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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> reported 2Q2022 results on Friday. Revenue grew 16.4% YoY to RMB50.9bn (vs consensus RMB49.2bn) while operating losses dropped to 1.0% of revenue to RMB493m (vs consensus RMB3.3bn).</li>
<li>The company has changed its segmental reporting to a new reporting structure; Core Local Commerce, New Initiatives and Unallocated items.</li>
<li>Disclosures on key operating matrices such as GTV and no. of hotel room nights have not been provided and difficult to assess the performance of core businesses.</li>
</ul>



Meituan (3690 HK) reported 2Q2022 results on Friday. Revenue grew 16.4% YoY to RMB50.9bn (vs consensus RMB49.2bn) while operating losses dropped to 1.0% of revenue to RMB493m (vs consensus RMB3.3bn).
The company has changed its segmental reporting to a new reporting structure; Core Local Commerce, New Initiatives and Unallocated items.
Disclosures on key operating matrices such as GTV and no. of hotel room nights have not been provided and difficult to assess the performance of core businesses.


Meituan: Earnings Beat Estimates but Sudden Change in Segmental Disclosure Is Dubious

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/kingsoft-cloud" target="_blank" data-smartkarma-citation="entities:28835:1" rel="noopener">Kingsoft Cloud (KC US)</a> is the largest independent cloud service provider in China in terms of revenue in 2021 and its clientele includes the likes of ByteDance and Xiaomi.</li>
<li>KC is listed in NASDAQ and has filed for a dual primary listing on HKEx and has not disclosed the amount that it plans to raise from the stock issuance.</li>
<li>We are broadly positive on the company’s growth prospects and discuss the details below.</li>
</ul>



Kingsoft Cloud (KC US) is the largest independent cloud service provider in China in terms of revenue in 2021 and its clientele includes the likes of ByteDance and Xiaomi.
KC is listed in NASDAQ and has filed for a dual primary listing on HKEx and has not disclosed the amount that it plans to raise from the stock issuance.
We are broadly positive on the company’s growth prospects and discuss the details below.


Kingsoft Cloud: Thoughts on HK Dual Primary Listing

Research on Tech Companies

Evelyn Zhang

New Oriental Education & Technology Group / Equity Bottom-Up

New Oriental Education & Technology Group (9901 HK)

New Oriental Education & Technology Group

<ul>
<li>Oriental Selection achieves high-speed user growth through bilingual livestreaming, thanks to Douyin's  algorithmic recommendation mechanism before 6/18 ecommerce, after 6/18 the increase in the follower numbers &amp; GMV dropped sharply.</li>
<li>The unit price of the product is below average, due to the focus on produce and books, Agricultural livestreaming has always been a difficult to grow category</li>
<li>10%-15% Commission  is lower than industry average, and subsequent supply chain control and 1st party products have lower margins.</li>
</ul>


Oriental Selection achieves high-speed user growth through bilingual livestreaming, thanks to Douyin's  algorithmic recommendation mechanism before 6/18 ecommerce, after 6/18 the increase in the follower numbers &amp; GMV dropped sharply.
The unit price of the product is below average, due to the focus on produce and books, Agricultural livestreaming has always been a difficult to grow category
10%-15% Commission  is lower than industry average, and subsequent supply chain control and 1st party products have lower margins.


Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

<ul>
<li>Chinese digital advertising revenue growth has slowed down considerably over the past 4 quarters and Baidu has continued to consistently lose market share to the broader industry.</li>
<li>Non-Marketing revenue has led the growth for Baidu over the past 2 years and now contributes roughly 26% to Baidu Core (excludes iQiyi) revenue.</li>
<li>On a PE basis, Baidu is trading at only a slight discount to global giant, Alphabet, which testifies to the negative impact on earnings expectations from Baidu’s growth engines.</li>
</ul>


Chinese digital advertising revenue growth has slowed down considerably over the past 4 quarters and Baidu has continued to consistently lose market share to the broader industry.
Non-Marketing revenue has led the growth for Baidu over the past 2 years and now contributes roughly 26% to Baidu Core (excludes iQiyi) revenue.
On a PE basis, Baidu is trading at only a slight discount to global giant, Alphabet, which testifies to the negative impact on earnings expectations from Baidu’s growth engines.


