Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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 Bottom-Up

<ul>
<li>NetEase and Activision Blizzard will possibly terminate their cooperation next January.</li>
<li>Singles’ Day sales were not very successful for e-commerce apps such as Alibaba and JD.com.</li>
<li>IQiyi announced a revenue share rule to short TV series producers, including cost per mille and membership fee.</li>
</ul>


NetEase and Activision Blizzard will possibly terminate their cooperation next January.
Singles’ Day sales were not very successful for e-commerce apps such as Alibaba and JD.com.
IQiyi announced a revenue share rule to short TV series producers, including cost per mille and membership fee.


China Internet Weekly (14Nov2022): NetEase, Activision Blizzard, Alibaba, Tencent, IQiyi, Suning.com

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/iqiyi-inc" target="_blank" data-smartkarma-citation="entities:26755:1" rel="noopener">IQIYI Inc (IQ US)</a> reported 2Q2022 earnings last week. Revenue decreased 12.5% YoY to RMB6.66bn (vs consensus RMB6.67bn) and reported an OP of RMB125.8m (vs consensus RMB30.4m).</li>
<li>The company also announced a US$500m private placement of convertible notes with <a href="https://www.smartkarma.com/entities/pag" target="_blank" data-smartkarma-citation="entities:35940:1" rel="noopener">PAG (PAG HK)</a>  and the transaction is expected to close in 4Q2022.</li>
<li>The company also has entered into a content licensing agreement with Douyin which will likely bring in high-margin business for content distribution segment.</li>
</ul>



IQIYI Inc (IQ US) reported 2Q2022 earnings last week. Revenue decreased 12.5% YoY to RMB6.66bn (vs consensus RMB6.67bn) and reported an OP of RMB125.8m (vs consensus RMB30.4m).
The company also announced a US$500m private placement of convertible notes with PAG (PAG HK)  and the transaction is expected to close in 4Q2022.
The company also has entered into a content licensing agreement with Douyin which will likely bring in high-margin business for content distribution segment.


IQiyi: Improving Profitability but Headwinds Continue

<ul>
<li>NetEase will start its first game studio in Europe after setting up two studios in the U.S.</li>
<li>Tencent and Sony invested minor shareholding in a Japanese game developer.</li>
<li>In 1H22, S.F. Holding’s revenue grew dramatically and its margins improved significantly.</li>
</ul>


NetEase will start its first game studio in Europe after setting up two studios in the U.S.
Tencent and Sony invested minor shareholding in a Japanese game developer.
In 1H22, S.F. Holding’s revenue grew dramatically and its margins improved significantly.


China Internet Weekly (5Aug2022): Tencent, NetEase, S.F., Baidu, IQ

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Event-Driven

<ul>
<li>On 26th Aug 2022, PCAOB and CSRC announced that they had entered into an agreement granting US authorities access to investigate public accounting firms headquartered in China and HK.</li>
<li>On 2nd Apr 2022, CSRC put out a draft for public comments on the revision of certain provisions which would allow easier access by overseas regulators to China ADRs audits.</li>
<li>In this note, we'll talk about the latest developments and its implications.</li>
</ul>


On 26th Aug 2022, PCAOB and CSRC announced that they had entered into an agreement granting US authorities access to investigate public accounting firms headquartered in China and HK.
On 2nd Apr 2022, CSRC put out a draft for public comments on the revision of certain provisions which would allow easier access by overseas regulators to China ADRs audits.
In this note, we'll talk about the latest developments and its implications.


China ADRs Delisting - Tide Is Turning - Non-HK Listed ADRs Are Already Outperforming

<ul>
<li>Alibaba’s Freshippo expands to two inland cities, which reflects its success in coastal areas.</li>
<li>Online game’s revenue and players decreased for the first time in 14 years.</li>
<li>NetEase set up the second game studios in the United States.</li>
</ul>


Alibaba’s Freshippo expands to two inland cities, which reflects its success in coastal areas.
Online game’s revenue and players decreased for the first time in 14 years.
NetEase set up the second game studios in the United States.


China Internet Weekly (25Jul2022): Alibaba, Tencent, NetEase, IQiyi, Miss Fresh

China

iQIYI, Inc. offers video entertainment services. The Company provides movies, television dramas, variety shows, and other video contents. iQIYI offers services worldwide.

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iQIYI Inc (IQ US)

China Internet Weekly (14Nov2022): NetEase, Activision Blizzard, Alibaba, Tencent, IQiyi, Suning.com

NetEase and Activision Blizzard will possibly terminate their cooperation next January. Singles’ Day sales are not successful. iQiyi announced...

Ming Lu

IQiyi: Improving Profitability but Headwinds Continue

iQiyi's 2Q earnings were mixed. Though iQiyi is making good progress on the profitability side, membership numbers are on a downward trend. The...

Shifara Samsudeen, FCMA, CGMA

China Internet Weekly (5Aug2022): Tencent, NetEase, S.F., Baidu, IQ

NetEase will start its first game studio in Europe. Tencent invested in a Japanese game developer. In 1H22, S.F. Holding’s revenue grew...

Ming Lu

China ADRs Delisting - Tide Is Turning - Non-HK Listed ADRs Are Already Outperforming

On 26th Aug 2022, PCAOB and CSRC announced that they had entered into an agreement granting US authorities access to investigate public accounting...

Sumeet Singh

China Internet Weekly (25Jul2022): Alibaba, Tencent, NetEase, IQiyi, Miss Fresh

Alibaba’s Freshippo expands to two inland cities. Online game’s revenue and players decreased for the first time in 14 years. NetEase set up the...

Ming Lu

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