Research from EqualOcean, EqualOcean

EqualOcean

Research from EqualOcean

EqualOcean is an investment research firm and information service provider focusing on China's Technology, Automotive and Consumer Internet sectors. With unique research and due diligence methodology, we provide tailored insights into a wide range of industries and companies, empowering our clients' value-added decisions.

Founded in 2014, EqualOcean is headquartered in Beijing and has offices in Shanghai, Shenzhen and New York.

Thematic (Sector/Industry)

<ul><li>An eventful year - The semiconductor shortage is both accidental and inevitable</li><li>Dawn in 2022 - The crunch is likely to be relieved in 2022 but it will take years to fully meet the industry's needs. </li><li>Favored electric cars - Albeit auto brands can't get components on time, many of them are now prioritizing EV production. </li></ul>

An eventful year - The semiconductor shortage is both accidental and inevitableDawn in 2022 - The crunch is likely to be relieved in 2022 but it will take years to fully meet the industry's needs. Favored electric cars - Albeit auto brands can't get components on time, many of them are now prioritizing EV production. 

Tesla Can Deal with Supply Chain Shortage, Unlike Most Chinese Peers

<ul>
<li>Despite a great Q3 overall, Tesla in China sees demand reduce as competitors begin to catch up.</li>
<li>Domestic brands are gaining on Tesla's share of Chinese EV market</li>
<li>More players both new and old - Nonetheless, as other emerging players begin to throw their hat in the ring like Xiaomi, Evergrande Auto, as well as international makers like Volkswagen and Toyota, there could be less room for Tesla to dominate demand.</li>
</ul>


Despite a great Q3 overall, Tesla in China sees demand reduce as competitors begin to catch up.
Domestic brands are gaining on Tesla's share of Chinese EV market
More players both new and old - Nonetheless, as other emerging players begin to throw their hat in the ring like Xiaomi, Evergrande Auto, as well as international makers like Volkswagen and Toyota, there could be less room for Tesla to dominate demand.


Tesla's Record Revenue in Q3 Reflective of China's Solid EV Foundation

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>Weibo plans to raise around US$500-700m in its secondary listing in Hong Kong. </li>
<li>The company won listing approval and filed its PHIP on last week and will look to launch its secondary offering soon.</li>
<li>In this note, we’ll take a look at the deal and talk about the impact of the raising.</li>
</ul>


Weibo plans to raise around US$500-700m in its secondary listing in Hong Kong. 
The company won listing approval and filed its PHIP on last week and will look to launch its secondary offering soon.
In this note, we’ll take a look at the deal and talk about the impact of the raising.


Weibo Secondary Listing - Needs to Come at a Discount

China Specialist, Auto and Industrial Specialist

Victoria Li

<ul>
<li>Auto supply chain issue, including chip shortage, might be worse in 2022E. Local brands might keep gaining market share due to their higher localisation rates</li>
<li>NEV models would continue gaining market shares as they are affected less by chip shortage and more cost friendly when global fuel cost surges</li>
<li>Among three listed EV players, Xpeng (XPEV.US, 9868.HK) has the biggest upside on sales/earnings growth, while NIO(NIO.US) has the biggest uncertainty. </li>
</ul>


Auto supply chain issue, including chip shortage, might be worse in 2022E. Local brands might keep gaining market share due to their higher localisation rates
NEV models would continue gaining market shares as they are affected less by chip shortage and more cost friendly when global fuel cost surges
Among three listed EV players, Xpeng (XPEV.US, 9868.HK) has the biggest upside on sales/earnings growth, while NIO(NIO.US) has the biggest uncertainty. 


