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

<p><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 1Q2021 results yesterday (13<sup>th</sup> May) which saw revenues growing 68.4% YoY to RMB3.9bn while operating losses for the quarter increased to 26.4% of revenues compared to 23.5% in 1Q2020. The revenue for the quarter beat consensus estimates by 3.9% while Bilibili’s operating losses for the quarter were slightly higher than consensus estimates.</p>

Bilibili Inc (BILI US)  reported 1Q2021 results yesterday (13th May) which saw revenues growing 68.4% YoY to RMB3.9bn while operating losses for the quarter increased to 26.4% of revenues compared to 23.5% in 1Q2020. The revenue for the quarter beat consensus estimates by 3.9% while Bilibili’s operating losses for the quarter were slightly higher than consensus estimates.

Bilibili 1Q2021 Results: Value-Added Services and Advertising Drive Revenue Beat

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.

Equity Capital Markets

<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></div><div><p>In our previous notes,<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>, and  <a href="https://www.smartkarma.com/insights/ximalaya-pre-ipo-the-negatives" target="_blank" rel="noopener">Ximalaya Pre-IPO - The Negatives</a> we have covered the positive and negative aspects of the deal.</p></div><div><p>In this note, we will compare Ximalaya with some of its listed peers.</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 notes, Ximalaya Pre-IPO - The Positives - A Whole Lot of Listening, and  Ximalaya Pre-IPO - The Negatives we have covered the positive and negative aspects of the deal.In this note, we will compare Ximalaya with some of its listed peers.

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Quantitative Analysis

<p>After outperforming its global peers over the last year, the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng Tech Index (HSTECH INDEX)</a> has had a big drawdown that has brought its performance closer to its peers. Today's drop has closed the gap even further.</p><p>With a backdrop of heightened US-China tensions, increased regulatory pressure from the State Administration for Market Regulation (SAMR) and an increased focus on monopolies (or perceived monopolies), investors have been happy to sell first given the gains they were sitting on, plus the valuation premium.</p><p>With valuations now lining up with their global peers, Hang Seng Indexes has announced that the China Securities Regulatory Commission (CSRC) had approved 7 ETFs and 1 Index Fund that will track the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng Tech Index (HSTECH INDEX)</a>. The mainland ETFs could garner a large amount of assets quickly given that most index members are household names. Additionally, stocks like <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, <a href="https://www.smartkarma.com/entities/baidu-inc-a55ca720-5968-48f0-8194-ac94390d065c" target="_blank" data-smartkarma-citation="entities:32212:1" rel="noopener">Baidu (9888 HK)</a> and <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a> are not eligible for Southbound Stock Connect and the ETFs will offer investors access to those names.</p><p>With the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng Tech Index (HSTECH INDEX)</a> (or the "NASDAQ of the East" as it is called) underperforming the <a href="https://www.smartkarma.com/entities/nasdaq-100-stock-index" target="_blank" data-smartkarma-citation="entities:26197:1" rel="noopener">Nasdaq-100 Stock Index (NDX INDEX)</a> (of the West) over the last few months, there could be an opportunity to buy the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng Tech Index (HSTECH INDEX)</a> futures and hedge with <a href="https://www.smartkarma.com/entities/nasdaq-100-stock-index" target="_blank" data-smartkarma-citation="entities:26197:1" rel="noopener">Nasdaq-100 Stock Index (NDX INDEX)</a> futures.</p>

After outperforming its global peers over the last year, the Hang Seng Tech Index (HSTECH INDEX) has had a big drawdown that has brought its performance closer to its peers. Today's drop has closed the gap even further.With a backdrop of heightened US-China tensions, increased regulatory pressure from the State Administration for Market Regulation (SAMR) and an increased focus on monopolies (or perceived monopolies), investors have been happy to sell first given the gains they were sitting on, plus the valuation premium.With valuations now lining up with their global peers, Hang Seng Indexes has announced that the China Securities Regulatory Commission (CSRC) had approved 7 ETFs and 1 Index Fund that will track the Hang Seng Tech Index (HSTECH INDEX). The mainland ETFs could garner a large amount of assets quickly given that most index members are household names. Additionally, stocks like Alibaba Group (9988 HK), Baidu (9888 HK) and JD.com Inc. (9618 HK) are not eligible for Southbound Stock Connect and the ETFs will offer investors access to those names.With the Hang Seng Tech Index (HSTECH INDEX) (or the "NASDAQ of the East" as it is called) underperforming the Nasdaq-100 Stock Index (NDX INDEX) (of the West) over the last few months, there could be an opportunity to buy the Hang Seng Tech Index (HSTECH INDEX) futures and hedge with Nasdaq-100 Stock Index (NDX INDEX) futures.

