Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Equity Bottom-Up

Since my last detailed look at <a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a>’s valuation back in September last year (<a href="https://www.smartkarma.com/insights/baidu-strategies-for-operating-in-an-industry-in-decline" target="_blank" data-smartkarma-citation="insights:43393" rel="noopener">Baidu: Strategies for Operating in an Industry in Decline</a>) Baidu’s share price has witnessed a meteoric rise of 170%, re-rating from 6.2x to 16.9x NTM EV/EBITDA.This has been driven by several catalysts, such as M&amp;A into live streaming, increased share buybacks, the continued prospect of a Hong Kong listing, and improved reported earnings, but most-of-all, by their announcement that they plan to start an intelligent electric vehicle company in strategic partnership with <a href="https://www.smartkarma.com/entities/geely-automobile-holdings-ltd" target="_blank" data-smartkarma-citation="entities:127:1" rel="noopener">Geely Auto (175 HK)</a>. Following their recent 4Q20 results, management also went to great lengths to highlight the revenue growth acceleration in their “Non-marketing Baidu Core” sub-segment, emphasising the shift away from their traditional Core Search Advertising, or mobile ecosystem, to diversify revenue streams. In this insight, I take a closer look at this sub-segment and analyse what the current market value implies for those operations, as well as their future “intelligent electric vehicle” venture.

Since my last detailed look at Baidu (BIDU US)’s valuation back in September last year (Baidu: Strategies for Operating in an Industry in Decline) Baidu’s share price has witnessed a meteoric rise of 170%, re-rating from 6.2x to 16.9x NTM EV/EBITDA.This has been driven by several catalysts, such as M&amp;A into live streaming, increased share buybacks, the continued prospect of a Hong Kong listing, and improved reported earnings, but most-of-all, by their announcement that they plan to start an intelligent electric vehicle company in strategic partnership with Geely Auto (175 HK). Following their recent 4Q20 results, management also went to great lengths to highlight the revenue growth acceleration in their “Non-marketing Baidu Core” sub-segment, emphasising the shift away from their traditional Core Search Advertising, or mobile ecosystem, to diversify revenue streams. In this insight, I take a closer look at this sub-segment and analyse what the current market value implies for those operations, as well as their future “intelligent electric vehicle” venture.

Baidu: A Closer Look at Non-Marketing Baidu Core. What Are We Paying for EV?

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.

<ul>
<li>Baidu (BIDU), iQiyi (IQ), Trip.com (TCOM), and Autohome (ATHM) got negative industry data for the whole year of 2020.</li>
<li>A Meituan delivery worker appeared in a Freshippo store, but Meituan should be a major competitor of Freshippo’s related party, Ele.me.</li>
</ul>


Baidu (BIDU), iQiyi (IQ), Trip.com (TCOM), and Autohome (ATHM) got negative industry data for the whole year of 2020.
A Meituan delivery worker appeared in a Freshippo store, but Meituan should be a major competitor of Freshippo’s related party, Ele.me.


China Internet Weekly (15Feb2021): Meituan Employee Showed up in Freshippo, Bad Data for Four Apps

<ul class="">
<li>Internet users increased 9.5% in China in 2020.</li>
<li>Shanghai Police prosecuted 14 Renren (RENN) employees for piracy of TV series.</li>
<li>Tiktok indicted Tencent (700 HK) for monopoly.</li>
<li>Bilibili has invested in 33 cartoon producers in the past 12 months.</li>
</ul>


Internet users increased 9.5% in China in 2020.
Shanghai Police prosecuted 14 Renren (RENN) employees for piracy of TV series.
Tiktok indicted Tencent (700 HK) for monopoly.
Bilibili has invested in 33 cartoon producers in the past 12 months.


China Internet Weekly (8Feb21): TikTok Sued Tencent, Tencent Believed to Be Behind Renren Arrest

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.

<a href="https://www.smartkarma.com/entities/bilibili-inc" target="_blank" data-smartkarma-citation="entities:26793:1" rel="noopener">Bilibili Inc (BILI US)</a> , the Chinese mobile games and video platform has confidentially filed for a secondary listing on the Hong Kong Stock Exchange and the company could raise over US$3.5bn. In our previous insight <a href="https://www.smartkarma.com/insights/bilibili-secondary-listing-diversifying-revenue-mix-should-make-profits-possible-in-the-medium-term" target="_blank" data-smartkarma-citation="insights:47049" rel="noopener">Bilibili Secondary Listing: Diversifying Revenue Mix Should Make Profits Possible in the Medium Term</a> , we examined the company’s business model, segments, drivers and margins.In this insight, we would be comparing the company against its closest peer <a href="https://www.smartkarma.com/entities/huya-inc" target="_blank" data-smartkarma-citation="entities:26983:1" rel="noopener">HUYA Inc (HUYA US)</a> , who is a leading player in the game livestreaming market in China. In addition to offering games, Huya also has expanded its offerings to cover non-game entertainment content such as anime, outdoor activities, live chats and online theatre.

