HK/China Equity Long-Short

Osbert Tang, CFA

Thematic (Sector/Industry)

<ul>
<li>The just finished "Year of the Rabbit" Chinese New Year has witnessed strong revival in travel appetite. Total domestic travelers increased 23.1% YoY, returning to 88.6% of 2019 level.</li>
<li>
<a href="https://www.smartkarma.com/entities/tongcheng-elong-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27363:1" rel="noopener">Tongcheng-Elong (780 HK)</a>, <a href="https://www.smartkarma.com/entities/trip-com-group-ltd-23a341d0-4f63-4175-a8c5-ee990906cacd" target="_blank" data-smartkarma-citation="entities:36424:1" rel="noopener">Trip.com (9961 HK)</a>, <a href="https://www.smartkarma.com/entities/huazhu-group-ltd-79e0c5b5-ad55-42ed-b8d2-a2173defd0ea" target="_blank" data-smartkarma-citation="entities:33487:1" rel="noopener">Huazhu Group (1179 HK)</a>, <a href="https://www.smartkarma.com/entities/fosun-tourism-group" target="_blank" data-smartkarma-citation="entities:27439:1" rel="noopener">Fosun Tourism (1992 HK)</a>, <a href="https://www.smartkarma.com/entities/china-southern-airlines-co-ltd" target="_blank" data-smartkarma-citation="entities:1078:1" rel="noopener">China Southern Airlines (1055 HK)</a> and <a href="https://www.smartkarma.com/entities/china-film-co-ltd" target="_blank" data-smartkarma-citation="entities:29943:1" rel="noopener">China Film Co (600977 CH)</a> are some of the beneficiaries.</li>
<li>As we passed peak of infections and overseas PCR and visa constraints are further removed, the trend of improvement in travel demand will sustain into the National Day holidays.  </li>
</ul>


The just finished "Year of the Rabbit" Chinese New Year has witnessed strong revival in travel appetite. Total domestic travelers increased 23.1% YoY, returning to 88.6% of 2019 level.

Tongcheng-Elong (780 HK), Trip.com (9961 HK), Huazhu Group (1179 HK), Fosun Tourism (1992 HK), China Southern Airlines (1055 HK) and China Film Co (600977 CH) are some of the beneficiaries.
As we passed peak of infections and overseas PCR and visa constraints are further removed, the trend of improvement in travel demand will sustain into the National Day holidays.  


Chinese New Year Travel Market: Roundup And Implications

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

Cathay Media and Education Group / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/cathay-media-and-education-group-inc" target="_blank" data-smartkarma-citation="entities:29147:1" rel="noopener">Cathay Media and Education (1981 HK)</a> is a media group, built on twin pillars of a leading TV/film production business and a higher education business focused on media and arts. Cathay will commence trading on Wednesday, 15 July. Cathay priced its IPO at HK$3.10 per share, at the top-end of the indicative price range of HK$2.86-3.10 per share. Cathay raised net proceeds of HK$1,150.5 million ($148 million).</p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/cathay-media-education-ipo-initiation-tune-in" target="_blank" rel="noopener">our initiation note</a>, we stated that Cathay is an attractive play for investors seeking exposure to the relatively faster-growing China media sector but with a lower risk profile due to the relatively stable revenue and cash generation from the higher education business. Notably, since the announcement of the IPO price range, the peer group has re-rated. Our valuation analysis suggests that the IPO price remains attractive.</p></div></div></div>

Cathay Media and Education (1981 HK) is a media group, built on twin pillars of a leading TV/film production business and a higher education business focused on media and arts. Cathay will commence trading on Wednesday, 15 July. Cathay priced its IPO at HK$3.10 per share, at the top-end of the indicative price range of HK$2.86-3.10 per share. Cathay raised net proceeds of HK$1,150.5 million ($148 million).In our initiation note, we stated that Cathay is an attractive play for investors seeking exposure to the relatively faster-growing China media sector but with a lower risk profile due to the relatively stable revenue and cash generation from the higher education business. Notably, since the announcement of the IPO price range, the peer group has re-rated. Our valuation analysis suggests that the IPO price remains attractive.

Cathay Media & Education IPO: Trading Debut

<div><p><a href="https://www.smartkarma.com/entities/cathay-media-and-education-group-inc" target="_blank" data-smartkarma-citation="entities:29147:1" rel="noopener">Cathay Media and Education (1981 HK)</a> is a media group, built on twin pillars of a leading TV/film production business and a higher education business focused on media and arts. It has launched a Hong Kong IPO to raise net proceeds of HK$1,103.5 million ($142 million) at the mid-point of the IPO price range of HK$2.86-3.10 per share.</p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/cathay-media-education-ipo-initiation-tune-in" target="_blank" rel="noopener">our initiation note</a>, we stated that Cathay is an attractive play for investors seeking exposure to the relatively faster-growing China media sector but with a lower risk profile due to the relatively stable revenue and cash generation from the higher education business. Our valuation analysis suggests that the price range is attractive. </p></div></div></div>

Cathay Media and Education (1981 HK) is a media group, built on twin pillars of a leading TV/film production business and a higher education business focused on media and arts. It has launched a Hong Kong IPO to raise net proceeds of HK$1,103.5 million ($142 million) at the mid-point of the IPO price range of HK$2.86-3.10 per share.In our initiation note, we stated that Cathay is an attractive play for investors seeking exposure to the relatively faster-growing China media sector but with a lower risk profile due to the relatively stable revenue and cash generation from the higher education business. Our valuation analysis suggests that the price range is attractive. 

