p></div><div><p>At the mid-point of the proposed IPO price range of $10.00-12.00 per ADS, Waterdrop will have a market cap of $4.3 billion. At the mid-point of the IPO price range, the net proceeds are $301.6 million. New and existing shareholders have indicated on $210 million of the IPO, including Boyu Capital ($100 million), HOPU Investments (at least $80 million), and Kevin Sunny Holding ($30 million). The indications of interest represent 63.6% of the ADSs on offer at the mid-point of the IPO price range.</p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/waterdrop-ipo-initiation-going-for-brokers" target="_blank" data-smartkarma-citation="insights:50610" rel="noopener">Waterdrop IPO Initiation: Going for Brokers</a>, we opined that as a leading online third-party insurance broker, Waterdrop is well-positioned to benefit from favourable industry trends. The key unknown is whether the changing regulations will throw a spanner in the works. Notwithstanding the regulatory overhang, we concluded that Waterdrop is worth a look. Our analysis suggests that the IPO price range is full at the high-end but has some upside at the low-end. </p></div></div></div>

Waterdrop Inc (WDH US) is the largest independent third-party insurance platform in China as measured by life and health insurance first-year premiums (FYP) distributed in 2020, according to iResearch. Waterdrop is backed by Tencent Holdings (700 HK), Swiss Re AG (SREN SW) and Meituan (3690 HK).At the mid-point of the proposed IPO price range of $10.00-12.00 per ADS, Waterdrop will have a market cap of $4.3 billion. At the mid-point of the IPO price range, the net proceeds are $301.6 million. New and existing shareholders have indicated on $210 million of the IPO, including Boyu Capital ($100 million), HOPU Investments (at least $80 million), and Kevin Sunny Holding ($30 million). The indications of interest represent 63.6% of the ADSs on offer at the mid-point of the IPO price range.In Waterdrop IPO Initiation: Going for Brokers, we opined that as a leading online third-party insurance broker, Waterdrop is well-positioned to benefit from favourable industry trends. The key unknown is whether the changing regulations will throw a spanner in the works. Notwithstanding the regulatory overhang, we concluded that Waterdrop is worth a look. Our analysis suggests that the IPO price range is full at the high-end but has some upside at the low-end. 

China

iQIYI, Inc. offers video entertainment services. The Company provides movies, television dramas, variety shows, and other video contents. iQIYI offers services worldwide.

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iQIYI Inc (IQ US)

Ximalaya IPO Initiation: Out of Tune

At first glance, Ximalaya is well-positioned to benefit from the sizeable China online audio market opportunity. However, a closer look reveals...

Arun George

Ximalaya Pre-IPO - The Negatives

Ximalaya (XIMA US), the largest online audio platform in China, is looking to raise around US$1bn in its US listing. In this note, we will talk...

Sumeet Singh

Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening

Ximalaya (XIMA US), the largest online audio platform in China, is looking to raise around US$1bn in its US listing. In this note, we'll talk about...

Sumeet Singh

Waterdrop IPO: Valuation Insights

Waterdrop has launched its IPO to raise net proceeds of $301.6 million at the mid-point of the price range of $10-12. The price range is full at...

Arun George

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Ximalaya (XIMA): Has Large Market Share, But Small Competitors Have Big Bosses.

XIMA has a dominant market share based on monthly active users and time on site. However, one small competitor is owned by Byte Dance and another...

Ming Lu

Ximalaya IPO Initiation: Out of Tune

At first glance, Ximalaya is well-positioned to benefit from the sizeable China online audio market opportunity. However, a closer look reveals...

Arun George

Ximalaya Pre-IPO - The Negatives

Ximalaya (XIMA US), the largest online audio platform in China, is looking to raise around US$1bn in its US listing. In this note, we will talk...

Sumeet Singh

Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening

Ximalaya (XIMA US), the largest online audio platform in China, is looking to raise around US$1bn in its US listing. In this note, we'll talk about...

Sumeet Singh

Waterdrop IPO: Valuation Insights

Waterdrop has launched its IPO to raise net proceeds of $301.6 million at the mid-point of the price range of $10-12. The price range is full at...

Arun George