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.

Event-Driven

<ul>
<li>Multiple new agencies have been reporting that <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> plans to trim its investment portfolio over the remainder of the year. </li>
<li>The reports have been coming in since the second half of the year and the company has been duly denying these rumors.</li>
<li>In this note, we look at Tencent’s shareholding in various companies to try and gauge which ones it could sell out of and how.</li>
</ul>


Multiple new agencies have been reporting that Tencent (700 HK) plans to trim its investment portfolio over the remainder of the year. 
The reports have been coming in since the second half of the year and the company has been duly denying these rumors.
In this note, we look at Tencent’s shareholding in various companies to try and gauge which ones it could sell out of and how.


Tencent Investee Selldown - The US$120bn Global Overhang

Japan/Asia Long-Short, LightStream Research

Mio Kato

Japan/Asia Long-Short

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.

While both Huya and Douyu failed to escape the downward pressure on Chinese tech stocks in the last quarter the latter noticeably outperformed, falling “just” 33% since our last insight vs. a 43% drop for Huya. Those moves have set things up very well for Huya though…

While both Huya and Douyu failed to escape the downward pressure on Chinese tech stocks in the last quarter the latter noticeably outperformed, falling “just” 33% since our last insight vs. a 43% drop for Huya. Those moves have set things up very well for Huya though…

Huya Vs. Douyu – Both Trading Near Net Cash but Buy the More Expensive One

We have consistently favoured Huya over Douyu over the last year based on the thesis that Douyu appeared to have engaged in some short-term window dressing on costs to obtain a favourable merger multiple and that Huya's operational performance was more sustainable. This appears to have been borne out over recent quarters and <a href="https://news.yahoo.com/chinese-antitrust-regulator-block-tencents-091439825.html" target="_blank" rel="noopener">Reuters is now reporting</a> that the merger will in fact be blocked.

We have consistently favoured Huya over Douyu over the last year based on the thesis that Douyu appeared to have engaged in some short-term window dressing on costs to obtain a favourable merger multiple and that Huya's operational performance was more sustainable. This appears to have been borne out over recent quarters and Reuters is now reporting that the merger will in fact be blocked.

Huya Vs. Douyu - Merger Blockage Is a Problem for Douyu

Equity Bottom-Up

Huya and Douyu reported results today with both companies seeing revenue growth rates decelerate. The stocks have been punished already and results do not look overly surprising relative to consensus estimates. However, we remain concerned about Douyu’s profit structure in the event the Huya-Douyu merger falls through.

Huya and Douyu reported results today with both companies seeing revenue growth rates decelerate. The stocks have been punished already and results do not look overly surprising relative to consensus estimates. However, we remain concerned about Douyu’s profit structure in the event the Huya-Douyu merger falls through.

Huya Vs. Douyu – Concerning Signs for Both

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.

<ul><li>Huya delivered mixed 2Q23 results, with soft topline but upbeat margin.</li><li>Looking ahead, Huya will step into a transition period with three-year strategic change.</li><li>Given livestreaming headwinds (regulation tightening, competition, macro, etc.), Huya plans to reallocate resources to explore new opportunities – game biz (expected to contribute 30% of total rev in FY25E). </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.

Huya delivered mixed 2Q23 results, with soft topline but upbeat margin.Looking ahead, Huya will step into a transition period with three-year strategic change.Given livestreaming headwinds (regulation tightening, competition, macro, etc.), Huya plans to reallocate resources to explore new opportunities – game biz (expected to contribute 30% of total rev in FY25E). 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.

Huya Inc. (HUYA US) – Shift to Game Monetization in Transition Year

United States

HUYA Inc. operates as a game live streaming platform. The Company offers interactive video broadcast services including e-sports, music, reality show, entertainment genres, talent shows, and anime and outdoor activities. HUYA serves customers in China.

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HUYA (HUYA US)

Tencent Investee Selldown - The US$120bn Global Overhang

There have been multiple reports that Tencent (700 HK) plans to trim its investment portfolio over the remainder of the year. We look at Tencent's...

Sumeet Singh

Huya Vs. Douyu – Both Trading Near Net Cash but Buy the More Expensive One

While both Huya and Douyu failed to escape the downward pressure on Chinese tech stocks in the last quarter the share price falls have set things...

Mio Kato

Huya Vs. Douyu - Merger Blockage Is a Problem for Douyu

Reuters is now reporting that the Huya-Douyu merger will in fact be blocked and we believe this is highly negative for Douyu but could be positive...

Mio Kato

Huya Vs. Douyu – Concerning Signs for Both

With Huya and Douyu both seeing revenue growth decelerate, we remain highly concerned about Douyu's profit structure and prospects if the announced...

Mio Kato

Huya Inc. (HUYA US) – Shift to Game Monetization in Transition Year

Huya delivered mixed 2Q23 results, with soft topline but upbeat margin. Looking ahead, Huya will step into a transition period with three-year...

CMB International

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