IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

Kuaishou Technology / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a> is the second-largest short video platform by average DAUs (daily active users) in 9M20, according to iResearch. Helped by a strong reception by both institutional and retail investors, Kuaishou is likely to price at the top-end of the IPO price range of HK$105-115 per share, according to press reports. The shares will start trading on 5 February.</p><div class="content-highlight"><p>The stage seems set for Kuaishou to follow the strong post-listing performance of recent tech listings in Hong Kong and the US. Early indications suggest that Kuaishou's grey market price has hit HK$250 per share, slightly more than twice the rumoured IPO price, <a href="http://www.aastocks.com/en/stocks/news/aafn-con/NOW.1073287/ipo-news" target="_blank" rel="noopener">according to Chinese media</a>. Our analysis suggests that a valuation of 2x the rumoured IPO price of HK$115 per share can be justified on stretched but plausible assumptions.</p></div>

Kuaishou Technology (1024 HK) is the second-largest short video platform by average DAUs (daily active users) in 9M20, according to iResearch. Helped by a strong reception by both institutional and retail investors, Kuaishou is likely to price at the top-end of the IPO price range of HK$105-115 per share, according to press reports. The shares will start trading on 5 February.The stage seems set for Kuaishou to follow the strong post-listing performance of recent tech listings in Hong Kong and the US. Early indications suggest that Kuaishou's grey market price has hit HK$250 per share, slightly more than twice the rumoured IPO price, according to Chinese media. Our analysis suggests that a valuation of 2x the rumoured IPO price of HK$115 per share can be justified on stretched but plausible assumptions.

Kuaishou IPO: Is It Worth Twice the IPO Price?

<div><p><a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Beijing Kuaishou Technology Co Ltd (1496219D CH)</a> is the second-largest short video platform by average DAUs (daily active users) in 9M20, according to iResearch. At the proposed IPO price range of HK$105-115 per share, Kuaishou will have a market cap of $55.6-60.9 billion. At the mid-point of the IPO price range, the total proceeds are HK$40,150 million ($5.2 billion). </p></div><div><p>Ten cornerstone investors will subscribe for $2.45 billion of the offer shares. The cornerstone investors include Capital Group, Temasek, GIC, Canada Pension Plan Investment Board, Abu Dhabi Investment Authority, BlackRock, Fidelity, Invesco, Boyu Capital and Morgan Stanley Investment.</p></div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/kuaishou-ipo-initiation-dancing-to-its-own-tune" target="_blank" data-smartkarma-citation="insights:45032" rel="noopener">Kuaishou IPO Initiation: Dancing to Its Own Tune</a>, we stated that while Kuaishou’s performance over the track record period is distorted due to various factors, we believe that the underlying fundamentals are attractive. In <a href="https://www.smartkarma.com/insights/kuaishou-ipo-thrill-seekers" target="_blank" data-smartkarma-citation="insights:47104" rel="noopener">Kuaishou IPO: Thrill Seekers</a>,  we noted that the PHIP which discloses 9M20 results and key operating data for 11M20 reinforces our view that Kuaishou is worth a look. Overall, we would participate in the IPO due to an attractive IPO price range.</p></div></div>

Beijing Kuaishou Technology Co Ltd (1496219D CH) is the second-largest short video platform by average DAUs (daily active users) in 9M20, according to iResearch. At the proposed IPO price range of HK$105-115 per share, Kuaishou will have a market cap of $55.6-60.9 billion. At the mid-point of the IPO price range, the total proceeds are HK$40,150 million ($5.2 billion). Ten cornerstone investors will subscribe for $2.45 billion of the offer shares. The cornerstone investors include Capital Group, Temasek, GIC, Canada Pension Plan Investment Board, Abu Dhabi Investment Authority, BlackRock, Fidelity, Invesco, Boyu Capital and Morgan Stanley Investment.In Kuaishou IPO Initiation: Dancing to Its Own Tune, we stated that while Kuaishou’s performance over the track record period is distorted due to various factors, we believe that the underlying fundamentals are attractive. In Kuaishou IPO: Thrill Seekers,  we noted that the PHIP which discloses 9M20 results and key operating data for 11M20 reinforces our view that Kuaishou is worth a look. Overall, we would participate in the IPO due to an attractive IPO price range.

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.

