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

Kuaishou Technology / Equity Capital Markets

<p>The Chinese short video and live streaming platform, <a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Beijing Kuaishou Technology Co Ltd (1496219D CH)</a>  has filed for an IPO to list its shares on the Hong Kong Stock Exchange. The company aims to raise up to US$5bn at a rumoured valuation of around US$50-60bn.</p><p>In our previous insights on the company’s IPO, we examined the company’s business model, segments, financials and outlook. Refer the following extract from our previous insight:</p><div class="content-highlight"><p><em>As we discussed in our previous insights, we remain positive on the company’s growth prospects. Though the company’s live streaming revenues show a slight decline in 3Q2020 compared to the same quarter last year, as the company stated we believe it was due to changes in the customer spending habits. As we highlighted in our previous insights, it seems that the company’s monetisation strategy has worked in favour where revenues from online marketing services and other services have grown rapidly during the period. The huge increase in the e-commerce GMV in fact proves that the company’s e-commerce business is rapidly expanding thereby contributing to the growth in the company’s top line. Our cost and margin analysis also shows that Kuaishou should start generating stable profits over the next few quarters</em></p></div><p>Kuaishou’s closest peer is ByteDance-owned Douyin, however, given Douyin’s financial statements are not publicly available and the company is not listed, we would be comparing the company against its peer <a href="https://www.smartkarma.com/entities/momo-inc" target="_blank" data-smartkarma-citation="entities:26075:1" rel="noopener">Momo Inc (MOMO US)</a> . (Only the financials of Momo platform).</p>

The Chinese short video and live streaming platform, Beijing Kuaishou Technology Co Ltd (1496219D CH)  has filed for an IPO to list its shares on the Hong Kong Stock Exchange. The company aims to raise up to US$5bn at a rumoured valuation of around US$50-60bn.In our previous insights on the company’s IPO, we examined the company’s business model, segments, financials and outlook. Refer the following extract from our previous insight:As we discussed in our previous insights, we remain positive on the company’s growth prospects. Though the company’s live streaming revenues show a slight decline in 3Q2020 compared to the same quarter last year, as the company stated we believe it was due to changes in the customer spending habits. As we highlighted in our previous insights, it seems that the company’s monetisation strategy has worked in favour where revenues from online marketing services and other services have grown rapidly during the period. The huge increase in the e-commerce GMV in fact proves that the company’s e-commerce business is rapidly expanding thereby contributing to the growth in the company’s top line. Our cost and margin analysis also shows that Kuaishou should start generating stable profits over the next few quartersKuaishou’s closest peer is ByteDance-owned Douyin, however, given Douyin’s financial statements are not publicly available and the company is not listed, we would be comparing the company against its peer Momo Inc (MOMO US) . (Only the financials of Momo platform).

Kuaishou IPO: Broadly Outperforming Peers; Profits Should Materialise as Sales and Marketing Falls

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>Kuaishou Technology (KT) is a content community and social platform that is looking to raise around US$5bn in its Hong Kong IPO. The company is backed by Tencent, Sequoia China, Baidu, DST Global, Boyu Capital, Temasek and others.</p></div><div><p>As of six months ended Jun 2020, it had 302m daily active users (DAUs), who spent 85 mins on average on the app every day. It also had 776m monthly active users (MAUs) and total e-commerce GMV of RMB109.6bn. On an average 1.1bn short videos were uploaded on its app during 1H20.</p></div><div><p>As per iResearch, Kuaishou was globally the largest live streaming platform by gross billings from virtual gifting and average live streaming MPUs, the second largest short video platform by average DAUs, and the second largest live streaming e-commerce platform by GMV, over six months ended June 30, 2020.</p></div><div><p>I have covered various aspects of the company’s performance in my previous notes: </p></div><div><ul style="list-style-type: disc;">
<li> <a href="https://www.smartkarma.com/insights/kuaishou-technology-pre-ipo-the-positives-hot-segment-fast-growth" target="_blank" rel="noopener">Kuaishou Technology Pre-IPO - The Positives - Hot Segment, fast growth</a>
</li>
<li><a href="https://www.smartkarma.com/insights/kuaishou-technology-pre-ipo-the-negatives-ample-doubts-remain" target="_blank" rel="noopener">Kuaishou Technology Pre-IPO - The Negatives - Ample Doubts Remain</a></li>
<li><a href="https://www.smartkarma.com/insights/kuaishou-technology-pre-ipo-peer-comparison-and-thoughts-on-valuation" target="_blank" rel="noopener">Kuaishou Technology Pre-IPO - Peer Comparison and Thoughts on Valuation</a></li>
</ul></div><div><p>In this note, I’ll cover the updates from its recently filed PHIP.</p></div>

