Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

Smartkarma

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Research Reinvented

Event-Driven

I initiated trade idea of SINA / WB on July 21st (<a href="https://www.smartkarma.com/insights/sina-wb-stub-ratio-at-all-time-low" target="_blank" data-smartkarma-citation="insights:4697">SINA / WB: Stub, Ratio at All Time Low</a>). Both <a href="https://www.smartkarma.com/entities/22691" target="_blank" data-smartkarma-citation="entities:22691:1">Sina Corp (Class A) (SINA US)</a> and <a href="https://www.smartkarma.com/entities/3826" target="_blank" data-smartkarma-citation="entities:3826:1">Weibo Corp (ADR) (WB US)</a> reported 2Q results last night. The stellar overnight performance of both stocks tells a lot about how the numbers beat the street's expectations. In this insight, I will provide a quick update of how the trade has moved since my initiation and how will the latest result impact the trade. First, SINA's discount to NaV is returning to its…

I initiated trade idea of SINA / WB on July 21st (SINA / WB: Stub, Ratio at All Time Low). Both Sina Corp (Class A) (SINA US) and Weibo Corp (ADR) (WB US) reported 2Q results last night. The stellar overnight performance of both stocks tells a lot about how the numbers beat the street's expectations. In this insight, I will provide a quick update of how the trade has moved since my initiation and how will the latest result impact the trade. First, SINA's discount to NaV is returning to its…

SINA / WB: Post 2Q Update, Portal Did Well, Stub Remains Cheap

<a href="https://www.smartkarma.com/profiles/286" target="_blank" data-smartkarma-citation="accounts:286">New Street Research</a> (NSR) first mentioned about SINA / WB trade in April ( <a href="https://www.smartkarma.com/insights/sina-weibo-capturing-the-shift-to-mobile-advertising-in-china" target="_blank" data-smartkarma-citation="insights:3400">Sina / Weibo: Capturing the Shift to Mobile Advertising in China</a>  ) and later met management of Sina (<a href="https://www.smartkarma.com/insights/sina-weibo-growth-in-advertising-verticals-and-social-commerce-sina-offers-cheap-entry-into-weibo" target="_blank" data-smartkarma-citation="insights:4229">Sina/Weibo: Growth in Advertising Verticals and Social Commerce. Sina Offers Cheap Entry into Weibo</a>). I'd like to provide more data points around this pair, thanks to our cloud based <a href="https://www.smartkarma.com/tools/holdcos" target="_blank">holding company analyzer</a>. <h2>Sina as a holding company</h2>A quick recap of what is in the <a href="https://www.smartkarma.com/entities/22691" target="_blank" data-smartkarma-citation="entities:22691:1">Sina Corp</a> 's holding company structure:<ul><li>55% of stake in …</li></ul>

New Street Research (NSR) first mentioned about SINA / WB trade in April ( Sina / Weibo: Capturing the Shift to Mobile Advertising in China  ) and later met management of Sina (Sina/Weibo: Growth in Advertising Verticals and Social Commerce. Sina Offers Cheap Entry into Weibo). I'd like to provide more data points around this pair, thanks to our cloud based holding company analyzer. Sina as a holding companyA quick recap of what is in the Sina Corp 's holding company structure:55% of stake in …

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New Street Research

Research is provided by our team of experienced analysts. Our work is idea driven, based on independence of thought, sector expertise, and firmly focused on fundamentals and valuation of telecoms and internet names globally. New Street is headquartered in London with offices in New York, Singapore and Australia. 

New Street Research is an independent, partner-owned, research firm specialising in equity and debt research. Our equity research embraces the following sectors:

Pan European Telecom Services and Cable
US Telecoms, Cable, Satellite and Towers
Global Emerging Market Telecoms
Japan Telecoms
Asian Internet
Pan European Healthcare
US Healthcare
Japanese Healthcare

We also provide debt research on:
Pan European Telecom Services and Cable

Thematic (Sector/Industry)

We discussed the issues facing Chinese internet companies wanting to go through a delisting/relisting process in <a href="https://www.smartkarma.com/insights/china-internet-going-private-transactions-at-risk" target="_blank" data-smartkarma-citation="insights:4501">China Internet: Going Private Transactions at Risk</a> . Our view is that with the CSRC issuing tougher new rules for reverse listings in China, and the IPO pipeline full already, there were risks to the going private transactions already announced in the US. A number of these have now been withdrawn ( <a href="https://www.smartkarma.com/entities/285" target="_blank" data-smartkarma-citation="entities:285">YY Inc</a> and <a href="https://www.smartkarma.com/entities/21-vianet-group-inc-adr" target="_blank" data-smartkarma-citation="entities:8489">21 Vianet</a>), and more face issues.   Focus Media, a company that has…

We discussed the issues facing Chinese internet companies wanting to go through a delisting/relisting process in China Internet: Going Private Transactions at Risk . Our view is that with the CSRC issuing tougher new rules for reverse listings in China, and the IPO pipeline full already, there were risks to the going private transactions already announced in the US. A number of these have now been withdrawn ( YY Inc and 21 Vianet), and more face issues.   Focus Media, a company that has…

