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>Nikkei reports that a high ranking CCP official has suggested that the platforms possessing personal data should return around 20-30% of the revenue generated to the common prosperity cause. </li>
<li>We expect big tech to lose competitiveness as the government takes control of the use of personal data. Meanwhile the Chinese economic slowdown is a double blow to big tech. </li>
<li>If remaining investors lose faith and exit, big tech can trade at around 1.0-1.5x price to book in the next few years.</li>
</ul>


Nikkei reports that a high ranking CCP official has suggested that the platforms possessing personal data should return around 20-30% of the revenue generated to the common prosperity cause. 
We expect big tech to lose competitiveness as the government takes control of the use of personal data. Meanwhile the Chinese economic slowdown is a double blow to big tech. 
If remaining investors lose faith and exit, big tech can trade at around 1.0-1.5x price to book in the next few years.


Forensic Analyst

Jason Yap, CFA

Forensic Accounting

<ul>
<li>A company's earnings is arguably the most important line item on the income statement</li>
<li>Given its relative significance as a barometer of a company's financial and operating performance, the earnings line item is highly susceptible to fraudulent misstatements </li>
<li>In the 2nd of this 3 part series, we discuss Quality of Earnings Shenanigans Key Metrics. We discuss Balance Sheet Health metrics in the next edition of this Insights series. </li>
</ul>


A company's earnings is arguably the most important line item on the income statement
Given its relative significance as a barometer of a company's financial and operating performance, the earnings line item is highly susceptible to fraudulent misstatements 
In the 2nd of this 3 part series, we discuss Quality of Earnings Shenanigans Key Metrics. We discuss Balance Sheet Health metrics in the next edition of this Insights series. 


Forensics 101 - Quality of Earnings Shenanigans and Key Detection Metrics

Research on Tech Companies

Evelyn Zhang

Thematic (Sector/Industry)

<ul>
<li>The competition between Alibaba and JD has been heating up after Alibaba abandoned its "exclusivity requirement”, JD sale GMV increased by 28.4% vs Alibaba only increased by 8.4% YoY.  </li>
<li>Live streaming has become a mainstream sales channel, Douyin and Kuaishou both achieved more than 200% sales increase YoY.  </li>
<li>Influencers and brands are fighting over price setting power. Many brands have opened their own official livestreaming channels this year.</li>
</ul>


The competition between Alibaba and JD has been heating up after Alibaba abandoned its "exclusivity requirement”, JD sale GMV increased by 28.4% vs Alibaba only increased by 8.4% YoY.  
Live streaming has become a mainstream sales channel, Douyin and Kuaishou both achieved more than 200% sales increase YoY.  
Influencers and brands are fighting over price setting power. Many brands have opened their own official livestreaming channels this year.


Equity Research in HK and Mainland China

Li Tang

<ul>
<li>The State Administration for Market Regulation (SAMR) published proposal to prevent large internet platforms from abusing market dominance and harming people’s interests in cities, counties, and grassroots areas.</li>
<li>The proposal urged to monitor cutthroat competition in community group purchases via stringent enforcement and supervision</li>
<li>The proposal formulate plans to restrict disordered capital expansion that can lead to monopolies.</li>
</ul>


The State Administration for Market Regulation (SAMR) published proposal to prevent large internet platforms from abusing market dominance and harming people’s interests in cities, counties, and grassroots areas.
The proposal urged to monitor cutthroat competition in community group purchases via stringent enforcement and supervision
The proposal formulate plans to restrict disordered capital expansion that can lead to monopolies.


China Addresses Issues with Community Group Purchase Platforms

Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

<ul>
<li>
An NDR About Nothing: A competitor held a non-deal roadshow for Tencent Holdings (700.HK) [Tencent]. Management only addressed matters discussed at its challenged 3Q21 results; </li>
<li>
Elephant In The Room:Management continues to avoid any serious discussion of  mainland China’s broad restrictions on FinTech – which represents a growing 30.4% of revenue; and </li>
<li>
Stop The Spin Doctoring:No matter Tencent’s spin, a financial holding company represents significant downside risks as earnings will compress and capital requirements increase.</li>
</ul>



An NDR About Nothing: A competitor held a non-deal roadshow for Tencent Holdings (700.HK) [Tencent]. Management only addressed matters discussed at its challenged 3Q21 results; 

Elephant In The Room:Management continues to avoid any serious discussion of  mainland China’s broad restrictions on FinTech – which represents a growing 30.4% of revenue; and 

Stop The Spin Doctoring:No matter Tencent’s spin, a financial holding company represents significant downside risks as earnings will compress and capital requirements increase.


Tencent Holdings – Seinfeld-Ian Roadshow

China

PDD Holdings Inc. is a multinational commerce group that owns and operates a portfolio of businesses. The Company focuses on digital economy so that local communities and small businesses can benefit from the increased productivity and new opportunities. PDD Holdings has built a network of sourcing, logistics, and fulfillment capabilities for its underlying businesses.

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PDD Holdings (PDD US)

China Considering a Data Tax on Big Tech

Investors are starting to rethink their investments in the Chinese tech space and the idea that investors should avoid Chinese tech stocks amidst...

Oshadhi Kumarasiri

Forensics 101 - Quality of Earnings Shenanigans and Key Detection Metrics

Given its significance as a barometer of a company's performance, the earnings line item is susceptible to fraudulent misstatements. We discuss...

Jason Yap, CFA

A Quiet Single Day

Another year another Single's Day, but the pandemic has put a damper on this year's shopping bonanza. Faced with a shrinking pie, a new player is...

Evelyn Zhang

China Addresses Issues with Community Group Purchase Platforms

We think the statement shows the SAMR is investigating the community group purchase market, which could mean there will soon be standardised rules...

Li Tang

Tencent Holdings – Seinfeld-Ian Roadshow

TENCENT: Tencent addressed matters it had already discussed at its challenged 3Q21 results. Unfortunately there was no serious discussion of...

Thomas J. Monaco

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