Equity Analyst, LightStream Research

Oshadhi Kumarasiri

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

<ul>
<li>The potential spin-off listing of <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> Cloud faces significant challenges from various factors, making the timing particularly challenging for the spin-off.</li>
<li>The Cloud Business is experiencing intensifying price competition, while simultaneously facing substantial regulatory risks, particularly with the Chinese Government's plans to nationalize the cloud computing market.</li>
<li>Due to the ongoing price war and the potential risk of nationalization, we believe that <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd" target="_blank" data-smartkarma-citation="entities:787:1" rel="noopener">Alibaba (ADR) (BABA US)</a> Cloud's fair value is substantially below $10bn.</li>
</ul>


The potential spin-off listing of Alibaba Group (9988 HK) Cloud faces significant challenges from various factors, making the timing particularly challenging for the spin-off.
The Cloud Business is experiencing intensifying price competition, while simultaneously facing substantial regulatory risks, particularly with the Chinese Government's plans to nationalize the cloud computing market.
Due to the ongoing price war and the potential risk of nationalization, we believe that Alibaba (ADR) (BABA US) Cloud's fair value is substantially below $10bn.


Alibaba Cloud: Price War Rages as Nationalization Looms in China

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.

Equity Capital Markets

<ul>
<li>On 28th Mar 2023, <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> announced that it would adopt a new organizational and governance structure, splitting into six major business groups and other investments.</li>
<li>Alibaba also stated that each of the business groups would be set up as an independent entity with its own board and the groups will eventually seek to list.</li>
<li>In our previous notes, we highlighted which divisions could list and looked at some of the divisions in more detail. In this note, we will talk about the international operations.</li>
</ul>


On 28th Mar 2023, Alibaba Group (9988 HK) announced that it would adopt a new organizational and governance structure, splitting into six major business groups and other investments.
Alibaba also stated that each of the business groups would be set up as an independent entity with its own board and the groups will eventually seek to list.
In our previous notes, we highlighted which divisions could list and looked at some of the divisions in more detail. In this note, we will talk about the international operations.


Alibaba Potential IPOs - Part 4 - An Early Look at International Operations

Greater China Equity Long/Short Analyst

Eric Chen

<ul>
<li>1Q massive beat was driven by TEMU, higher-than expected take rates and other income, in order of importance. </li>
<li>We remain confident PDD's China online marketplace business will face increasing growth headwinds, but also acknowledge that TEMU has been growing on track with lower-than-expected losses.</li>
<li>Earnings growth from PDD's domestic business will be largely offset by losses incurred by TEMU for 2023. Strong 1Q has not fundamentally changed deceleration trend of full-year bottom-line growth trajectory. </li>
</ul>


1Q massive beat was driven by TEMU, higher-than expected take rates and other income, in order of importance. 
We remain confident PDD's China online marketplace business will face increasing growth headwinds, but also acknowledge that TEMU has been growing on track with lower-than-expected losses.
Earnings growth from PDD's domestic business will be largely offset by losses incurred by TEMU for 2023. Strong 1Q has not fundamentally changed deceleration trend of full-year bottom-line growth trajectory. 


Pinduoduo (PDD US): Deciphering Massive 1Q Beat

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jd-industrials" target="_blank" data-smartkarma-citation="entities:36875:1" rel="noopener">JD Industrials</a>  is looking to raise about US$1bn in its upcoming HK IPO. </li>
<li>JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.</li>
<li>We have looked at the company background and undertaken a peer comparison in our previous notes. In this note, we will talk about valuations.</li>
</ul>



JD Industrials  is looking to raise about US$1bn in its upcoming HK IPO. 
JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
We have looked at the company background and undertaken a peer comparison in our previous notes. In this note, we will talk about valuations.


JD Industrials Pre-IPO - Initial Thoughts on Valuation

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

<ul>
<li>In 1Q23, total revenue grew by 58% YoY and the operating margin improved to 18% versus 9% in the same period last year.</li>
<li>We believe the company benefited from its low-price products and the low comparison base last year.</li>
<li>We conclude the stock has an upside of 40% and a price target of US$100.</li>
</ul>


In 1Q23, total revenue grew by 58% YoY and the operating margin improved to 18% versus 9% in the same period last year.
We believe the company benefited from its low-price products and the low comparison base last year.
We conclude the stock has an upside of 40% and a price target of US$100.


Pinduoduo (PDD): 1Q23, Up by 58% YoY, 40% Upside

China

Alibaba Group Holding Limited provides online sales services. The Company provides internet infrastructure, electronic commerce, online financial, and internet content services through its subsidiaries. Alibaba Group Holding offers its products and services worldwide.

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Alibaba (9988 HK)

Alibaba Cloud: Price War Rages as Nationalization Looms in China

The Cloud Business is experiencing intensifying price competition, while simultaneously facing substantial regulatory risks, particularly with...

Oshadhi Kumarasiri

Alibaba Potential IPOs - Part 4 - An Early Look at International Operations

On 28th Mar 2023, Alibaba Group (9988 HK) announced that it would adopt a new organizational and governance structure. In this note, we take a look...

Sumeet Singh

Pinduoduo (PDD US): Deciphering Massive 1Q Beat

PDD’s massive 1Q beat didn’t answer the questions around its sustainability. We expect large fluctuations in earnings growth for the rest of 2023...

Eric Chen

JD Industrials Pre-IPO - Initial Thoughts on Valuation

JD Industrials is looking to raise about US$1bn in its upcoming HK IPO. In this note, we talk about our initial thoughts on valuations.

Sumeet Singh

Pinduoduo (PDD): 1Q23, Up by 58% YoY, 40% Upside

In 1Q23, total revenue grew by 58% YoY and the operating margin improved significantly. We believe the company benefit from its low-price products...

Ming Lu

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