Focus Media:  An Example of Why Chinese Firms Want To "Come Home"

Founder, Riedel Research

David Riedel

Founder

Independent equity research on GEM Markets

Riedel Research

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Equity Bottom-Up

SINA - Trading Below Value of Weibo Holding - BUY<ul class="ul1"><li class="li2">SINA is one of the most under-appreciated Internet investments in China.  The company owns the dominant ‘Twitter’ service in China as well as a widely used news portal.</li></ul><ul class="ul1"><li class="li2">The shares are currently trading below the value of their ownership in Weibo.</li></ul><ul class="ul1"><li class="li2">We believe this provides a profitable arbitrage opportunity.</li></ul><ul class="ul1"><li class="li2">We set the value of their Weibo stake at USD80/share (using a price for WB below the current market price) and use this as the SINA price target - This alone is nearly 60% higher than Sina’s market price.  BUY.</li></ul><ul class="ul1"><li class="li2">Non-Weibo revenues will continue to shrink, but this will help improve margins.</li></ul>

SINA - Trading Below Value of Weibo Holding - BUYSINA is one of the most under-appreciated Internet investments in China.  The company owns the dominant ‘Twitter’ service in China as well as a widely used news portal.The shares are currently trading below the value of their ownership in Weibo.We believe this provides a profitable arbitrage opportunity.We set the value of their Weibo stake at USD80/share (using a price for WB below the current market price) and use this as the SINA price target - This alone is nearly 60% higher than Sina’s market price.  BUY.Non-Weibo revenues will continue to shrink, but this will help improve margins.

SINA - Arbitrage Opportunity in Chinese Internet - Shares Could Double - BUY

In May, the China Securities Regulatory Commission (CSRC) issued draft regulations on back-door listings in an attempt to curb market volatility and speculation around shell companies. The rules extend the lock-up period for strategic shareholders from one to two or three years and include a ban on fundraising. This has put the brakes on privatisation plans by US-listed China companies as private equity investors need to contemplate longer holding periods in a volatile environment. We expect more privatisation plans to be withdrawn after recent moves from <a href="https://www.smartkarma.com/entities/21-vianet-group-inc-adr" target="_blank" data-smartkarma-citation="entities:8489:1">21 Vianet</a>  and <a href="https://www.smartkarma.com/entities/285" target="_blank" data-smartkarma-citation="entities:285:1">YY Inc</a>. <a href="https://www.smartkarma.com/entities/523" target="_blank" data-smartkarma-citation="entities:523">Qihoo</a> is the largest offer still in the mix and they have pushed closing back to August.  Some companies with existing privatisation plans have seen their share prices fall dramatically and may now offer interesting risk reward.

In May, the China Securities Regulatory Commission (CSRC) issued draft regulations on back-door listings in an attempt to curb market volatility and speculation around shell companies. The rules extend the lock-up period for strategic shareholders from one to two or three years and include a ban on fundraising. This has put the brakes on privatisation plans by US-listed China companies as private equity investors need to contemplate longer holding periods in a volatile environment. We expect more privatisation plans to be withdrawn after recent moves from 21 Vianet  and YY Inc. Qihoo is the largest offer still in the mix and they have pushed closing back to August.  Some companies with existing privatisation plans have seen their share prices fall dramatically and may now offer interesting risk reward. 

China Internet: Going Private Transactions at Risk

China

Weibo Corp is a social media platform for people to create, distribute and discover Chinese-language content.  The Company offers users public self-expression in real time with a powerful platform for social interaction, as well as content aggregation and distribution.

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Weibo Corp (WB US)

SINA / WB: Post 2Q Update, Portal Did Well, Stub Remains Cheap

I initiated trade idea of SINA / WB on July 21st (SINA / WB: Stub, Ratio at All Time Low). Both Sina Corp (Class A) (SINA US) and Weibo Corp (ADR)...

Ke Yan, CFA, FRM

SINA / WB: Stub, Ratio at All Time Low

New Street Research (NSR) first mentioned about SINA / WB trade in April ( Sina / Weibo: Capturing the Shift to Mobile Advertising in China ) and...

Ke Yan, CFA, FRM

Focus Media: An Example of Why Chinese Firms Want To "Come Home"

We discussed the issues facing Chinese internet companies wanting to go through a delisting/relisting process in China Internet: Going Private...

New Street Research

SINA - Arbitrage Opportunity in Chinese Internet - Shares Could Double - BUY

SINA - Trading Below Value of Weibo Holding - BUYSINA is one of the most under-appreciated Internet investments in China. The company owns the...

David Riedel

China Internet: Going Private Transactions at Risk

In May, the China Securities Regulatory Commission (CSRC) issued draft regulations on back-door listings in an attempt to curb market volatility...

New Street Research

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