Equity Analyst, LightStream Research

Oshadhi Kumarasiri

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

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> shares dropped 11.1% yesterday on rather disappointing 2QFY22 earnings which saw the company’s operating profit tumble 32% YoY.</li>
<li>Driven by the ongoing regulatory pressure and the Chinese government’s push for common prosperity measures, the Core-Commerce segment's revenue growth and operating margins have fallen below the pre-COVID trend line.</li>
<li>Although the valuation multiples look cheap compared to history, there's a possibility for multiples to drop another 50%, especially if the regulatory environment remains the same.</li>
</ul>



Alibaba Group (9988 HK) shares dropped 11.1% yesterday on rather disappointing 2QFY22 earnings which saw the company’s operating profit tumble 32% YoY.
Driven by the ongoing regulatory pressure and the Chinese government’s push for common prosperity measures, the Core-Commerce segment's revenue growth and operating margins have fallen below the pre-COVID trend line.
Although the valuation multiples look cheap compared to history, there's a possibility for multiples to drop another 50%, especially if the regulatory environment remains the same.


Alibaba: The Commerce Segment Weakens Amidst Government Scrutiny

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> released yet another knockout set of results in 3Q2021, representing the ninth quarter of triple-digit growth in GAAP sales plus management upgraded FY2021 guidance.</li>
<li>Key positives include e-commerce loss per order declining further in 3Q2021, take-rates improving further, marketplace revenues growing +151% YoY in 3Q2021 and good progress made in new markets. </li>
<li>Gaming adjusted EBITDA continues to cover losses from e-commerce despite slower growth from digital entertainment. We see the post-results correction as an opportunity to accumulate <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a>. </li>
</ul>



Sea Ltd (SE US) released yet another knockout set of results in 3Q2021, representing the ninth quarter of triple-digit growth in GAAP sales plus management upgraded FY2021 guidance.
Key positives include e-commerce loss per order declining further in 3Q2021, take-rates improving further, marketplace revenues growing +151% YoY in 3Q2021 and good progress made in new markets. 
Gaming adjusted EBITDA continues to cover losses from e-commerce despite slower growth from digital entertainment. We see the post-results correction as an opportunity to accumulate Sea Ltd (SE US). 


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

<ul>
<li>Cloud Village Inc. (CVI), also known as NetEase Music, now plans to raise around US$500m in its Hong Kong IPO. </li>
<li>The company has also obtained investments from Baidu and Alibaba, along with other investors.</li>
<li>In this note, we will talk about the updates from the revised PHIP filing and relook at valuations.</li>
</ul>


Cloud Village Inc. (CVI), also known as NetEase Music, now plans to raise around US$500m in its Hong Kong IPO. 
The company has also obtained investments from Baidu and Alibaba, along with other investors.
In this note, we will talk about the updates from the revised PHIP filing and relook at valuations.


Cloud Village (NetEase Music) Pre-IPO - Revised PHIP Updates, Along with Revised Valuation

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

<ul>
<li>Game revenue recovered due to the new game, “Harry Potter: Magic Awakened”.</li>
<li>Surprisingly, <a href="https://www.smartkarma.com/entities/youdao-inc" target="_blank" data-smartkarma-citation="entities:28315:1" rel="noopener">Youdao, Inc. (DAO US)</a> did not shrink under the pressure of new policy. </li>
<li>We believe both revenue growth and operating margin will rise in 2022.</li>
</ul>


Game revenue recovered due to the new game, “Harry Potter: Magic Awakened”.
Surprisingly, Youdao, Inc. (DAO US) did not shrink under the pressure of new policy. 
We believe both revenue growth and operating margin will rise in 2022.


NetEase (NTES): 3Q21, Magic Awakened by Harry Potter

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

Quwan Holding Limited / Equity Capital Markets

<a href="https://www.smartkarma.com/entities/quwan-holding-limited" target="_blank" data-smartkarma-citation="entities:34883:1" rel="noopener">Quwan Holding Limited (1478079D CH)</a> is looking to raise about US$300m in its upcoming Hong Kong IPO. The deal will be run by Goldman Sachs, CICC, and Jefferies. Quwan Network is a gaming-centric mobile social platform provider that operates primarily via its mobile app, TT Chat. According to Frost &amp; Sullivan (F&amp;S), the firm was the largest voice-based mobile social platform and the largest gamer-centric mobile social platform in China in terms of average MAUs in the first half of 2021. In 1H21, the firm had 16.2m average MAUs, and users spent approximately 158 minutes a day in voice chat rooms where on average, 850,000 of them are initiated per day.

Quwan Holding Limited (1478079D CH) is looking to raise about US$300m in its upcoming Hong Kong IPO. The deal will be run by Goldman Sachs, CICC, and Jefferies. Quwan Network is a gaming-centric mobile social platform provider that operates primarily via its mobile app, TT Chat. According to Frost &amp; Sullivan (F&amp;S), the firm was the largest voice-based mobile social platform and the largest gamer-centric mobile social platform in China in terms of average MAUs in the first half of 2021. In 1H21, the firm had 16.2m average MAUs, and users spent approximately 158 minutes a day in voice chat rooms where on average, 850,000 of them are initiated per day.

China

NetEase, Inc. is an Internet technology company that develops applications, services and other Internet technologies in China. The Company's core businesses consist of email service, web portal and online entertainment, including online gaming services. NetEase also offers online advertising, search, mobile applications and e-commerce.

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NetEase Inc (NTES US)

Alibaba: The Commerce Segment Weakens Amidst Government Scrutiny

Driven by the ongoing regulatory pressure and the Chinese government’s push for common prosperity measures, the Core-Commerce segment's revenue...

Oshadhi Kumarasiri

Sea Ltd (SE US) - The Sails Are Set

Sea Ltd (SE US) released knockout results in 3Q2021, representing the 9th quarter of triple-digit growth in GAAP sales plus management upgraded...

Angus Mackintosh

Cloud Village (NetEase Music) Pre-IPO - Revised PHIP Updates, Along with Revised Valuation

Cloud Village Inc. (CVI), also known as NetEase Music, now plans to raise around US$500m in its Hong Kong IPO. In this note, we talk about the...

Sumeet Singh

NetEase (NTES): 3Q21, Magic Awakened by Harry Potter

The new game, “Harry Potter: Magic Awakened”, is successful. Surprisingly, Youdao did not shrink under the new policy. We believe both revenue...

Ming Lu

Quwan Holding Limited Pre-IPO Tearsheet

Quwan Holding Limited (1478079D CH) is looking to raise about US$300m in its upcoming Hong Kong IPO. The deal will be run by Goldman Sachs, CICC,...

Clarence Chu

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