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 Capital Markets

<p>As anticipated, the Chinese mobile games and video platform <a href="https://www.smartkarma.com/entities/bilibili-inc" target="_blank" data-smartkarma-citation="entities:26793:1" rel="noopener">Bilibili Inc (BILI US)</a>  has received the approval for a secondary listing on the Hong Kong Stock Exchange. According to Bloomberg, Bilibili could raise about US$3bn through its secondary listing.</p><p>We discussed Bilibili’s business model, its segments, financials and also compared the company’s business model and financials with its closest competitor Huya. This insight will focus on Bilibili’s current valuation.</p><p>Read our previous insights:</p><p><a href="https://www.smartkarma.com/insights/bilibili-4q-earnings-value-added-services-surpass-mobile-games-e-commerce-gains-momentum" target="_blank" data-smartkarma-citation="insights:48569" rel="noopener">Bilibili 4Q Earnings: Value-Added Services Surpass Mobile Games; E-Commerce Gains Momentum</a> </p><p><a href="https://www.smartkarma.com/insights/bilibili-vs-huya-strong-top-line-growth-outspending-huya-on-marketing-reason-for-absence-of-profits" target="_blank" data-smartkarma-citation="insights:47309" rel="noopener">Bilibili Vs Huya:Strong Top Line Growth; Outspending Huya on Marketing-Reason for Absence of Profits</a> </p><p><a href="https://www.smartkarma.com/insights/bilibili-secondary-listing-diversifying-revenue-mix-should-make-profits-possible-in-the-medium-term" target="_blank" data-smartkarma-citation="insights:47049" rel="noopener">Bilibili Secondary Listing: Diversifying Revenue Mix Should Make Profits Possible in the Medium Term</a> </p>

As anticipated, the Chinese mobile games and video platform Bilibili Inc (BILI US)  has received the approval for a secondary listing on the Hong Kong Stock Exchange. According to Bloomberg, Bilibili could raise about US$3bn through its secondary listing.We discussed Bilibili’s business model, its segments, financials and also compared the company’s business model and financials with its closest competitor Huya. This insight will focus on Bilibili’s current valuation.Read our previous insights:Bilibili 4Q Earnings: Value-Added Services Surpass Mobile Games; E-Commerce Gains Momentum Bilibili Vs Huya:Strong Top Line Growth; Outspending Huya on Marketing-Reason for Absence of Profits Bilibili Secondary Listing: Diversifying Revenue Mix Should Make Profits Possible in the Medium Term 

Bilibili: Diversified Revenue Streams and Impressive Top Line Growth Justify Current Multiples

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.

<div><p>Bilibili plans to raise around US$3bn in its secondary listing in Hong Kong. </p></div><div><p>We have covered the background of the deal in our earlier notes, <a href="https://www.smartkarma.com/insights/bilibili-secondary-listing-early-look-will-probably-be-more-like-jd-and-netease" target="_blank" rel="noopener">Bilibili Secondary Listing Early Look - Will Probably Be More like JD and NetEase</a> and <a href="https://www.smartkarma.com/insights/bilibili-secondary-listing-early-look-4q20-results-quick-note" target="_blank" rel="noopener">Bilibili Secondary Listing Early Look - 4Q20 Results Quick Note</a>.</p></div><div><p>In this note, we'll touch upon the updates since our last note.</p></div>

Bilibili plans to raise around US$3bn in its secondary listing in Hong Kong. We have covered the background of the deal in our earlier notes, Bilibili Secondary Listing Early Look - Will Probably Be More like JD and NetEase and Bilibili Secondary Listing Early Look - 4Q20 Results Quick Note.In this note, we'll touch upon the updates since our last note.

Bilibili Secondary Listing - Volatile but Should Be Hot

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.

<p><a href="https://www.smartkarma.com/entities/bilibili-inc" target="_blank" data-smartkarma-citation="entities:26793:1" rel="noopener">Bilibili Inc (BILI US)</a> is a Chinese online video platform themed around anime, manga, and game fandom and targeted at the young generations in China. Bilibili ranked top five in terms of brand awareness in Gen Z+ users among video-centric platforms in China in 2020, according to iResearch. Bilibili passed its Hong Kong listing committee hearing and could raise up to $3 billion through a secondary listing, according to press reports. </p><p>Bilibili’s focus on Gen Z+ users allows it to benefit from their growing consumption needs in conjunction with their increasing spending power. Bilibili is one of the fastest-growing major Chinese internet companies. The revenue growth is increasingly fuelled by the creation of more consumption scenarios and higher paying user conversion. Largely due to the high growth narrative, Bilibili gets a free pass from investors on the widening losses and FCF burn. Nevertheless, Bilibili’s ambition is to deliver operating leverage and FCF generation over the medium-term, which is reflected in consensus estimates. </p><div class="content-highlight"><p>Overall, Bilibili has made great strides in expanding its user base (Gen Z to Gen Z+) and subsequently monetising this expanded user base through the diversification of its revenue streams and lowering its reliance on key games titles. The top-line metrics are strong, and the bottom-line metrics will likely improve in the medium term, in our view. Overall, we believe that Bilibili is fairly valued at the last close, and would look at any share price weakness to add/build a position. </p></div>

Bilibili Inc (BILI US) is a Chinese online video platform themed around anime, manga, and game fandom and targeted at the young generations in China. Bilibili ranked top five in terms of brand awareness in Gen Z+ users among video-centric platforms in China in 2020, according to iResearch. Bilibili passed its Hong Kong listing committee hearing and could raise up to $3 billion through a secondary listing, according to press reports. Bilibili’s focus on Gen Z+ users allows it to benefit from their growing consumption needs in conjunction with their increasing spending power. Bilibili is one of the fastest-growing major Chinese internet companies. The revenue growth is increasingly fuelled by the creation of more consumption scenarios and higher paying user conversion. Largely due to the high growth narrative, Bilibili gets a free pass from investors on the widening losses and FCF burn. Nevertheless, Bilibili’s ambition is to deliver operating leverage and FCF generation over the medium-term, which is reflected in consensus estimates. Overall, Bilibili has made great strides in expanding its user base (Gen Z to Gen Z+) and subsequently monetising this expanded user base through the diversification of its revenue streams and lowering its reliance on key games titles. The top-line metrics are strong, and the bottom-line metrics will likely improve in the medium term, in our view. Overall, we believe that Bilibili is fairly valued at the last close, and would look at any share price weakness to add/build a position. 