Cathay Media & Education IPO: Valuation Insights

<p><a href="https://www.smartkarma.com/entities/cathay-media-and-education-group-inc" target="_blank" data-smartkarma-citation="entities:29147:1" rel="noopener">Cathay Media and Education (1981 HK)</a> is a media group, built on twin pillars of a leading TV/film production business and a higher education business focused on media and arts. It has launched a Hong Kong IPO to raise net proceeds of HK$1,103.5 million ($142 million) at the mid-point of the IPO price range of HK$2.86-3.10 per share. </p><div class="content-highlight"><p>The China media sector is characterised by high revenue volatility (due to regulations and the timing of the delivery of productions) and high capital intensity. Our analysis suggests that Cathay is an attractive play for investors seeking exposure to the relatively faster-growing China media sector but with a lower risk profile due to the relatively stable revenue and cash generation from the higher education business. </p></div>

Cathay Media and Education (1981 HK) is a media group, built on twin pillars of a leading TV/film production business and a higher education business focused on media and arts. It has launched a Hong Kong IPO to raise net proceeds of HK$1,103.5 million ($142 million) at the mid-point of the IPO price range of HK$2.86-3.10 per share. The China media sector is characterised by high revenue volatility (due to regulations and the timing of the delivery of productions) and high capital intensity. Our analysis suggests that Cathay is an attractive play for investors seeking exposure to the relatively faster-growing China media sector but with a lower risk profile due to the relatively stable revenue and cash generation from the higher education business. 

Cathay Media & Education IPO Initiation: Tune In

Maoyan Entertainment / Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/27451" target="_blank" data-smartkarma-citation="entities:27451:1">Maoyan Entertainment (EPLUS HK)</a> is the largest online movie ticketing service provider in China. The mid-point of Maoyan's IPO price range of HK$14.8-20.4 per share implies a market value of $2.5 billion (HK$19.8 billion). Five cornerstone investors have agreed to buy $30 million or 10% of the offering at the IPO mid-point. The cornerstone investors are <a href="https://www.smartkarma.com/entities/888" target="_blank" data-smartkarma-citation="entities:888:1">Imax China Holding (1970 HK)</a>, Hylink Digital Solutions, Prestige of The Sun, Welight Capital and <a href="https://www.smartkarma.com/entities/24409" target="_blank" data-smartkarma-citation="entities:24409:1">Xiaomi Corp (1810 HK)</a>. </p><div class="content-highlight"><p>Our analysis suggests Maoyan is being offered at a material premium to a peer group of major Chinese internet companies. Due to challenging prospects faced by Maoyan as outlined in <a href="https://www.smartkarma.com/insights/maoyan-entertainment-ipo-the-trouble-with-blockbusters" target="_blank">our previous research</a>, we believe a premium rating is unwarranted. Consequently, we are inclined to sit out this IPO.</p></div>

Maoyan Entertainment (EPLUS HK) is the largest online movie ticketing service provider in China. The mid-point of Maoyan's IPO price range of HK$14.8-20.4 per share implies a market value of $2.5 billion (HK$19.8 billion). Five cornerstone investors have agreed to buy $30 million or 10% of the offering at the IPO mid-point. The cornerstone investors are Imax China Holding (1970 HK), Hylink Digital Solutions, Prestige of The Sun, Welight Capital and Xiaomi Corp (1810 HK). Our analysis suggests Maoyan is being offered at a material premium to a peer group of major Chinese internet companies. Due to challenging prospects faced by Maoyan as outlined in our previous research, we believe a premium rating is unwarranted. Consequently, we are inclined to sit out this IPO.

Maoyan Entertainment IPO Valuation: Press the Skip Button

China

Beijing Enlight Media Company Limited invest, produces and distributes television programs, films and teleplays. The Company's major products include TV shows, TV entertainment programs, films and drama series.

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

Beijing Enlight Media (300251 CH)

Chinese New Year Travel Market: Roundup And Implications

Total domestic travelers in China was up 23.1% in CNY. Tongcheng-Elong, Trip.com, Huazhu Group, Fosun Tourism, China Southern Airlines and China...

Osbert Tang, CFA

Cathay Media & Education IPO: Trading Debut

Cathay Media and Education (1981 HK) is a media group, built on twin pillars of a leading TV/film production business and a higher education...

Arun George

Cathay Media & Education IPO: Valuation Insights

Cathay Media and Education (1981 HK) is a media group, built on twin pillars of a leading TV/film production business and a higher education...

Arun George

Cathay Media & Education IPO Initiation: Tune In

Cathay Media and Education (1981 HK) is a media group, built on twin pillars of a leading TV/film production business and a higher education...

Arun George

Maoyan Entertainment IPO Valuation: Press the Skip Button

Maoyan Entertainment (EPLUS HK) is the largest online movie ticketing service provider in China. The mid-point of Maoyan's IPO price range of...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)