Kuaishou Technology (KT) is a content community and social platform that is looking to raise around US$5bn in its Hong Kong IPO. The company is backed by Tencent, Sequoia China, Baidu, DST Global, Boyu Capital, Temasek and others.As of six months ended Jun 2020, it had 302m daily active users (DAUs), who spent 85 mins on average on the app every day. It also had 776m monthly active users (MAUs) and total e-commerce GMV of RMB109.6bn. On an average 1.1bn short videos were uploaded on its app during 1H20.As per iResearch, Kuaishou was globally the largest live streaming platform by gross billings from virtual gifting and average live streaming MPUs, the second largest short video platform by average DAUs, and the second largest live streaming e-commerce platform by GMV, over six months ended June 30, 2020.I have covered various aspects of the company’s performance in my previous notes: 
 Kuaishou Technology Pre-IPO - The Positives - Hot Segment, fast growth

Kuaishou Technology Pre-IPO - The Negatives - Ample Doubts Remain
Kuaishou Technology Pre-IPO - Peer Comparison and Thoughts on Valuation
In this note, I’ll cover the updates from its recently filed PHIP.

Kuaishou Technology Pre-IPO - PHIP Updates - User Growth Has Been Slowing Down Post COVID

<p>Kuaishou Technology (KT) is a content community and social platform that is looking to raise around US$5bn in its Hong Kong IPO. The company is backed by Tencent, Sequoia China, Baidu, DST Global, Boyu Capital, Temasek and others.</p><p>As of six months ended Jun 2020, it had 302m daily active users (DAUs), who spent 85 mins on average on the app every day. It also had 776m monthly active users (MAUs) and total e-commerce GMV of RMB109.6bn. On an average 1.1bn short videos were uploaded on its app during 1H20.</p><p>As per iResearch, Kuaishou was globally the largest live streaming platform by gross billings from virtual gifting and average live streaming MPUs, the second largest short video platform by average DAUs, and the second largest live streaming e-commerce platform by GMV, over six months ended June 30, 2020.</p><p>I have covered various aspects of the company’s performance in my previous notes: </p><ul>
<li> <a href="https://www.smartkarma.com/insights/kuaishou-technology-pre-ipo-the-positives-hot-segment-fast-growth" target="_blank" rel="noopener">Kuaishou Technology Pre-IPO - The Positives - Hot Segment, fast growth</a>
</li>
<li><a href="https://www.smartkarma.com/insights/kuaishou-technology-pre-ipo-the-negatives-ample-doubts-remain" target="_blank" rel="noopener">Kuaishou Technology Pre-IPO - The Negatives - Ample Doubts Remain</a></li>
</ul><p>In this note, I’ll undertake a peer comparison, provide earnings forecasts and talk about valuations. </p>

Kuaishou Technology (KT) is a content community and social platform that is looking to raise around US$5bn in its Hong Kong IPO. The company is backed by Tencent, Sequoia China, Baidu, DST Global, Boyu Capital, Temasek and others.As of six months ended Jun 2020, it had 302m daily active users (DAUs), who spent 85 mins on average on the app every day. It also had 776m monthly active users (MAUs) and total e-commerce GMV of RMB109.6bn. On an average 1.1bn short videos were uploaded on its app during 1H20.As per iResearch, Kuaishou was globally the largest live streaming platform by gross billings from virtual gifting and average live streaming MPUs, the second largest short video platform by average DAUs, and the second largest live streaming e-commerce platform by GMV, over six months ended June 30, 2020.I have covered various aspects of the company’s performance in my previous notes: 
 Kuaishou Technology Pre-IPO - The Positives - Hot Segment, fast growth

Kuaishou Technology Pre-IPO - The Negatives - Ample Doubts Remain
In this note, I’ll undertake a peer comparison, provide earnings forecasts and talk about valuations. 

Kuaishou Technology Pre-IPO - Peer Comparison and Thoughts on Valuation

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.

