In today’s briefing:
- Boss Zhipin (2076 HK | BZ US) HK Dual Primary Listing on 22 Dec – Index, Southbound, and SPECIAL
- Softbank Group – Requiem for WeWork’s Premium Valuation
- China Internet Weekly (19Dec2022): Trip.com, Kuaishou, IQiyi, Activision Blizzard
- Bukalapak (BUKA IJ) – Opportunity from Adversity
- Cambricon Technologies: Trade Blacklist by the US Govt Likely to Have Long-Term Negative Impact
- BABA Key Sell Points
- Hyperlounge Raises US$8M in Series A to Grow Beyond Being a Business Analytics Platform
- GoTo IPO Lockup Expiry Follow-Up – Has Corrected but Has Traded Relatively Little Volume
- Dmall Pre-IPO Tearsheet
- Sizable Beat: Sumo Logic Reported Better Than Expected 3QFY23 Results
Boss Zhipin (2076 HK | BZ US) HK Dual Primary Listing on 22 Dec – Index, Southbound, and SPECIAL
- Kanzhun (BZ US) a.k.a. has been listed in the US since about the same time as DiDi Global (DIDI US), and it had similar but minor tech issues pre-listing.
- On Friday 16 December, the company announced it would conduct a Listing by Introduction in Hong Kong under the ticker Zhipin (2076 HK), listing on 22 Dec.
- That creates an interesting launch supply/demand dynamic, likely HS Tech inclusion in March 2023, and then Southbound much later in 2023.
Softbank Group – Requiem for WeWork’s Premium Valuation
- The market cap of Vision Fund portfolio company The We Company (WeWork) (WE US) has fallen decisively below that of rival IWG PLC (IWG LN) for the first time
- Still despite WeWork’s constant drag on portfolio returns including c. $500mn this quarter, Vision Fund remains on track to end the quarter in the black (+$2bn QTD)
- The holding company discount appears to have stabilized at 35% but this seems a bit steep with markets volatile again and a move to 40% would not surprise
China Internet Weekly (19Dec2022): Trip.com, Kuaishou, IQiyi, Activision Blizzard
- Trip.com’s revenue increased by 29% YoY and adjusted EBITDA increased 164% YoY in 3Q22.
- Kuaishou announced that the views of short play increased by 40% in 2022.
- Activision Blizzard announced that they are looking for a new agency in China.
Bukalapak (BUKA IJ) – Opportunity from Adversity
- The ironically named warung-tech segment in Indonesia has seen a recent spate of layoffs by a number of key players, as the path to profitability becomes the key focus.
- One company that stands out as a potential beneficiary is Bukalapak, which is already the dominant player in this space through its Mitra business, especially outside Tier 1 cities.
- Bukalapak saw some dramatic improvements in both take rates and contribution margins in 3Q2022, with more to come in 4Q2022 and beyond, from both its Mitra and Specialty store segments.
Cambricon Technologies: Trade Blacklist by the US Govt Likely to Have Long-Term Negative Impact
- It was recently announced that US government put 36 Chinese companies including Cambricon Technologies on its trade blacklist that can restrict the semiconductor maker’s access to US technologies and products.
- The US government has determined that Cambricon Technologies and these other Chinese companies pose risk to the US national security.
- We believe that Cambricon Technologies being included in the trade blacklist by the US government is likely to have a long-term negative impact on the company.
BABA Key Sell Points
- BABA ADR shows well defined range trade points as the rising wedge matures. 173 stands out as formidable sell resistance and 157 the level to crack.
- MACD trendline coincides the “0” turn level that is expected to cap the upside near term and induce fresh down leg. The May break does send a forward weak signal.
- The macro picture continues to warn of a 135 retest in 2023. Current rising wedge is corrective in nature.
Hyperlounge Raises US$8M in Series A to Grow Beyond Being a Business Analytics Platform
- Hyperlounge, a real-time data analysis and management insights SaaS platform for small and medium-sized (SME) business executives, announced that it had raised US$8 million in Series A investment.
- The funding round is led by Altara Ventures, together with FuturePlay, StoneBridge, BA Partners, RyuKyung PSG, and Nextrans.
- South Korean software reseller UClick joined the funding round as a strategic investor.
GoTo IPO Lockup Expiry Follow-Up – Has Corrected but Has Traded Relatively Little Volume
- GoTo pre-IPO shareholders were released from the lockup on 1st Dec 2022, which led to a 47% slide in its share price.
- We had written about the upcoming lockup expiry in our earlier note, GoTo IPO Lockup Expiry – US$13bn Lockup Release or in Other Words, the Real IPO.
- While the price appears to be settling down now, given the intra-day trading limits in Indonesia, very little volumes have been transacted compared to the shares released from lockup.
Dmall Pre-IPO Tearsheet
- Dmall Inc (1751691D CH) is looking to raise about US$200m in its upcoming HK IPO. The deal will be run by Credit Suisse and CMB International.
- Dmall provides cloud-based, end-to-end SaaS platforms purpose-built for the local retail industry.
- Its service offerings consist of a retail core service cloud, an e-commerce service cloud and a marketing and advertising service cloud.
Sizable Beat: Sumo Logic Reported Better Than Expected 3QFY23 Results
- We maintain a bullish view on Sumo Logic Inc (SUMO US) after the company reported stronger than expected 3QFY23 revenues and management updated its financial guidance for FY23.
- We were impressed with subscription revenue growth, strong gross margins, and lower-than-expected operating loss. Sumo Logic Inc (SUMO US) increased FY23 revenue guidance to $298M-$299M.
- Our estimates suggest the company will cross the $300M ARR mark in 2022 and the stock currently trades at a discount to the 20%+ growth peer group.
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