External reports (aggregated public sources), Value Investors Club

Value Investors Club

External reports (aggregated public sources)

Equity Bottom-Up

<ul><li>Investment opportunity in MOMO, Chinese ADR trading at 70% of net cash and 5x EPS/FCF</li><li>Core business may be in decline, but management has shown good cost discipline and capital allocation</li><li>Potential for MOMO to return $200m per year to shareholders, offering potential 50% return on investment as a cigar butt investment similar to HUYA success.</li></ul><p><em>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.</em></p>

Investment opportunity in MOMO, Chinese ADR trading at 70% of net cash and 5x EPS/FCFCore business may be in decline, but management has shown good cost discipline and capital allocationPotential for MOMO to return $200m per year to shareholders, offering potential 50% return on investment as a cigar butt investment similar to HUYA success.This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

Hello Group Inc (MOMO) - Monday, Apr 15, 2024

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.

Event-Driven

<ul>
<li>PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.</li>
<li>The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.</li>
<li>In this note, we'll talk about the latest developments, possible outcomes and implications.</li>
</ul>


PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
In this note, we'll talk about the latest developments, possible outcomes and implications.


China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

Greater China Equity Long/Short Analyst

Eric Chen

<ul>
<li>BILIBILI shares have rallied more than 200% since early November on prospects of China exiting zero-COVID, short covering, and accelerated breakeven timeline.</li>
<li>Yet simply achieving breakeven doesn’t justify its US$10 billion valuation. It has to be accompanied by decent profitable growth - an unlikely scenario given the aggressive downsizing needed for breakeven.</li>
<li>BILI’s businesses also entail structurally low margin. Stock could easily de-rate by 30% or more when growth euphoria recedes and disappointed profitability checks in during 2023.</li>
</ul>


BILIBILI shares have rallied more than 200% since early November on prospects of China exiting zero-COVID, short covering, and accelerated breakeven timeline.
Yet simply achieving breakeven doesn’t justify its US$10 billion valuation. It has to be accompanied by decent profitable growth - an unlikely scenario given the aggressive downsizing needed for breakeven.
BILI’s businesses also entail structurally low margin. Stock could easily de-rate by 30% or more when growth euphoria recedes and disappointed profitability checks in during 2023.


BILIBILI (BILI US): Can Achieving Breakeven Justify US$10bn Market Cap?

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/shift-up-corp" target="_blank" data-smartkarma-citation="entities:36232:1" rel="noopener">Shift Up (462870 KS)</a> is Korea's leading game development studio. It is seeking to raise up to US$320 million.    </li>
<li>Shift Up now focuses only on game development and has a policy of publishing games in cooperation with global partners such as <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> and <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony Corp (6758 JP)</a>. </li>
<li>The investment case rests on a stellar game development track record, several growth drivers, high profitability and cash generation.</li>
</ul>



Shift Up (462870 KS) is Korea's leading game development studio. It is seeking to raise up to US$320 million.    
Shift Up now focuses only on game development and has a policy of publishing games in cooperation with global partners such as Tencent (700 HK) and Sony Corp (6758 JP). 
The investment case rests on a stellar game development track record, several growth drivers, high profitability and cash generation.


Vertex Technology Acquisition Corporation / Equity Capital Markets

Vertex Technology Acquisition Corporation

<ul>
<li>
<a href="https://www.smartkarma.com/entities/vertex-technology-acquisition-corporation-ltd" target="_blank" data-smartkarma-citation="entities:35394:1" rel="noopener">Vertex Technology Acquisition Corporation (VTAC SP)</a> agreed to a De-SPAC transaction with 17LIVE, the top pure-play live streaming platform (by revenue) in Japan and Taiwan combined.</li>
<li>Industry data and the financials suggest that 17LIVE does not have a sustainable competitive advantage to translate its position into high earnings quality. </li>
<li>The purchase consideration of 17LIVE in the De-SPAC transaction is S$925.1 million (US$682.2 million). Our valuation analysis suggests that this consideration is full.</li>
</ul>



Vertex Technology Acquisition Corporation (VTAC SP) agreed to a De-SPAC transaction with 17LIVE, the top pure-play live streaming platform (by revenue) in Japan and Taiwan combined.
Industry data and the financials suggest that 17LIVE does not have a sustainable competitive advantage to translate its position into high earnings quality. 
The purchase consideration of 17LIVE in the De-SPAC transaction is S$925.1 million (US$682.2 million). Our valuation analysis suggests that this consideration is full.


Vertex Technology Acquisition (VTAC SP)/17LIVE: Turn Off

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.

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Hello Group (MOMO US)

Hello Group Inc (MOMO) - Monday, Apr 15, 2024

Investment opportunity in MOMO, Chinese ADR trading at 70% of net cash and 5x EPS/FCF. Core business may be in decline, but management has shown...

Value Investors Club

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

BILIBILI (BILI US): Can Achieving Breakeven Justify US$10bn Market Cap?

Simply achieving breakeven can't justify BILI's US$10bn market cap. Expect the company to be a leaner, profitable company yet without bright...

Eric Chen

Shift Up IPO: The Investment Case

The investment case rests on a stellar game development track record, several growth drivers, high profitability and cash generation.

Arun George

Vertex Technology Acquisition (VTAC SP)/17LIVE: Turn Off

Industry data and the financials suggest caution is warranted. The purchase consideration of 17LIVE in the De-SPAC transaction is S$925.1 million...

Arun George

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