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/bilibili-inc" target="_blank" data-smartkarma-citation="entities:26793:1" rel="noopener">Bilibili Inc (BILI US)</a> , the Chinese mobile games and video platform has confidentially filed for a secondary listing on the Hong Kong Stock Exchange and the company could raise over US$3.5bn. In our previous insight <a href="https://www.smartkarma.com/insights/bilibili-secondary-listing-diversifying-revenue-mix-should-make-profits-possible-in-the-medium-term" target="_blank" data-smartkarma-citation="insights:47049" rel="noopener">Bilibili Secondary Listing: Diversifying Revenue Mix Should Make Profits Possible in the Medium Term</a> , we examined the company’s business model, segments, drivers and margins.</p><p>In this insight, we would be comparing the company against its closest peer <a href="https://www.smartkarma.com/entities/huya-inc" target="_blank" data-smartkarma-citation="entities:26983:1" rel="noopener">HUYA Inc (HUYA US)</a> , who is a leading player in the game livestreaming market in China. In addition to offering games, Huya also has expanded its offerings to cover non-game entertainment content such as anime, outdoor activities, live chats and online theatre.</p>

Bilibili Inc (BILI US) , the Chinese mobile games and video platform has confidentially filed for a secondary listing on the Hong Kong Stock Exchange and the company could raise over US$3.5bn. In our previous insight Bilibili Secondary Listing: Diversifying Revenue Mix Should Make Profits Possible in the Medium Term , we examined the company’s business model, segments, drivers and margins.In this insight, we would be comparing the company against its closest peer HUYA Inc (HUYA US) , who is a leading player in the game livestreaming market in China. In addition to offering games, Huya also has expanded its offerings to cover non-game entertainment content such as anime, outdoor activities, live chats and online theatre.

Bilibili Vs Huya:Strong Top Line Growth; Outspending Huya on Marketing-Reason for Absence of Profits

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.

Event-Driven

<div><p>Kuaishou Technology (KT) is a content community and social platform that is looking to raise around US$5bn in its Hong Kong IPO. The company is backed by Tencent, Sequoia China, Baidu, DST Global, Boyu Capital, Temasek and others.</p></div><div><p>As of nine months ended Sep 2020, it had 305m daily active users (DAUs), who spent 86 mins on average on the app every day. It also had 769m monthly active users (MAUs) and total e-commerce GMV of RMB204.1bn. On an average 1.1bn short videos were uploaded on its app during 1H20.</p></div><div><p>As per iResearch, Kuaishou was globally the largest live streaming platform by gross billings from virtual gifting and average live streaming MPUs, the second largest short video platform by average DAUs, and the second largest live streaming e-commerce platform by GMV, over six months ended June 30, 2020.</p></div><div><p>I have covered various aspects of the company’s performance in my previous notes: </p></div><div><ul style="list-style-type: disc;">
<li> <a href="https://www.smartkarma.com/insights/kuaishou-technology-pre-ipo-the-positives-hot-segment-fast-growth" target="_blank" rel="noopener">Kuaishou Technology Pre-IPO - The Positives - Hot Segment, fast growth</a>
</li>
<li><a href="https://www.smartkarma.com/insights/kuaishou-technology-pre-ipo-the-negatives-ample-doubts-remain" target="_blank" rel="noopener">Kuaishou Technology Pre-IPO - The Negatives - Ample Doubts Remain</a></li>
<li><a href="https://www.smartkarma.com/insights/kuaishou-technology-pre-ipo-peer-comparison-and-thoughts-on-valuation" target="_blank" rel="noopener">Kuaishou Technology Pre-IPO - Peer Comparison and Thoughts on Valuation</a></li>
<li><a href="https://www.smartkarma.com/insights/kuaishou-technology-pre-ipo-phip-updates-user-growth-has-been-slowing-down-post-covid" target="_blank" rel="noopener">Kuaishou Technology Pre-IPO - PHIP Updates - User Growth Has Been Slowing Down Post COVID</a></li>
<li><a href="https://www.smartkarma.com/insights/kuaishou-technology-pre-ipo-updated-forecasts-and-valuation" target="_blank" rel="noopener">Kuaishou Technology Pre-IPO - Updated Forecasts and Valuation</a></li>
</ul></div><div><p>In this note, I’ll talk about the early inclusion in the indices.</p></div>

Kuaishou Technology (KT) is a content community and social platform that is looking to raise around US$5bn in its Hong Kong IPO. The company is backed by Tencent, Sequoia China, Baidu, DST Global, Boyu Capital, Temasek and others.As of nine months ended Sep 2020, it had 305m daily active users (DAUs), who spent 86 mins on average on the app every day. It also had 769m monthly active users (MAUs) and total e-commerce GMV of RMB204.1bn. On an average 1.1bn short videos were uploaded on its app during 1H20.As per iResearch, Kuaishou was globally the largest live streaming platform by gross billings from virtual gifting and average live streaming MPUs, the second largest short video platform by average DAUs, and the second largest live streaming e-commerce platform by GMV, over six months ended June 30, 2020.I have covered various aspects of the company’s performance in my previous notes: 
 Kuaishou Technology Pre-IPO - The Positives - Hot Segment, fast growth

Kuaishou Technology Pre-IPO - The Negatives - Ample Doubts Remain
Kuaishou Technology Pre-IPO - Peer Comparison and Thoughts on Valuation
Kuaishou Technology Pre-IPO - PHIP Updates - User Growth Has Been Slowing Down Post COVID
Kuaishou Technology Pre-IPO - Updated Forecasts and Valuation
In this note, I’ll talk about the early inclusion in the indices.

