Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Equity Analyst with 15+ years of experience as a Buy Side analyst covering companies in the Emerging and Developed markets.
Fundamental and Quantitative analysis on companies in the Internet, Telecommunication, Media, Technology, IT Services, Healthcare, Pharmaceutical and other Industrial sectors.
Idea generation focussed on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Global Emerging Market Equities

Baidu Secondary Listing Early Look - Will Be One of the Largest Secondary Listings This Year

Baidu Secondary Listing - Smaller than Expected, Doing the Bare Minimum

Autohome Secondary Trading - Strong Retail, Weak Insti Coverage

Baidu Secondary Listing: Do the Fundamentals Stack Up?

Baidu: Acquisition of YY Live Is More Beneficial to JOYY than Baidu

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

An Analysis of ADR/HKEX Discount Behavior As The US Listed Chinese Tech Rush To Hong Kong

Equity Bottom-Up

Since my last detailed look at <a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a>’s valuation back in September last year (<a href="https://www.smartkarma.com/insights/baidu-strategies-for-operating-in-an-industry-in-decline" target="_blank" data-smartkarma-citation="insights:43393" rel="noopener">Baidu: Strategies for Operating in an Industry in Decline</a>) Baidu’s share price has witnessed a meteoric rise of 170%, re-rating from 6.2x to 16.9x NTM EV/EBITDA.This has been driven by several catalysts, such as M&amp;A into live streaming, increased share buybacks, the continued prospect of a Hong Kong listing, and improved reported earnings, but most-of-all, by their announcement that they plan to start an intelligent electric vehicle company in strategic partnership with <a href="https://www.smartkarma.com/entities/geely-automobile-holdings-ltd" target="_blank" data-smartkarma-citation="entities:127:1" rel="noopener">Geely Auto (175 HK)</a>. Following their recent 4Q20 results, management also went to great lengths to highlight the revenue growth acceleration in their “Non-marketing Baidu Core” sub-segment, emphasising the shift away from their traditional Core Search Advertising, or mobile ecosystem, to diversify revenue streams. In this insight, I take a closer look at this sub-segment and analyse what the current market value implies for those operations, as well as their future “intelligent electric vehicle” venture.

Since my last detailed look at Baidu (BIDU US)’s valuation back in September last year (Baidu: Strategies for Operating in an Industry in Decline) Baidu’s share price has witnessed a meteoric rise of 170%, re-rating from 6.2x to 16.9x NTM EV/EBITDA.This has been driven by several catalysts, such as M&amp;A into live streaming, increased share buybacks, the continued prospect of a Hong Kong listing, and improved reported earnings, but most-of-all, by their announcement that they plan to start an intelligent electric vehicle company in strategic partnership with Geely Auto (175 HK). Following their recent 4Q20 results, management also went to great lengths to highlight the revenue growth acceleration in their “Non-marketing Baidu Core” sub-segment, emphasising the shift away from their traditional Core Search Advertising, or mobile ecosystem, to diversify revenue streams. In this insight, I take a closer look at this sub-segment and analyse what the current market value implies for those operations, as well as their future “intelligent electric vehicle” venture.

Baidu: A Closer Look at Non-Marketing Baidu Core. What Are We Paying for EV?