Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In mid-August at mid-day, a Reuters <a href="https://www.reuters.com/markets/deals/exclusive-tencent-plans-divest-24-bln-meituan-stake-sources-2022-08-16/" target="_blank" rel="noopener">article</a> suggested <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> would seek to divest its $24bn stake in <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> this year. The stock fell 9% that afternoon.</li>
<li>The general underlying suggestion was that regulators wanted them to sell. Other articles suggested later both aspects were "untrue" </li>
<li>With Q3 earnings, Tencent today <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2022/1116/2022111600357.pdf" target="_blank" rel="noopener">announced</a> a Jan23 distribution (Mar23 settlement) of 958,121,562 Meituan shares (1 for every 10 Tencent shares held). There are significant flow and index implications.</li>
</ul>


In mid-August at mid-day, a Reuters article suggested Tencent (700 HK) would seek to divest its $24bn stake in Meituan (3690 HK) this year. The stock fell 9% that afternoon.
The general underlying suggestion was that regulators wanted them to sell. Other articles suggested later both aspects were "untrue" 
With Q3 earnings, Tencent today announced a Jan23 distribution (Mar23 settlement) of 958,121,562 Meituan shares (1 for every 10 Tencent shares held). There are significant flow and index implications.


Tencent Distribution of Meituan Shares Official - Impact and Index Implications

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.

<ul>
<li>On 16th Nov 22, post-market close, along with its 3Q22 results Tencent also declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan.</li>
<li>The share distribution follows the template of the US$16bn worth of JD.com shares that Tencent paid out after its dividend announcement at the end of 2021.</li>
<li>In this note, we talk about the implications of the deal.</li>
</ul>


On 16th Nov 22, post-market close, along with its 3Q22 results Tencent also declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan.
The share distribution follows the template of the US$16bn worth of JD.com shares that Tencent paid out after its dividend announcement at the end of 2021.
In this note, we talk about the implications of the deal.


Tencent Meituan Dividend - The US$20bn Overhang - Impact, Placement, Index, Other Investees

Equity Capital Markets

<ul>
<li>Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.</li>
<li>There was a marked pickup in IPO activity with a number of smaller deals, along with two large deals being launched.</li>
<li>There were no major placements last week. In addition, Prosus single handedly took out two prospective large placements.</li>
</ul>


Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
There was a marked pickup in IPO activity with a number of smaller deals, along with two large deals being launched.
There were no major placements last week. In addition, Prosus single handedly took out two prospective large placements.


ECM Weekly (3rd Jul 2022) - Tianqi, Thai Life, Prosus/Naspers, Tencent, SEA, Soosan, SoCar, Carsales

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 Bottom-Up

<ul>
<li>Tencent’s share price is down 6.5% over the last five days as largest shareholder Prosus sais that it would sell down Tencent shares to fund the buyback of Prosus/Naspers shares.</li>
<li>Though Chinese regulators removed the ban on new game approval in April this year, none of Tencent’s new game titles received approvals in over the last two months.</li>
<li>Tencent’s 1Q2022 earnings were weak and we expect 2Q2022E earnings to further decelerate with resurgence of Covid cases in China alongside weak macroeconomy.</li>
</ul>


Tencent’s share price is down 6.5% over the last five days as largest shareholder Prosus sais that it would sell down Tencent shares to fund the buyback of Prosus/Naspers shares.
Though Chinese regulators removed the ban on new game approval in April this year, none of Tencent’s new game titles received approvals in over the last two months.
Tencent’s 1Q2022 earnings were weak and we expect 2Q2022E earnings to further decelerate with resurgence of Covid cases in China alongside weak macroeconomy.


Tencent: End of Another Quarter with No New Game Approval and Prosus Selling

<ul>
<li>Tencent sold US$3bn worth of SEA shares in Jan 22. The rest of its stake was locked up for six months.</li>
<li>The initial stake sale by Tencent didn’t go down too well and the stock is now trading over 63% below the deal price.</li>
<li>In this note, we will talk about the lock-up dynamics and recent updates.</li>
</ul>


Tencent sold US$3bn worth of SEA shares in Jan 22. The rest of its stake was locked up for six months.
The initial stake sale by Tencent didn’t go down too well and the stock is now trading over 63% below the deal price.
In this note, we will talk about the lock-up dynamics and recent updates.


SEA Lock-Up - Tencent Is once Again About to Be Free to Trim Its US$8bn Stake

China

Prosus N.V. provides internet based services. The Company focuses on investments in internet, digital media, e-commerce retailing, and consumer internet companies. Prosus serves customers worldwide.

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Prosus NV (PRX SJ)

Tencent Distribution of Meituan Shares Official - Impact and Index Implications

Tencent will distribute 90% of its holdings in Meituan in an in-specie distribution, which goes ex- on 5 January and gets settled 24 March 2023....

Travis Lundy

Tencent Meituan Dividend - The US$20bn Overhang - Impact, Placement, Index, Other Investees

On 16th Nov 22, Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan. In this note, we look...

Sumeet Singh

ECM Weekly (3rd Jul 2022) - Tianqi, Thai Life, Prosus/Naspers, Tencent, SEA, Soosan, SoCar, Carsales

Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.

Sumeet Singh

Tencent: End of Another Quarter with No New Game Approval and Prosus Selling

The second quarter of 2022 has not been any great for Tencent as none of its new game titles were included in the approved list while Prosus...

Shifara Samsudeen, FCMA, CGMA

SEA Lock-Up - Tencent Is once Again About to Be Free to Trim Its US$8bn Stake

Tencent sold US$3bn worth of SEA shares in Jan 22. The rest of its stake was locked up for six months, which will soon be over.

Sumeet Singh

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