<div>
<p><a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Beijing Kuaishou Technology Co Ltd (1496219D CH)</a> is the second-largest short video platform by average DAUs (daily active users) in 1H20, according to iResearch. Users access the platform primarily through a family of mobile apps comprising <em>Kuaishou Flagship, Kuaishou Express</em> and <em>Kuaishou Concept</em>, which is collectively referred to as the Kuaishou App.</p>
<p>Kuaishou is seeking to raise $5 billion at a $50 billion valuation as early as this month, according to press reports. The rumoured valuation is a significant increase to the January 2020 Series F round - a raise of $3 billion at a $28-30 billion valuation, according to press reports. </p>
</div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/kuaishou-ipo-initiation-dancing-to-its-own-tune" target="_blank" data-smartkarma-citation="insights:45032" rel="noopener">Kuaishou IPO Initiation: Dancing to Its Own Tune</a>, we opined that Kuaishou offers public market investors the first opportunity to gain direct exposure to China’s short-video platform market. While Kuaishou’s performance over the track record period is distorted due to various factors, we believe that the underlying fundamentals are attractive. In this note, we take a first look at Kuaishou's valuation. Overall, based on valuation analysis, we think that the rumoured IPO valuation can be justified.</p></div></div></div>


Beijing Kuaishou Technology Co Ltd (1496219D CH) is the second-largest short video platform by average DAUs (daily active users) in 1H20, according to iResearch. Users access the platform primarily through a family of mobile apps comprising Kuaishou Flagship, Kuaishou Express and Kuaishou Concept, which is collectively referred to as the Kuaishou App.
Kuaishou is seeking to raise $5 billion at a $50 billion valuation as early as this month, according to press reports. The rumoured valuation is a significant increase to the January 2020 Series F round - a raise of $3 billion at a $28-30 billion valuation, according to press reports. 
In Kuaishou IPO Initiation: Dancing to Its Own Tune, we opined that Kuaishou offers public market investors the first opportunity to gain direct exposure to China’s short-video platform market. While Kuaishou’s performance over the track record period is distorted due to various factors, we believe that the underlying fundamentals are attractive. In this note, we take a first look at Kuaishou's valuation. Overall, based on valuation analysis, we think that the rumoured IPO valuation can be justified.

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

Equity Bottom-Up

<ul>
<li>The State Administration of Market Regulation (SAMR) formally started the investigation into the anti-monopoly of Alibaba (BABA) and Summoned Ant Group's management again.</li>
<li>JD Digits (JDD) changed CEO in the process of IPO due to the situation its competitor, Ant Group, is facing.</li>
<li>Youzu.com (002174 CN)’s founder was poisoned to death by his subordinate.</li>
<li>Baidu (BIDU) made a poster to call on students and their parents to boycott TikTok.</li>
</ul>


The State Administration of Market Regulation (SAMR) formally started the investigation into the anti-monopoly of Alibaba (BABA) and Summoned Ant Group's management again.
JD Digits (JDD) changed CEO in the process of IPO due to the situation its competitor, Ant Group, is facing.
Youzu.com (002174 CN)’s founder was poisoned to death by his subordinate.
Baidu (BIDU) made a poster to call on students and their parents to boycott TikTok.


China Internet Weekly (28Dec2020): BABA Investigated, Ant Warned, Youzu Founder Poisoned to Death

China

Hello Group Inc. operates as a mobile-based social networking platform. The Company enables users to establish and expand social relationships based on location and interests. Hello Group operates out of the Peoples Republic of China.

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Hello Group (MOMO US)

Kuaishou IPO: Broadly Outperforming Peers; Profits Should Materialise as Sales and Marketing Falls

In this insight, we compare Kuaishou's financials and key matrices against its peer Momo Inc. (Only the financials of Momo platform).

Shifara Samsudeen, FCMA, CGMA

Kuaishou Technology Pre-IPO - PHIP Updates - User Growth Has Been Slowing Down Post COVID

Kuaishou Technology (KT) is a content community and social platform that is looking to raise around US$5bn in its Hong Kong IPO. The company is...

Sumeet Singh

Kuaishou Technology Pre-IPO - Peer Comparison and Thoughts on Valuation

Kuaishou is a content community and social platform that is looking to raise around US$5bn in its Hong Kong IPO. The company is backed by Tencent,...

Sumeet Singh

Kuaishou IPO: Valuation First Look

Kuaishou is seeking to raise $5 billion at a $50 billion valuation as early as this month. Overall, based on valuation analysis, we think that the...

Arun George

China Internet Weekly (28Dec2020): BABA Investigated, Ant Warned, Youzu Founder Poisoned to Death

The State Administration of Market Regulation investigated Alibaba and Summoned Ant Group's management. JD Digits (JDD) changed CEO in the process...

Ming Lu

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