Baidu: Can AI Cloud, Intelligent Driving Save the Day as Marketing Continues to Lose Market Share?

<ul>
<li>Several news media outlets report that ByteDance has launched a new music streaming service in China called Qishui Yinyue.</li>
<li>
<a href="https://www.smartkarma.com/entities/tencent-music-entertainment" target="_blank" data-smartkarma-citation="entities:27255:1" rel="noopener">Tencent Music (TME US)</a> earnings have come under pressure with ending of exclusive music streaming licensing deals and increased regulatory pressure on its social entertainment biz.</li>
<li>We expect TME’s 1Q2022E earnings to decline further with increased competition and drop in social entertainment.</li>
</ul>


Several news media outlets report that ByteDance has launched a new music streaming service in China called Qishui Yinyue.

Tencent Music (TME US) earnings have come under pressure with ending of exclusive music streaming licensing deals and increased regulatory pressure on its social entertainment biz.
We expect TME’s 1Q2022E earnings to decline further with increased competition and drop in social entertainment.


TME – ByteDance’s Launch of Music Streaming App to Add Further Pressure on Earnings

China

Beijing Douyin Information Service Co. Ltd. provides online information and contents. The Company develops and operates short video platform, original short video community, news platform, and other related products. Beijing Douyin Information Service offers services worldwide.

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

ByteDance (1439927D CH)

Meituan: Earnings Beat Estimates but Sudden Change in Segmental Disclosure Is Dubious

As expected, no disclosure on GTV or hotel room nights. Sudden Change in segmental disclosure is concerning as no separate numbers on core food...

Shifara Samsudeen, FCMA, CGMA

Kingsoft Cloud: Thoughts on HK Dual Primary Listing

Kingsoft Cloud has filed for a dual primary listing on HKEx and has not disclosed the amount that it plans to raise from the stock issuance. We...

Shifara Samsudeen, FCMA, CGMA

A New New Oriental?

After the recent doldrums, the education giant New Orient re-entered the spotlight recently with its new found streaming success. But can it last?

Evelyn Zhang

TME – ByteDance’s Launch of Music Streaming App to Add Further Pressure on Earnings

ByteDance has launched a new music streaming service in China called Qishui Yinyue. TME’s earnings have come under pressure with ending of...

Shifara Samsudeen, FCMA, CGMA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Meituan: Earnings Beat Estimates but Sudden Change in Segmental Disclosure Is Dubious

As expected, no disclosure on GTV or hotel room nights. Sudden Change in segmental disclosure is concerning as no separate numbers on core food...

Shifara Samsudeen, FCMA, CGMA

Kingsoft Cloud: Thoughts on HK Dual Primary Listing

Kingsoft Cloud has filed for a dual primary listing on HKEx and has not disclosed the amount that it plans to raise from the stock issuance. We...

Shifara Samsudeen, FCMA, CGMA

A New New Oriental?

After the recent doldrums, the education giant New Orient re-entered the spotlight recently with its new found streaming success. But can it last?

Evelyn Zhang

Baidu: Can AI Cloud, Intelligent Driving Save the Day as Marketing Continues to Lose Market Share?

In this insight, we look at the Chinese digital ad market, Baidu’s market share loss, and analyse whether AI Cloud and Intelligent Driving could...

Wium Malan, CFA

TME – ByteDance’s Launch of Music Streaming App to Add Further Pressure on Earnings

ByteDance has launched a new music streaming service in China called Qishui Yinyue. TME’s earnings have come under pressure with ending of...

Shifara Samsudeen, FCMA, CGMA