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

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-resources-beer-holdings" target="_blank" data-smartkarma-citation="entities:399:1" rel="noopener">China Resources Beer Holdings (291 HK)</a>, <a href="https://www.smartkarma.com/entities/enn-energy-holdings-ltd" target="_blank" data-smartkarma-citation="entities:316:1" rel="noopener">ENN Energy (2688 HK)</a>, <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com Inc. (9618 HK)</a> and <a href="https://www.smartkarma.com/entities/netease" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a> will be added to the HSI at the close on 3 December.</li>
<li>One-Way turnover is estimated at 5.05% and will result in a one-way trade of HK$10.1bn due to the inclusions, float changes and capping changes.</li>
<li>Currently at 64 members, Hang Seng Indexes is unlikely to reach its 80 index constituent target for the HSI by mid 2022 and the timeline is likely to be extended.</li>
</ul>



China Resources Beer Holdings (291 HK), ENN Energy (2688 HK), JD.com Inc. (9618 HK) and NetEase (9999 HK) will be added to the HSI at the close on 3 December.
One-Way turnover is estimated at 5.05% and will result in a one-way trade of HK$10.1bn due to the inclusions, float changes and capping changes.
Currently at 64 members, Hang Seng Indexes is unlikely to reach its 80 index constituent target for the HSI by mid 2022 and the timeline is likely to be extended.


HSI Index Rebalance: Tiptoeing to the 80 Index Member Target

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

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 Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a> shares dropped 11.1% yesterday on rather disappointing 2QFY22 earnings which saw the company’s operating profit tumble 32% YoY.</li>
<li>Driven by the ongoing regulatory pressure and the Chinese government’s push for common prosperity measures, the Core-Commerce segment's revenue growth and operating margins have fallen below the pre-COVID trend line.</li>
<li>Although the valuation multiples look cheap compared to history, there's a possibility for multiples to drop another 50%, especially if the regulatory environment remains the same.</li>
</ul>



Alibaba Group (9988 HK) shares dropped 11.1% yesterday on rather disappointing 2QFY22 earnings which saw the company’s operating profit tumble 32% YoY.
Driven by the ongoing regulatory pressure and the Chinese government’s push for common prosperity measures, the Core-Commerce segment's revenue growth and operating margins have fallen below the pre-COVID trend line.
Although the valuation multiples look cheap compared to history, there's a possibility for multiples to drop another 50%, especially if the regulatory environment remains the same.


Alibaba: The Commerce Segment Weakens Amidst Government Scrutiny

ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<ul>
<li>
<a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a> released yet another knockout set of results in 3Q2021, representing the ninth quarter of triple-digit growth in GAAP sales plus management upgraded FY2021 guidance.</li>
<li>Key positives include e-commerce loss per order declining further in 3Q2021, take-rates improving further, marketplace revenues growing +151% YoY in 3Q2021 and good progress made in new markets. </li>
<li>Gaming adjusted EBITDA continues to cover losses from e-commerce despite slower growth from digital entertainment. We see the post-results correction as an opportunity to accumulate <a href="https://www.smartkarma.com/entities/sea-ltd" target="_blank" data-smartkarma-citation="entities:8509:1" rel="noopener">Sea Ltd (SE US)</a>. </li>
</ul>



Sea Ltd (SE US) released yet another knockout set of results in 3Q2021, representing the ninth quarter of triple-digit growth in GAAP sales plus management upgraded FY2021 guidance.
Key positives include e-commerce loss per order declining further in 3Q2021, take-rates improving further, marketplace revenues growing +151% YoY in 3Q2021 and good progress made in new markets. 
Gaming adjusted EBITDA continues to cover losses from e-commerce despite slower growth from digital entertainment. We see the post-results correction as an opportunity to accumulate Sea Ltd (SE US). 


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>Cloud Village Inc. (CVI), also known as NetEase Music, now plans to raise around US$500m in its Hong Kong IPO. </li>
<li>The company has also obtained investments from Baidu and Alibaba, along with other investors.</li>
<li>In this note, we will talk about the updates from the revised PHIP filing and relook at valuations.</li>
</ul>


Cloud Village Inc. (CVI), also known as NetEase Music, now plans to raise around US$500m in its Hong Kong IPO. 
The company has also obtained investments from Baidu and Alibaba, along with other investors.
In this note, we will talk about the updates from the revised PHIP filing and relook at valuations.


Cloud Village (NetEase Music) Pre-IPO - Revised PHIP Updates, Along with Revised Valuation

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

<ul>
<li>Game revenue recovered due to the new game, <em>“Harry Potter: Magic Awakened”</em>.</li>
<li>Surprisingly, <a href="https://www.smartkarma.com/entities/youdao-inc" target="_blank" data-smartkarma-citation="entities:28315:1" rel="noopener">Youdao, Inc. (DAO US)</a> did not shrink under the pressure of new policy. </li>
<li>We believe both revenue growth and operating margin will rise in 2022.</li>
</ul>


Game revenue recovered due to the new game, “Harry Potter: Magic Awakened”.
Surprisingly, Youdao, Inc. (DAO US) did not shrink under the pressure of new policy. 
We believe both revenue growth and operating margin will rise in 2022.


NetEase (NTES): 3Q21, Magic Awakened by Harry Potter

China

NetEase, Inc. operates as an leading internet technology company providing online services including content, community, communication, and commerce. The Company develops and operates online games, electronic commerce, internet media, innovative business, and other businesses. NetEase expands its businesses to Japan, North American, and other other international markets.

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NetEase (9999 HK)

HSI Index Rebalance: Tiptoeing to the 80 Index Member Target

CR Beer, ENN Energy, JD.com & Netease will join the HSI after the close on 3 Dec. Some were expected, some are surprises. Turnover is 5%+ & the...

Brian Freitas

Alibaba: The Commerce Segment Weakens Amidst Government Scrutiny

Driven by the ongoing regulatory pressure and the Chinese government’s push for common prosperity measures, the Core-Commerce segment's revenue...

Oshadhi Kumarasiri

Sea Ltd (SE US) - The Sails Are Set

Sea Ltd (SE US) released knockout results in 3Q2021, representing the 9th quarter of triple-digit growth in GAAP sales plus management upgraded...

Angus Mackintosh

Cloud Village (NetEase Music) Pre-IPO - Revised PHIP Updates, Along with Revised Valuation

Cloud Village Inc. (CVI), also known as NetEase Music, now plans to raise around US$500m in its Hong Kong IPO. In this note, we talk about the...

Sumeet Singh

NetEase (NTES): 3Q21, Magic Awakened by Harry Potter

The new game, “Harry Potter: Magic Awakened”, is successful. Surprisingly, Youdao did not shrink under the new policy. We believe both revenue...

Ming Lu

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