Kuaishou Technology Pre-IPO - Index Implications, MSCI, FTSE and HSI Indices

<div>
<p><a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Beijing Kuaishou Technology Co Ltd (1496219D CH)</a> is the second-largest short video platform by average DAUs (daily active users) in 9M20, according to iResearch. Kuaishou has started pre-marketing for Hong Kong IPO to raise up to $5-6 billion. Kuaishou which was previously seeking a $50 billion valuation is now being valued by the syndicate at $65-91 billion, according to <a href="http://www.aastocks.com/en/stocks/news/aafn-con/NOW.1070003/ipo-news" target="_blank" rel="noopener">Chinese media reports</a>. Potential IPO investors seem to be more sanguine and according to these same reports are said to be a seeking a $60-70 billion valuation. </p>
<p>In <a href="https://www.smartkarma.com/insights/kuaishou-ipo-initiation-dancing-to-its-own-tune" target="_blank" data-smartkarma-citation="insights:45032" rel="noopener">Kuaishou IPO Initiation: Dancing to Its Own Tune</a>, we stated that while Kuaishou’s performance over the track record period is distorted due to various factors, we believe that the underlying fundamentals are attractive. In <a href="https://www.smartkarma.com/insights/kuaishou-ipo-thrill-seekers" target="_blank" data-smartkarma-citation="insights:47104" rel="noopener">Kuaishou IPO: Thrill Seekers</a>,  we noted that the PHIP which discloses 9M20 results and key operating data for 11M20 reinforces our view that Kuaishou is worth a look. </p>
<div class="content-highlight"><p>In this note, we update our forecasts and valuation presented in <a href="https://www.smartkarma.com/insights/kuaishou-ipo-valuation-first-look" target="_blank" data-smartkarma-citation="insights:46787" rel="noopener">Kuaishou IPO: Valuation First Look </a>for the latest set of results. Overall, based on valuation analysis, we think that a $65 billion valuation is justifiable (the low-end of the rumoured syndicate range) but would be hesitant to participate at a higher valuation.</p></div>
</div>


Beijing Kuaishou Technology Co Ltd (1496219D CH) is the second-largest short video platform by average DAUs (daily active users) in 9M20, according to iResearch. Kuaishou has started pre-marketing for Hong Kong IPO to raise up to $5-6 billion. Kuaishou which was previously seeking a $50 billion valuation is now being valued by the syndicate at $65-91 billion, according to Chinese media reports. Potential IPO investors seem to be more sanguine and according to these same reports are said to be a seeking a $60-70 billion valuation. 
In Kuaishou IPO Initiation: Dancing to Its Own Tune, we stated that while Kuaishou’s performance over the track record period is distorted due to various factors, we believe that the underlying fundamentals are attractive. In Kuaishou IPO: Thrill Seekers,  we noted that the PHIP which discloses 9M20 results and key operating data for 11M20 reinforces our view that Kuaishou is worth a look. 
In this note, we update our forecasts and valuation presented in Kuaishou IPO: Valuation First Look for the latest set of results. Overall, based on valuation analysis, we think that a $65 billion valuation is justifiable (the low-end of the rumoured syndicate range) but would be hesitant to participate at a higher valuation.


Kuaishou IPO: Valuation and Forecast Update

United States

HUYA Inc. operates as a game live streaming platform. The Company offers interactive video broadcast services including e-sports, music, reality show, entertainment genres, talent shows, and anime and outdoor activities. HUYA serves customers in China.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

HUYA (HUYA US)

Kuaishou IPO: Is It Worth Twice the IPO Price?

Kuaishou's grey market price has hit HK$250 per share, slightly more than 2x the IPO price of HK$115. Our analysis suggests that this valuation can...

Arun George

Kuaishou IPO: Valuation Insights

Kuaishou will raise proceeds $5.2 billion at the mid-point of the IPO price range of HK$105-115 per share. Overall, we would participate in the IPO...

Arun George

Bilibili Vs Huya:Strong Top Line Growth; Outspending Huya on Marketing-Reason for Absence of Profits

Bilibili has filed for a secondary listing on the HKEX and in this insight, we would be comparing the company against its closest peer Huya.

Shifara Samsudeen, FCMA, CGMA

Kuaishou Technology Pre-IPO - Index Implications, MSCI, FTSE and HSI Indices

Kuaishou Technology is a content community and social platform that is looking to raise around US$5bn in its Hong Kong IPO. The company is backed...

Sumeet Singh

Kuaishou IPO: Valuation and Forecast Update

Kuaishou is being valued by the syndicate at $65-91 bn, according to Chinese media reports. We think that a $65 bn valuation is justifiable but...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)