Bilibili Secondary Listing: A Big-Sum Game

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

Equity Bottom-Up

<ul>
<li>We believe revenue will grow by 48% in 2020 and 56% in 2021.</li>
<li>Live streaming will recover due to “electricity generation plan”.</li>
<li>The reason for advertising growth is in <a href="https://www.smartkarma.com/insights/kuaishou-1024-hk-short-video-market-expanding-but-express-version-not-profitable" target="_blank" data-smartkarma-citation="insights:48130" rel="noopener">Kuaishou (1024 HK): Short Video Market Expanding</a>.</li>
<li>We believe the company will make operating profit in 2022.</li>
<li>We believe the stock price has a downside of 17.5%.</li>
</ul>


We believe revenue will grow by 48% in 2020 and 56% in 2021.
Live streaming will recover due to “electricity generation plan”.
The reason for advertising growth is in Kuaishou (1024 HK): Short Video Market Expanding.
We believe the company will make operating profit in 2022.
We believe the stock price has a downside of 17.5%.


Kuaishou (1024 HK): Expanding Ad Mkt for 2020 and Anime Plan for 2021, but Needs Reasonable Price

Zhihu Technology / Equity Capital Markets

<div>
<p><a href="https://www.smartkarma.com/entities/zhihu-technology-ltd" target="_blank" data-smartkarma-citation="entities:32185:1" rel="noopener">Zhihu Technology (ZH US)</a> is the largest Q&amp;A-inspired online community and one of the top five comprehensive online content communities in China, both in terms of average mobile MAUs and revenue in 2020, according to CIC. Zhihu is acknowledged as the first choice among all online content communities in China where people look for information to make decisions or find answers, according to CIC. Zhihu is backed by <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent Holdings (700 HK)</a>, <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a> and <a href="https://www.smartkarma.com/entities/baidu-inc" target="_blank" data-smartkarma-citation="entities:179:1" rel="noopener">Baidu (BIDU US)</a>.</p>
<div class="content-highlight"><p>Zhihu is pre-marketing an NYSE IPO to raise proceeds of $1 billion, according to press reports. <span>In </span><a href="https://www.smartkarma.com/insights/zhihu-ipo-initiation-question-time" target="_blank" data-smartkarma-citation="insights:48928" rel="noopener">Zhihu IPO Initiation: Question Time</a><span>, we opined that as the largest Q&amp;A-inspired online community, Zhihu is well-positioned to benefit from favourable industry trends. We concluded that Zhihu’s fundamentals are attractive. In this note, we present our forecasts and take the first look at Zhihu's potential valuation. </span></p></div>
</div>


Zhihu Technology (ZH US) is the largest Q&amp;A-inspired online community and one of the top five comprehensive online content communities in China, both in terms of average mobile MAUs and revenue in 2020, according to CIC. Zhihu is acknowledged as the first choice among all online content communities in China where people look for information to make decisions or find answers, according to CIC. Zhihu is backed by Tencent Holdings (700 HK), Kuaishou Technology (1024 HK) and Baidu (BIDU US).
Zhihu is pre-marketing an NYSE IPO to raise proceeds of $1 billion, according to press reports. In Zhihu IPO Initiation: Question Time, we opined that as the largest Q&amp;A-inspired online community, Zhihu is well-positioned to benefit from favourable industry trends. We concluded that Zhihu’s fundamentals are attractive. In this note, we present our forecasts and take the first look at Zhihu's potential valuation. 


China

Kuaishou Technology operates as a content community and social platform. The Company helps users create, upload and watch short videos on mobile devices. Kuaishou Technology offers services worldwide.

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Kuaishou Technology (1024 HK)

Bilibili: Diversified Revenue Streams and Impressive Top Line Growth Justify Current Multiples

we believe Bilibili should be considered as a comprehensive internet stock rather than a streaming platform given its growing exposure into other...

Shifara Samsudeen, FCMA, CGMA

Bilibili Secondary Listing - Volatile but Should Be Hot

Bilibili plans to raise around US$3bn in its secondary listing in Hong Kong. We have covered the background of the deal in our earlier notes. In...

Sumeet Singh

Bilibili Secondary Listing: A Big-Sum Game

Bilibili could raise up to $3 bn through a secondary listing, according to press reports. It is fairly valued at the last close and would look at...

Arun George

Kuaishou (1024 HK): Expanding Ad Mkt for 2020 and Anime Plan for 2021, but Needs Reasonable Price

We believe revenue will grow by 48% in 2020 and 56% in 2021. “Electricity generation plan” is coming and ad mkt is expanding. But we believe the...

Ming Lu

Zhihu IPO: Valuation First Look

Zhihu is pre-marketing an NYSE IPO to raise proceeds of $1 billion, according to press reports. In this note, we present our forecasts and take the...

Arun George

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