Equity Research Analyst - Long-Short

Raj S, CA, CFA

Equity Bottom-Up

<ul>
<li>Meitu’s business model is not threatened by new AI image generation models. Long-term positioning remains intact. Last-mile workflows, a seventeen-year aesthetic dataset, and stable founder-led execution sustainable clear Moats.</li>
<li>Overseas markets offer materially higher pay-ratios and ARPU. Productivity and e-commerce tools drive the mix shift toward high-margin growth. Both support multi-year revenue compounding independent of AI capex cycles.</li>
<li>Recent Correction due to AI substitution fears drove the multiple to ~27x, placing PEG below 1x on 30% CAGR. Long-term buy with 100% upside and potential for strong re-rating.</li>
</ul>


Meitu’s business model is not threatened by new AI image generation models. Long-term positioning remains intact. Last-mile workflows, a seventeen-year aesthetic dataset, and stable founder-led execution sustainable clear Moats.
Overseas markets offer materially higher pay-ratios and ARPU. Productivity and e-commerce tools drive the mix shift toward high-margin growth. Both support multi-year revenue compounding independent of AI capex cycles.
Recent Correction due to AI substitution fears drove the multiple to ~27x, placing PEG below 1x on 30% CAGR. Long-term buy with 100% upside and potential for strong re-rating.


Meitu Inc (1357 HK): AI a Threat? Not Really - Long-Term Compounder Driven by Dual Growth Engines

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/meitu-inc" target="_blank" data-smartkarma-citation="entities:23573:1" rel="noopener">Meitu Inc (1357 HK)</a>'s stock price has more than tripled over the last few months and the significantly higher market cap should lead to global index inclusion in August. </li>
<li>Shorts covered a lot in 2024 and that has continued this year as the stock price has moved higher.</li>
<li>
<a href="https://www.smartkarma.com/entities/meitu-inc" target="_blank" data-smartkarma-citation="entities:23573:1" rel="noopener">Meitu Inc (1357 HK)</a> has outperformed its peers significantly and there could be a pullback in the stock following index inclusion.</li>
</ul>



Meitu Inc (1357 HK)'s stock price has more than tripled over the last few months and the significantly higher market cap should lead to global index inclusion in August. 
Shorts covered a lot in 2024 and that has continued this year as the stock price has moved higher.

Meitu Inc (1357 HK) has outperformed its peers significantly and there could be a pullback in the stock following index inclusion.


Meitu (1357 HK): AI-Driven Global Index Inclusion

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>
<a href="https://www.smartkarma.com/entities/jingdong-jd-industrials-inc" target="_blank" data-smartkarma-citation="entities:36875:1" rel="noopener">JD Industrials (7618 HK)</a> is now looking to raise up to US$421m, in its Hong Kong IPO.</li>
<li>JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.</li>
<li>We looked at the company’s past performance in our earlier notes. In this note, we talk about valuations.</li>
</ul>



JD Industrials (7618 HK) is now looking to raise up to US$421m, in its Hong Kong IPO.
JDI is a leading industrial supply chain technology and service provider in China in terms of GMV in each year during the Track Record Period, according to CIC.
We looked at the company’s past performance in our earlier notes. In this note, we talk about valuations.


JD Industrials IPO - Valuation Cut Means Its Priced to Go

Mao Geping Cosmetics / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/mao-geping-cosmetics-co-ltd-41b64ec7-42e1-4d89-9424-b63b5ba53ea4" target="_blank" data-smartkarma-citation="entities:1521:1" rel="noopener">Mao Geping Cosmetics (1318 HK)</a> raised around US$345m in its Hong Kong IPO. The lockup on its founders and pre-IPO investors is set to expire soon.</li>
<li>Mao Geping Cosmetics (MGC) operates in the premium beauty segment. Via its two brands, MAOGEPING and Love Keeps, the firm offers a wide range of Color cosmetics and Skincare products.</li>
<li>In this note, we will talk about the lockup dynamics and possible placement.</li>
</ul>



Mao Geping Cosmetics (1318 HK) raised around US$345m in its Hong Kong IPO. The lockup on its founders and pre-IPO investors is set to expire soon.
Mao Geping Cosmetics (MGC) operates in the premium beauty segment. Via its two brands, MAOGEPING and Love Keeps, the firm offers a wide range of Color cosmetics and Skincare products.
In this note, we will talk about the lockup dynamics and possible placement.


