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Articles from Caixin Global

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News from Caixin

Cross Asset Strategy

<ul>
<li>
Alibaba / Alibaba splits into six business units in sweeping overhaul
</li>
<li>
Corruption / Exclusive: Former Exim Bank executive pleads guilty to taking bribes
</li>
<li>
Crackdown / China’s cyberspace watchdog takes aim at slander against businesses
</li>
</ul>



Alibaba / Alibaba splits into six business units in sweeping overhaul


Corruption / Exclusive: Former Exim Bank executive pleads guilty to taking bribes


Crackdown / China’s cyberspace watchdog takes aim at slander against businesses



CX Daily: Alibaba Splits Into Six Business Units in Sweeping Overhaul

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> shares hit accounts on Friday, they showed up in the CCASS data. All but about 2.3mm shares worth. Another 248.8mm shares showed up on Monday. </li>
<li>That was the Prosus stake, which was expected as of November 2022 (evidently, they did not convert more Tencent shares in the interim. </li>
<li>The data tells us some things. It does not tell us much else. Be careful of the details. </li>
</ul>



Meituan (3690 HK) shares hit accounts on Friday, they showed up in the CCASS data. All but about 2.3mm shares worth. Another 248.8mm shares showed up on Monday. 
That was the Prosus stake, which was expected as of November 2022 (evidently, they did not convert more Tencent shares in the interim. 
The data tells us some things. It does not tell us much else. Be careful of the details. 


Meituan (3690 HK) Distro - Prosus Shares Hit CCASS. What We Know And What We Don't Know

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.

<ul>
<li>On 16th Nov 22, post-market close, along with its 3Q22 results Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan.</li>
<li>At the time of declaration, the dividend amounted to US$20bn or 15.5% of Meituan’s outstanding shares.</li>
<li>We have spoken about the background of the deal in our earlier notes. In this note, we talk about the overnight updates.</li>
</ul>


On 16th Nov 22, post-market close, along with its 3Q22 results Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan.
At the time of declaration, the dividend amounted to US$20bn or 15.5% of Meituan’s outstanding shares.
We have spoken about the background of the deal in our earlier notes. In this note, we talk about the overnight updates.


Tencent Meituan Dividend - All Shares in CCASS - More Pressure Now but Will Have a Shorter Overhang

China/Asia TMT

Shawn Yang

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>Meituan reported C4Q22 total revenue 4% higher than cons. Non-IFRS net margin beat cons. by 0.4ppt due to strong cost control during lockdowns.  </li>
<li>Meituan has limited options against Douyin’s fast expansion of new service categories and customized offerings. The competition against Douyin will continue to pressure the in-store business in the long run.</li>
<li>Maintain SELL and cut TP to HK$125. Our TP implies 3x PS, 10x PE and 1x PS for on-demand delivery, in-store, and new initiatives, respectively.</li>
</ul>


Meituan reported C4Q22 total revenue 4% higher than cons. Non-IFRS net margin beat cons. by 0.4ppt due to strong cost control during lockdowns.  
Meituan has limited options against Douyin’s fast expansion of new service categories and customized offerings. The competition against Douyin will continue to pressure the in-store business in the long run.
Maintain SELL and cut TP to HK$125. Our TP implies 3x PS, 10x PE and 1x PS for on-demand delivery, in-store, and new initiatives, respectively.


[Meituan (3690 HK) Target Price Change]: Bracing for Douyin Impact with Limited War Chest

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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>Following the settlement of <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> shares from <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a>'s in-specie dividend, nearly all the shares are now in CCASS. </li>
<li>
<a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> has underperformed <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> by nearly 50% and <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> by 27% since the announcement of the in-specie dividend.</li>
<li>Short interest is higher over the last couple of months but is far lower than the selling that could come through, especially on the <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus (PRX NA)</a> holding.</li>
</ul>


Following the settlement of Meituan (3690 HK) shares from Tencent (700 HK)'s in-specie dividend, nearly all the shares are now in CCASS. 

Meituan (3690 HK) has underperformed Tencent (700 HK) by nearly 50% and Alibaba Group (9988 HK) by 27% since the announcement of the in-specie dividend.
Short interest is higher over the last couple of months but is far lower than the selling that could come through, especially on the Prosus (PRX NA) holding.


Meituan (3690 HK): All Stock in CCASS Now; Tracking the Selling

China

Meituan operates as a web based shopping platform for locally found consumer products and retail services. The Company offers deals of the day by selling vouchers on local services and entertainment, dining, delivery, and other services. Meituan provides its services throughout China.

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Meituan (3690 HK)

CX Daily: Alibaba Splits Into Six Business Units in Sweeping Overhaul

Alibaba splits into six business units in sweeping overhaul. Exclusive: Former Exim Bank executive pleads guilty to taking bribes. China’s...

Caixin Global

Meituan (3690 HK) Distro - Prosus Shares Hit CCASS. What We Know And What We Don't Know

Tencent's distribution of Meituan is fully-delivered. About 2.3mm shares in limbo (to be liquidated for cash). Prosus' shares at GS Monday....

Travis Lundy

Tencent Meituan Dividend - All Shares in CCASS - More Pressure Now but Will Have a Shorter Overhang

On 16th Nov 22, Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan. In this note, we talk...

Sumeet Singh

[Meituan (3690 HK) Target Price Change]: Bracing for Douyin Impact with Limited War Chest

Meituan is to focus on GTV growth to defend its market share against Douyin competition。 Meituan has limited options against Douyin’s fast...

Blue Lotus Research Institute

Meituan (3690 HK): All Stock in CCASS Now; Tracking the Selling

All Meituan stock from Tencent's distribution is in CCASS. Prosus has likely started to sell stock; shorts are small compared to the Prosus...

Brian Freitas

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