Forensic Analyst

Jason Yap, CFA

Forensic Accounting

On 20 August 2021, the Cyberspace Administration of China and the Ministry of Transport, together with other relevant authorities, jointly issued the Provisions on Management of Automotive Data Security (Trial) ("Auto Data Provisions"). 
The Auto Data Provisions since took effect on 1 October 2021 to limited fanfare, with media headlines instead focused on the Personal Information Protection Law ("PIPL"), which took effect on 1 November 2021, and specific affected sectors, such as <a href="https://www.reuters.com/business/chinese-online-brokers-futu-up-fintech-face-regulatory-risks-peoples-daily-2021-10-14/" target="_blank" rel="noopener">China online brokerages</a>. 
Further, on 29 October 2021, regulators issued <a href="https://asia.nikkei.com/Business/China-tech/China-to-tighten-rules-on-data-transfers-abroad-with-review-trigger" target="_blank" rel="noopener">draft data protection regulations</a> which provide that businesses in China face a national security review prior to transfers outside the country of personal information of 100,000 individuals or more.  The draft consultation period will last through 28 November 2021, following which the directives would likely take effect soon after. 
EVs of today are no longer a mere mode of transport that depend on analog platforms.  As EV companies race to develop autonomous driving technologies, most if not all EV companies now harness vast amounts of users and real-time mobility data.  Think <a href="https://www.smartkarma.com/entities/didi-chuxing-inc" target="_blank" data-smartkarma-citation="entities:27467:1" rel="noopener">DiDi Global (DIDI US)</a>. 
Yet, apart from <a href="https://www.smartkarma.com/entities/tesla-motors-inc" target="_blank" data-smartkarma-citation="entities:20279:1" rel="noopener">Tesla Motors (TSLA US)</a>, Chinese EV manufacturers (all listed in the US) such as <a href="https://www.smartkarma.com/entities/nio-inc" target="_blank" data-smartkarma-citation="entities:27399:1" rel="noopener">NIO Inc (NIO US)</a>, <a href="https://www.smartkarma.com/entities/xpeng-inc" target="_blank" data-smartkarma-citation="entities:29217:1" rel="noopener">Xpeng (XPEV US)</a> and <a href="https://www.smartkarma.com/entities/li-auto-inc" target="_blank" data-smartkarma-citation="entities:28812:1" rel="noopener">Li Auto Inc. (LI US)</a> have remained largely unscathed from the news flow and analysis surrounding data security in China. 
In this Insight, we discuss what the Auto Data Provisions entail, whether Chinese EV companies face any repercussions from tightening of data security laws, and which one is the most at risk.

On 20 August 2021, the Cyberspace Administration of China and the Ministry of Transport, together with other relevant authorities, jointly issued the Provisions on Management of Automotive Data Security (Trial) ("Auto Data Provisions"). 
The Auto Data Provisions since took effect on 1 October 2021 to limited fanfare, with media headlines instead focused on the Personal Information Protection Law ("PIPL"), which took effect on 1 November 2021, and specific affected sectors, such as China online brokerages. 
Further, on 29 October 2021, regulators issued draft data protection regulations which provide that businesses in China face a national security review prior to transfers outside the country of personal information of 100,000 individuals or more.  The draft consultation period will last through 28 November 2021, following which the directives would likely take effect soon after. 
EVs of today are no longer a mere mode of transport that depend on analog platforms.  As EV companies race to develop autonomous driving technologies, most if not all EV companies now harness vast amounts of users and real-time mobility data.  Think DiDi Global (DIDI US). 
Yet, apart from Tesla Motors (TSLA US), Chinese EV manufacturers (all listed in the US) such as NIO Inc (NIO US), Xpeng (XPEV US) and Li Auto Inc. (LI US) have remained largely unscathed from the news flow and analysis surrounding data security in China. 
In this Insight, we discuss what the Auto Data Provisions entail, whether Chinese EV companies face any repercussions from tightening of data security laws, and which one is the most at risk. 

Nio Inc (Nio US) - Automotive Data Security, Delivery Declines and Hefei Investors

China

Li Auto Inc. manufactures automobiles. The Company designs, develops, and sells smart new energy electric sport utility vehicles. Li Auto conducts businesses in China.

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

Li Auto (LI US)

Tesla Can Deal with Supply Chain Shortage, Unlike Most Chinese Peers

BYD is positioned well, too. The global automotive industry is facing a deepening supply chain crisis

EqualOcean

Tesla's Record Revenue in Q3 Reflective of China's Solid EV Foundation

Share prices for Tesla have soared to all-time highs after earnings and amidst reports of a 100,000-car deal with car rental company Hertz.

EqualOcean

Weibo Secondary Listing - Needs to Come at a Discount

Weibo plans to raise around US$500-700m in its secondary listing in Hong Kong. In this note, we talk about the deal and its impact.

Sumeet Singh

China Auto Sector Outlook 2022E

Auto supply chain issue, including chip shortage, might be worse in 2022E. Local brands might keep gaining market share due to their higher...

Victoria Li

Nio Inc (Nio US) - Automotive Data Security, Delivery Declines and Hefei Investors

In this Insight, we discuss the impact of tightening auto data security laws, Oct 2021 delivery declines and residual Hefei investors risks on Nio...

Jason Yap, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)