Mao Geping IPO Lockup - US$4.7bn Lockup Release for Founders and Pre-IPO Investors

Ping An Healthcare and Technology / Index Rebalance

<ul>
<li>The review period for the December rebalance of the CSI Overseas China Internet Index ended 31 October. The changes should be announced 28 November and implemented close on 12 December.</li>
<li>There could be 6 inclusions for the <a href="https://www.smartkarma.com/entities/kraneshares-csi-china-internet-etf" target="_blank" data-smartkarma-citation="entities:28208:1" rel="noopener">KraneShares CSI China Internet ETF (KWEB US)</a> in December with most inclusions being high probability.</li>
<li>Impact on the inclusions varies between 1.3-5 days of ADV. There will be stocks with float increases and some capping changes.</li>
</ul>


The review period for the December rebalance of the CSI Overseas China Internet Index ended 31 October. The changes should be announced 28 November and implemented close on 12 December.
There could be 6 inclusions for the KraneShares CSI China Internet ETF (KWEB US) in December with most inclusions being high probability.
Impact on the inclusions varies between 1.3-5 days of ADV. There will be stocks with float increases and some capping changes.


KWEB Index Rebalance Preview: Bunch of Potential Inclusions in December

China

Meitu, Inc. offers mobile application software. The Company researches, produces, and markets image editing, live broadcasting, and other related social software. Meitu Inc also participate in mobile designing and retailing around the world.

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Meitu Inc (1357 HK)

Meitu Inc (1357 HK): AI a Threat? Not Really - Long-Term Compounder Driven by Dual Growth Engines

Meitu's business model remains strong and AI image generation threat is overdone, with overseas markets and e-comm vertical being growth drivers....

Raj S, CA, CFA

Meitu (1357 HK): AI-Driven Global Index Inclusion

Meitu could be added to a global index in August as its AI forays pay off. The recently announced positive profit alert could sustain momentum....

Brian Freitas

JD Industrials IPO - Valuation Cut Means Its Priced to Go

JD Industrials (7618 HK) is now looking to raise up to US$421m, in its Hong Kong IPO. In this note, we talk about valuations.

Sumeet Singh

Mao Geping IPO Lockup - US$4.7bn Lockup Release for Founders and Pre-IPO Investors

Mao Geping Cosmetics (1318 HK) raised around US$345m in its Hong Kong IPO. The lockup on its founders and pre-IPO investors is set to expire soon.

Sumeet Singh

KWEB Index Rebalance Preview: Bunch of Potential Inclusions in December

There could be 6 adds for the KWEB ETF in Dec, plus float increase for Healthyway and capping changes for the large stocks. CaoCao is newly...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Meitu Inc (1357 HK): AI a Threat? Not Really - Long-Term Compounder Driven by Dual Growth Engines

​Meitu's business model remains strong and AI image generation threat is overdone, with overseas markets and e-comm vertical being growth drivers....

Raj S, CA, CFA

Meitu (1357 HK): AI-Driven Global Index Inclusion

Meitu could be added to a global index in August as its AI forays pay off. The recently announced positive profit alert could sustain momentum....

Brian Freitas

JD Industrials IPO - Valuation Cut Means Its Priced to Go

JD Industrials (7618 HK) is now looking to raise up to US$421m, in its Hong Kong IPO. In this note, we talk about valuations.

Sumeet Singh

Mao Geping IPO Lockup - US$4.7bn Lockup Release for Founders and Pre-IPO Investors

Mao Geping Cosmetics (1318 HK) raised around US$345m in its Hong Kong IPO. The lockup on its founders and pre-IPO investors is set to expire soon.

Sumeet Singh

KWEB Index Rebalance Preview: Bunch of Potential Inclusions in December

There could be 6 adds for the KWEB ETF in Dec, plus float increase for Healthyway and capping changes for the large stocks. CaoCao is newly...

Brian Freitas

Meitu's business model remains strong and AI image generation threat is overdone, with overseas markets and e-comm vertical being growth drivers....