Hang Seng TECH Index: How Much Lower Can It Go? CSRC Approves 7 ETFs

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

<p><a href="https://www.smartkarma.com/entities/ximalaya-inc" target="_blank" data-smartkarma-citation="entities:33232:1" rel="noopener">Ximalaya (XIMA US), which</a> 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>, is getting ready to complete its IPO in the United States in the next several weeks. Ximalaya is the largest online audio platform in China in terms of MAU. <a href="https://www.reuters.com/technology/chinese-podcast-startup-ximalaya-files-us-ipo-2021-04-30/" target="_blank" rel="noopener">Ximalaya</a> was last valued at $3.7 billion in July 2018. The main underwriters of the IPO include Goldman Sachs, Morgan Stanley, BofA Securities, and CICC. </p><p>The company generated sales of 4.1 billion RMB (up 51.3% YoY) and gross profit of 2.0 billion RMB (up 70.3% YoY). From 2018 to 2020, the company's sales increased by 65.7% CAGR. The company's sales continued to accelerate by 65.2% YoY in 1Q 2021. The increasing sales growth has been accompanied by improving profit margins.</p>

Ximalaya (XIMA US), which is backed by Tencent (700 HK), is getting ready to complete its IPO in the United States in the next several weeks. Ximalaya is the largest online audio platform in China in terms of MAU. Ximalaya was last valued at $3.7 billion in July 2018. The main underwriters of the IPO include Goldman Sachs, Morgan Stanley, BofA Securities, and CICC. The company generated sales of 4.1 billion RMB (up 51.3% YoY) and gross profit of 2.0 billion RMB (up 70.3% YoY). From 2018 to 2020, the company's sales increased by 65.7% CAGR. The company's sales continued to accelerate by 65.2% YoY in 1Q 2021. The increasing sales growth has been accompanied by improving profit margins.

Ximalaya IPO Preview - Creating the Joe Rogans of China

<p><a href="https://www.smartkarma.com/entities/ximalaya-inc" target="_blank" data-smartkarma-citation="entities:33232:1" rel="noopener">Ximalaya (XIMA US)</a>  a leading voice audio platform in China has filed for an IPO in the US and has a placeholder indication to raise about US$100m. According to news media outlets, Ximalaya could raise as much as US$500m through the IPO. According to CIC, Ximalaya was ranked the largest online audio platform in China in terms of average MAU, total mobile listening time and total revenues in 2020.</p><p>China is the world’s largest online audio market in terms of the number of online audio users. The online audio penetration rate (defined as mobile online audio MAU divided by total mobile internet MAU) in China is still below 20% compared to about 47% in the US. The online audio industry in China is forecasted to grow rapidly over the next few years driven by increasing supply of high-quality content, willingness to pay for content, rise of IoT and improving technologies.</p><p>Comprehensive online audio platforms such as Ximalaya (whose platform focuses on both content and interaction) are expected to enjoy strong growth and online audio platforms offer diverse monetisation streams such as membership subscription, advertising, virtual gifts in live streaming and education services.</p>

Ximalaya (XIMA US)  a leading voice audio platform in China has filed for an IPO in the US and has a placeholder indication to raise about US$100m. According to news media outlets, Ximalaya could raise as much as US$500m through the IPO. According to CIC, Ximalaya was ranked the largest online audio platform in China in terms of average MAU, total mobile listening time and total revenues in 2020.China is the world’s largest online audio market in terms of the number of online audio users. The online audio penetration rate (defined as mobile online audio MAU divided by total mobile internet MAU) in China is still below 20% compared to about 47% in the US. The online audio industry in China is forecasted to grow rapidly over the next few years driven by increasing supply of high-quality content, willingness to pay for content, rise of IoT and improving technologies.Comprehensive online audio platforms such as Ximalaya (whose platform focuses on both content and interaction) are expected to enjoy strong growth and online audio platforms offer diverse monetisation streams such as membership subscription, advertising, virtual gifts in live streaming and education services.

Ximalaya IPO: Diversified Revenue Channels with Further Potential to Monetise Users and Content

China

Kuaishou Technology operates as a content community and social platform. The Company helps users create, upload and watch short videos on mobile devices. Kuaishou Technology offers services worldwide.

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Kuaishou Technology (1024 HK)

Bilibili 1Q2021 Results: Value-Added Services and Advertising Drive Revenue Beat

Bilibili reported 1Q2021 results yesterday (13th May) which saw revenues growing 68.4% YoY to RMB3.9bn while operating losses for the quarter...

Shifara Samsudeen, ACMA, CGMA

Ximalaya Pre-IPO - Peer Comparison

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 MAUs...

Sumeet Singh

Hang Seng TECH Index: How Much Lower Can It Go? CSRC Approves 7 ETFs

The Hang Seng TECH Index has had a large drawdown over the last couple of months on regulatory pressure and stretched valuations. With new ETFs...

Brian Freitas

Ximalaya IPO Preview - Creating the Joe Rogans of China

Ximalaya is the largest online audio platform in China which is getting ready to complete its IPO in the next several weeks.

Douglas Kim

Ximalaya IPO: Diversified Revenue Channels with Further Potential to Monetise Users and Content

Ximalaya’s extensive audio content library and steadily growing user base has offered great opportunities to pursue further revenue growth.

Shifara Samsudeen, ACMA, CGMA

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