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

Zhihu Technology / Equity Capital Markets

<p>Known as China’s answer to Quora, <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>  has filed for an IPO to list its shares in the US and according to news media outlets, the company could seek up to US$1bn through the IPO. According to CIC, Zhihu is the largest Q&amp;A-inspired online community and one of the top five comprehensive online content communities in China, in terms of average mobile MAUs and revenues in 2020.</p><p>China’s online content community market is still in early stages and is forecasted to grow at a CAGR of 23.9% over 2019-2025. As the Chinese online content community market offers diversified monetisation channels, Zhihu has been trying to expand its revenue streams through different initiatives such as online advertising, paid memberships, content e-commerce and online education.</p><p>Though the company’s top line has been expanding, Zhihu has not yet been able to make operating profits as the company has been aggressively spending on selling and marketing expenses to expand its user base.</p>

Known as China’s answer to Quora, Zhihu Technology (ZH US)  has filed for an IPO to list its shares in the US and according to news media outlets, the company could seek up to US$1bn through the IPO. According to CIC, Zhihu is the largest Q&amp;A-inspired online community and one of the top five comprehensive online content communities in China, in terms of average mobile MAUs and revenues in 2020.China’s online content community market is still in early stages and is forecasted to grow at a CAGR of 23.9% over 2019-2025. As the Chinese online content community market offers diversified monetisation channels, Zhihu has been trying to expand its revenue streams through different initiatives such as online advertising, paid memberships, content e-commerce and online education.Though the company’s top line has been expanding, Zhihu has not yet been able to make operating profits as the company has been aggressively spending on selling and marketing expenses to expand its user base.

Zhihu IPO: Searching for One-Hit Wonder Amidst Diversified Monetisation Channels

<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

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)

Zhihu IPO: Searching for One-Hit Wonder Amidst Diversified Monetisation Channels

Zhihu is in early stages of monetisation and has been trying to expand its revenue streams through different initiatives such as online...

Shifara Samsudeen, FCMA, CGMA

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

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