Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

*One Reorganization Down, One More To Go: Tencent Holdings (700.HK) [Tencent] announced a new round of organizational and employee adjustments in its Platform and Content Group (PCG) - the largest reshuffle since it began in 2018. With Alibaba Holdings (BABA] agreeing to form a financial holding company. Tencent cannot be far behind; and  *Earnings To Decline, Capital Requirements To Increase: For Tencent, WeChat Pay and the broader lending/deposit taking business are likely to be reined-in. At CNY 38.5 bn, FinTech represents a growing 28.8% of revenue – and are key component of Tencent’s current and future results.  No matter what spin that Tencent wants to place on its other businesses, an FHC represents significant downside risks. Earnings will compress, as capital requirements increase.

*One Reorganization Down, One More To Go: Tencent Holdings (700.HK) [Tencent] announced a new round of organizational and employee adjustments in its Platform and Content Group (PCG) - the largest reshuffle since it began in 2018. With Alibaba Holdings (BABA] agreeing to form a financial holding company. Tencent cannot be far behind; and  *Earnings To Decline, Capital Requirements To Increase: For Tencent, WeChat Pay and the broader lending/deposit taking business are likely to be reined-in. At CNY 38.5 bn, FinTech represents a growing 28.8% of revenue – and are key component of Tencent’s current and future results.  No matter what spin that Tencent wants to place on its other businesses, an FHC represents significant downside risks. Earnings will compress, as capital requirements increase.

Tencent Holdings – FHC Restructure On Its Way

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

<div>
Trip.com raised around US$1.2bn in its secondary listing in Hong Kong.
We have covered the background of the deal in our earlier notes:
<ul>
<li>
<a href="https://www.smartkarma.com/insights/trip-com-secondary-listing-probably-needs-to-correct" target="_blank" rel="noopener">Trip.com Secondary Listing - Probably Needs to Correct,</a> and</li>
<li><a href="https://www.smartkarma.com/insights/trip-com-secondary-listing-quick-take-doing-the-bare-minimum-needs-some-more-correction" target="_blank" rel="noopener">Trip.com Secondary Listing Quick Take - Doing the Bare Minimum - Needs Some More Correction.</a></li>
</ul>
</div><div>In this note, we'll talk about the updates since then.</div>


Trip.com raised around US$1.2bn in its secondary listing in Hong Kong.
We have covered the background of the deal in our earlier notes:


Trip.com Secondary Listing - Probably Needs to Correct, and
Trip.com Secondary Listing Quick Take - Doing the Bare Minimum - Needs Some More Correction.

In this note, we'll talk about the updates since then.

Trip.com Secondary Trading Note - Delivered a Good Correction but Seems to Be Widely Distributed

*Focus On Positives: Given the scrutiny that Tencent Holdings (700.HK) [Tencent] has come under, it comes as no surprise that Tencent wanted to highlight its positive developments such as international expansion and tailwinds in gaming, potential ad load expansion in Video Accounts, and Mini Programs enrichment; and*Elephant In The Room: Over time, it is our belief that Tencent likely will be required to create a financial holding company for all of its banking, insurance, and payment services businesses – and be regulated along the lines of the banking sector. For Tencent, WeChat Pay and the broader lending/deposit taking business are likely to be reined-in. No matter what spin that Tencent wants to place on its other businesses, an FHC represents significant downside risks.

*Focus On Positives: Given the scrutiny that Tencent Holdings (700.HK) [Tencent] has come under, it comes as no surprise that Tencent wanted to highlight its positive developments such as international expansion and tailwinds in gaming, potential ad load expansion in Video Accounts, and Mini Programs enrichment; and*Elephant In The Room: Over time, it is our belief that Tencent likely will be required to create a financial holding company for all of its banking, insurance, and payment services businesses – and be regulated along the lines of the banking sector. For Tencent, WeChat Pay and the broader lending/deposit taking business are likely to be reined-in. No matter what spin that Tencent wants to place on its other businesses, an FHC represents significant downside risks.

Research on Tech Companies

Evelyn Zhang

Thematic (Sector/Industry)

The recent fall in price of many so called “China concept shares” of US listed Chinese companies, has largely been triggered by the passing of the "Holding Foreign Company Accountability Act" (HFCAA).A flock of US listed Chinese companies have since decided to relist in HKSE due to a few reasons:<ol>
<li>The HFCAA causing conflicting compliance requirements with Chinese regulations.</li>
<li>Fear among investors of forced delisting in the US.</li>
<li>HKEX deregulation allowing more Chinese companies to be listed.</li>
<li>The valuation in HK is in sync with the U.S. stock market.</li>
<li>HK attracting more Chinese funds to operate in HKEX.</li>
</ol>

The recent fall in price of many so called “China concept shares” of US listed Chinese companies, has largely been triggered by the passing of the "Holding Foreign Company Accountability Act" (HFCAA).A flock of US listed Chinese companies have since decided to relist in HKSE due to a few reasons:
The HFCAA causing conflicting compliance requirements with Chinese regulations.
Fear among investors of forced delisting in the US.
HKEX deregulation allowing more Chinese companies to be listed.
The valuation in HK is in sync with the U.S. stock market.
HK attracting more Chinese funds to operate in HKEX.


Exit the Dragon – the Mass Exodus of US Listed Chinese Companies

<div>
Trip.com plans to raise around US$1.2bn in its secondary listing in Hong Kong. We have looked at the background of the deal in our earlier note, <a href="https://www.smartkarma.com/insights/trip-com-secondary-listing-probably-needs-to-correct" target="_blank" rel="noopener">Trip.com Secondary Listing - Probably Needs to Correct</a>.
</div>
<div>
In this note, we’ll take a look at the final deal terms and talk about the impact of the raising.
</div>


Trip.com plans to raise around US$1.2bn in its secondary listing in Hong Kong. We have looked at the background of the deal in our earlier note, Trip.com Secondary Listing - Probably Needs to Correct.


In this note, we’ll take a look at the final deal terms and talk about the impact of the raising.


Trip.com Secondary Listing Quick Take - Doing the Bare Minimum - Needs Some More Correction

China

Baidu, Inc. operates an Internet search engine. The Company offers algorithmic search, enterprise search, news, MP3, and image searches, voice assistance, online storage, and navigation services. Baidu serves clients globally.

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Baidu (BIDU US)

Tencent Holdings – FHC Restructure On Its Way

TENCENT HOLDINGS: Tencent announced a reorganization to its Platform and Content Group (PCG). With Alibaba Holdings (BABA] agreeing to form a...

Thomas J. Monaco

Trip.com Secondary Trading Note - Delivered a Good Correction but Seems to Be Widely Distributed

Trip.com raised around US$1.2bn in its secondary listing in Hong Kong. In this note, we'll talk about the trading dynamics.

Sumeet Singh

Tencent Holdings – What Wasn’t Said

TENCENT HOLDINGS: Tencent receives a premium valuation which will be eroded over time, as it likely will be required to create an FHC. No matter...

Thomas J. Monaco

Exit the Dragon – the Mass Exodus of US Listed Chinese Companies

Is US-China financial decoupling affecting the US stock market? What's the future of US listed Chinese companies l? How can investors in China...

Evelyn Zhang

Trip.com Secondary Listing Quick Take - Doing the Bare Minimum - Needs Some More Correction

Trip.com plans to raise around US$1.2bn in its secondary listing in Hong Kong. In this note, we’ll take a look at the final deal terms and talk...

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

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