Bilibili Inc (BILI US) , the Chinese mobile games and video platform has confidentially filed for a secondary listing on the Hong Kong Stock Exchange and the company could raise over US$3.5bn. In our previous insight Bilibili Secondary Listing: Diversifying Revenue Mix Should Make Profits Possible in the Medium Term , we examined the company’s business model, segments, drivers and margins.In this insight, we would be comparing the company against its closest peer HUYA Inc (HUYA US) , who is a leading player in the game livestreaming market in China. In addition to offering games, Huya also has expanded its offerings to cover non-game entertainment content such as anime, outdoor activities, live chats and online theatre.

Bilibili Vs Huya:Strong Top Line Growth; Outspending Huya on Marketing-Reason for Absence of Profits

Equity Capital Markets

CNBC reported on Tuesday (12th January 2021) that the Chinese mobile games and video platform <a href="https://www.smartkarma.com/entities/bilibili-inc" target="_blank" data-smartkarma-citation="entities:26793:1" rel="noopener">Bilibili Inc (BILI US)</a>  has confidentially filed for a secondary listing on the Hong Kong Stock Exchange that could raise over US$2bn.Bilibili is the latest US-listed Chinese company to launch a secondary listing on the HKEX. The company was listed on the NASDAQ on 28th March 2018 and Hong Kong’s listing rules require a track record of at least two financial years of good regulatory compliance on another qualifying exchange before seeking for a secondary listing.In our previous insight on the company’s secondary listing <a href="https://www.smartkarma.com/insights/bilibili-early-thoughts-on-bilibili-s-secondary-listing" target="_blank" data-smartkarma-citation="insights:41512" rel="noopener">Bilibili: Early Thoughts on Bilibili’s Secondary Listing</a> , we discussed the company’s business model, segments and financials. This is the first of a series of reports on Bilibili, where we will be examining the company’s fundamentals and valuation ahead of its HKEX listing.

CNBC reported on Tuesday (12th January 2021) that the Chinese mobile games and video platform Bilibili Inc (BILI US)  has confidentially filed for a secondary listing on the Hong Kong Stock Exchange that could raise over US$2bn.Bilibili is the latest US-listed Chinese company to launch a secondary listing on the HKEX. The company was listed on the NASDAQ on 28th March 2018 and Hong Kong’s listing rules require a track record of at least two financial years of good regulatory compliance on another qualifying exchange before seeking for a secondary listing.In our previous insight on the company’s secondary listing Bilibili: Early Thoughts on Bilibili’s Secondary Listing , we discussed the company’s business model, segments and financials. This is the first of a series of reports on Bilibili, where we will be examining the company’s fundamentals and valuation ahead of its HKEX listing.

Bilibili Secondary Listing: Diversifying Revenue Mix Should Make Profits Possible in the Medium Term

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)

Baidu: A Closer Look at Non-Marketing Baidu Core. What Are We Paying for EV?

In this insight, I take a closer look at “Non-marketing Baidu Core” and analyse what the current market value implies for those operations, as well...

Wium Malan, CFA

China Internet Weekly (15Feb2021): Meituan Employee Showed up in Freshippo, Bad Data for Four Apps

Baidu , iQiyi, Trip.com, and Autohome got negative industry data.A Meituan delivery worker showed up in a Freshippo store.

Ming Lu

China Internet Weekly (8Feb21): TikTok Sued Tencent, Tencent Believed to Be Behind Renren Arrest

Shanghai Police prosecuted 14 employees in Renren for piracy of TV series. Tiktok indicted Tencent for monopoly. Bilibili has invested in 33...

Ming Lu

Bilibili Vs Huya:Strong Top Line Growth; Outspending Huya on Marketing-Reason for Absence of Profits

Bilibili has filed for a secondary listing on the HKEX and in this insight, we would be comparing the company against its closest peer Huya.

Shifara Samsudeen, ACMA, CGMA

Bilibili Secondary Listing: Diversifying Revenue Mix Should Make Profits Possible in the Medium Term

Bilibili has confidentially filed for a secondary listing on the Hong Kong Stock Exchange that could raise over US$2bn. In this insight, we examine...

Shifara Samsudeen, ACMA, CGMA

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52-week Range

Market Cap (USDm)

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