External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>Cloud Music announced FY23 financial results: total revenue dropped by 13% YoY to RMB7.87bn in FY23, in line with our/consensus estimate.</li><li>2H23 total revenue was down by 16% YoY to RMB3.96bn, mainly due to the adjustment of social entertainment business (-42% YoY).</li><li>Cloud music recorded adjusted net income of RMB819mn in FY23, beating our/consensus estimate of RMB686/629mn, thanks to the solid GPM improvement (+12.3ppt YoY). </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cloud Music announced FY23 financial results: total revenue dropped by 13% YoY to RMB7.87bn in FY23, in line with our/consensus estimate.2H23 total revenue was down by 16% YoY to RMB3.96bn, mainly due to the adjustment of social entertainment business (-42% YoY).Cloud music recorded adjusted net income of RMB819mn in FY23, beating our/consensus estimate of RMB686/629mn, thanks to the solid GPM improvement (+12.3ppt YoY). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cloud Music (9899 HK) - Solid Core Music Business and Margin Expansion Outlook

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>Cloud Village Inc. (CVI), also known as NetEase Music, raised around US$420m in its Hong Kong IPO in Dec 21. The IPO was almost entirely taken up by cornerstones.</li>
<li>The company had also earlier obtained investments from Baidu and Alibaba, along with other mainly PE investors. These investors will be released from their lock-up on 1st Jun 2022.</li>
<li>In this note, we will talk about the lock-up dynamics and updates over the past few months.</li>
</ul>


Cloud Village Inc. (CVI), also known as NetEase Music, raised around US$420m in its Hong Kong IPO in Dec 21. The IPO was almost entirely taken up by cornerstones.
The company had also earlier obtained investments from Baidu and Alibaba, along with other mainly PE investors. These investors will be released from their lock-up on 1st Jun 2022.
In this note, we will talk about the lock-up dynamics and updates over the past few months.


Cloud Village IPO Lock-Up - Selling the PE Stock (US$350m) Might Solve the Liquidity Issues

<ul><li>Cloud Music reported 1H23 financial results: total revenue declined by 8% YoY to RMB3.9bn (in line with consensus estimate), mainly due to the operational adjustment to social entertainment business.</li><li>Adjusted net income was RMB332mn in 1H23 (1H22: net loss of RMB217mn), beating consensus estimate of RMB96mn, primarily due to the enhanced GPM (+12pct YoY).</li><li>As social entertainment business continues to face pressure, we lower FY23-25E total revenue forecast by 8-9%; but we raise FY23-FY25E adjusted net income forecast to RMB686/974/1,365mn (previous: RMB194/618/1,065mn) on 1) better content cost saving; 2) optimized live streaming revenue-sharing ratio; 3) enhanced operating efficiency. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cloud Music reported 1H23 financial results: total revenue declined by 8% YoY to RMB3.9bn (in line with consensus estimate), mainly due to the operational adjustment to social entertainment business.Adjusted net income was RMB332mn in 1H23 (1H22: net loss of RMB217mn), beating consensus estimate of RMB96mn, primarily due to the enhanced GPM (+12pct YoY).As social entertainment business continues to face pressure, we lower FY23-25E total revenue forecast by 8-9%; but we raise FY23-FY25E adjusted net income forecast to RMB686/974/1,365mn (previous: RMB194/618/1,065mn) on 1) better content cost saving; 2) optimized live streaming revenue-sharing ratio; 3) enhanced operating efficiency. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cloud Music (9899 HK) – 1H23 Earnings Beat on Strong GPM Expansion

<ul><li>Cloud Music gradually shifts its focus from revenue growth to sustainable earnings growth.</li><li>We forecast total revenue to decline by 9% YoY to RMB3.9bn in 1H23, as the Company reduced in-app exposure of live streaming functions and lowered revenue sharing ratio to drive quality growth of social entertainment business.</li><li>Despite the revenue decline, we expect Cloud Music to achieve breakeven and generate adjusted net income of RMB42mn in 1H23 (1H22: net loss of RMB217mn), mainly due to the enhanced GPM (+10pcts YoY). </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cloud Music gradually shifts its focus from revenue growth to sustainable earnings growth.We forecast total revenue to decline by 9% YoY to RMB3.9bn in 1H23, as the Company reduced in-app exposure of live streaming functions and lowered revenue sharing ratio to drive quality growth of social entertainment business.Despite the revenue decline, we expect Cloud Music to achieve breakeven and generate adjusted net income of RMB42mn in 1H23 (1H22: net loss of RMB217mn), mainly due to the enhanced GPM (+10pcts YoY). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Cloud Music (9899 HK) – 1H23 Preview: Solid Improvement in Profitability

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.

Vertex Technology Acquisition Corporation / Equity Capital Markets

Vertex Technology Acquisition Corporation

<ul>
<li>
<a href="https://www.smartkarma.com/entities/vertex-technology-acquisition-corporation-ltd" target="_blank" data-smartkarma-citation="entities:35394:1" rel="noopener">Vertex Technology Acquisition Corporation (VTAC SP)</a> agreed to a De-SPAC transaction with 17LIVE, the top pure-play live streaming platform (by revenue) in Japan and Taiwan combined.</li>
<li>Industry data and the financials suggest that 17LIVE does not have a sustainable competitive advantage to translate its position into high earnings quality. </li>
<li>The purchase consideration of 17LIVE in the De-SPAC transaction is S$925.1 million (US$682.2 million). Our valuation analysis suggests that this consideration is full.</li>
</ul>



Vertex Technology Acquisition Corporation (VTAC SP) agreed to a De-SPAC transaction with 17LIVE, the top pure-play live streaming platform (by revenue) in Japan and Taiwan combined.
Industry data and the financials suggest that 17LIVE does not have a sustainable competitive advantage to translate its position into high earnings quality. 
The purchase consideration of 17LIVE in the De-SPAC transaction is S$925.1 million (US$682.2 million). Our valuation analysis suggests that this consideration is full.


Vertex Technology Acquisition (VTAC SP)/17LIVE: Turn Off

China

CLOUD VILLAGE INC operates as a music company. The Company develops a leading online music paltform which provides community centric online music services, social entertainment services, and other services. Cloud Village provides its services throughout China.

Cloud Village (9899 HK)

Cloud Music (9899 HK) - Solid Core Music Business and Margin Expansion Outlook

Cloud Music announced FY23 financial results: total revenue dropped by 13% YoY to RMB7.87bn in FY23, in line with our/consensus estimate.

CMB International

Cloud Village IPO Lock-Up - Selling the PE Stock (US$350m) Might Solve the Liquidity Issues

Cloud Village Inc. (CVI), also known as NetEase Music, raised around US$420m in its Hong Kong IPO in Dec 21. Investors will be released from their...

Sumeet Singh

Cloud Music (9899 HK) – 1H23 Earnings Beat on Strong GPM Expansion

Adjusted net income was RMB332mn in 1H23 (1H22: net loss of RMB217mn), beating consensus estimate of RMB96mn, primarily due to the enhanced GPM...

CMB International

Cloud Music (9899 HK) – 1H23 Preview: Solid Improvement in Profitability

We forecast total revenue to decline by 9% YoY to RMB3.9bn in 1H23, as the Company reduced in-app exposure of live streaming functions and lowered...

CMB International

Vertex Technology Acquisition (VTAC SP)/17LIVE: Turn Off

Industry data and the financials suggest caution is warranted. The purchase consideration of 17LIVE in the De-SPAC transaction is S$925.1 million...

Arun George