In today’s briefing:
- Tencent (700 HK) To Divest Meituan (3690 HK) – Impact and Index Implications
- CSI300 Index Rebalance Preview: Outperformance Continues & Could Keep Going
- Tencent’s Potential Sale of Meituan Stake – Read Across to Other Stocks & Index Implications
- KRX K-New Deal September Rebalancing: Screening Results
- Intel Corporation: The Ananki Acquisition & Other Developments
- Chinese Ecommerce Firm Checks Out with $110m from SoftBank, Sequoia
- T-Mobile US Inc: First VoNR Deployment & Other Drivers
- Open Edges Technology IPO Preview
- Oracle Corporation: OCI Push In India & Other Drivers
- Okta Inc.: Initiation of Coverage – Business Strategy
Tencent (700 HK) To Divest Meituan (3690 HK) – Impact and Index Implications
- Reuters this afternoon carried an article that Tencent (700 HK) was seeking to divest “US$24bn” (17%) of $78bn market cap delivery company Meituan (3690 HK) by year-end to mollify domestic regulators.
- Tencent would seek to launch a share sale within 2022 “if market conditions are favourable.” Meituan shares tanked 9%, immediately.
- The article suggests disposal via block sale (faster than negotiating with a private buyer), odd given Tencent’s Q1 2022 experience with the JD.com unwind. But it leads to BIG flows.
CSI300 Index Rebalance Preview: Outperformance Continues & Could Keep Going
- Past the midway mark in the review period, we see 18 potential changes to the Shanghai Shenzhen CSI 300 Index (SHSZ300 INDEX) at the December rebalance.
- We estimate a one-way turnover of 3.32% at the December rebalance leading to a one-way trade of CNY 8.55bn.
- The potential adds have outperformed the potential deletes and the Shanghai Shenzhen CSI 300 Index over the last few months, with the outperformance widening over the last few weeks.
Tencent’s Potential Sale of Meituan Stake – Read Across to Other Stocks & Index Implications
- Tencent (700 HK)‘s reported sale of its Meituan (3690 HK) stake led to a selloff on Meituan and on other companies that Tencent has invested in.
- There are 10 listed companies where Tencent (700 HK)‘s holding is over US$1bn. Some stakes are more likely to be sold than others.
- A complete stake sale will benefit some companies more than others since they are part of a wider array of indices and that will bring in passive flow.
KRX K-New Deal September Rebalancing: Screening Results
- KMW is the most important name in this rebalancing. It will be a newcomer to the K-New Deal, replacing AfreecaTV for Top Three in INTERNET.
- KMW’s inflow will be very substantial at 8.60x ADTV, whereas AfreecaTV will suffer an outflow equivalent to 1.69x ADTV.
- In addition, HLB will replace Hanmi Science, and Seojin System will take over Danal. Webzen also replaces Devsisters.
Intel Corporation: The Ananki Acquisition & Other Developments
- Intel has witnessed a rapid and sudden decline in sales activity which resulted in the company delivering a very weak quarterly result where it failed to meet Wall Street expectations in terms of revenues as well as earnings.
- In its efforts to refocus itself on its core, the management continued to carry out various corporate restructuring efforts.
- We provide the stock of Intel with a ‘Hold’ rating and a revision in the target price.
Chinese Ecommerce Firm Checks Out with $110m from SoftBank, Sequoia
- Dianxiaomi, a China-based ecommerce software-as-a-service platform, has bagged US$110 million in a series D round.
- With the latest investment, Dianxiaomi has raised a total of US$210 million this year. In March, the company closed a US$100 million series C round.
- Founded by Du Jianyin in 2014, the firm specializes in developing infrastructure for cross-border ecommerce
T-Mobile US Inc: First VoNR Deployment & Other Drivers
- T-Mobile has striven to provide the best pricing and network while operating in a cutthroat market and a macroeconomic situation that is rapidly changing.
- They also expanded the availability of T-Mobile Business Internet, making T-Mobile the first and only countrywide provider of the Internet for businesses.
- In this report, we have carried out a fundamental analysis of the historical financial statements of the company.
Open Edges Technology IPO Preview
- Open Edges Technology is getting ready to complete its IPO in Korea in September 2022. The IPO price range is from 15,000 won to 18,000 won.
- The IPO base deal size is from US$42 million to US$50 million. The expected market cap after the IPO is from 334 billion won to 401 billion won.
- Open Edges Technology is a system semiconductor IP specialist with one of the world’s only integrated AI semiconductor design asset IP platform.
Oracle Corporation: OCI Push In India & Other Drivers
- Oracle has rebounded well in terms of financial performance with a strong all-around beat in the recent quarter.
- The company is currently developing a comprehensive set of applications for the healthcare industry’s whole ecosystem, beginning with healthcare providers like hospitals and clinics.
- Besides, during the quarter, Oracle launched an “OCI dedicated region” for the India market as part of its cloud services platform, Oracle Cloud Infrastructure (OCI), to provide customers with public cloud services on-premises.
Okta Inc.: Initiation of Coverage – Business Strategy
- This is our first report on identity solutions provider, Okta Inc.
- The company delivered a solid set of results in the last quarter surpassing Wall Street expectations in terms of revenues as well as earnings.
- There was a rise in Okta’s stand-alone revenue, total revenue, current RPO, and RPO.
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