TMT & Consumer Independent Equity Research Analyst, Obex Capital Research

Aaron Gabin

TMT & Consumer Independent Equity Research Analyst

TMT & Consumer Independent Equity Research

Obex Capital Research

“Obex” is Latin for Barriers to Entry. Obex Capital Management’s investment philosophy is driven by an intense focus on which business model’s Barriers to Entry are able to withstand the ever increasing competitive disruption in the TMT and Consumer Sectors.

Equity Bottom-Up

<ul>
<li>Spotify disclosed podcasting is a €200M business with -57% gross margins currently, but will go breakeven in 1-2 years, and become GM accretive in 3-5 years.</li>
<li>Spotify put forth outlandish LT targets: 1B MAUs (vs. 422M today), €100B in revenues (vs. $10B today), of which € 10B will be advertising revenue (vs. € 1.2B today).</li>
<li>To hit these targets requires believing in fanciful TAM forecasts, market share, and margins.</li>
</ul>


Spotify disclosed podcasting is a €200M business with -57% gross margins currently, but will go breakeven in 1-2 years, and become GM accretive in 3-5 years.
Spotify put forth outlandish LT targets: 1B MAUs (vs. 422M today), €100B in revenues (vs. $10B today), of which € 10B will be advertising revenue (vs. € 1.2B today).
To hit these targets requires believing in fanciful TAM forecasts, market share, and margins.


Spotify Analyst Day: We’re Going to Be Huge and Profitable in 10 Years

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.

Event-Driven

<ul>
<li>Tencent has been busy distributing shares in some of its investments over the past two years, with JD.com’s distribution announced in 2021 and Meituan’s in 2022.</li>
<li>In our earlier note in 2022, <a href="https://www.smartkarma.com/insights/tencent-investee-selldown-the-us-120bn-global-overhang" target="_blank" data-smartkarma-citation="insights:81153" rel="noopener">Tencent Investee Selldown - The US$120bn Global Overhang</a>, we had looked at its overall investment portfolio.</li>
<li>With two of its large investments spun-out, we now re-look at Tencent’s shareholding in various companies to try and gauge which ones it could sell out of and how. </li>
</ul>


Tencent has been busy distributing shares in some of its investments over the past two years, with JD.com’s distribution announced in 2021 and Meituan’s in 2022.
In our earlier note in 2022, Tencent Investee Selldown - The US$120bn Global Overhang, we had looked at its overall investment portfolio.
With two of its large investments spun-out, we now re-look at Tencent’s shareholding in various companies to try and gauge which ones it could sell out of and how. 


Tencent Investee Selldown - JD.com Done, Meituan Done, Two More Still Left

<ul>
<li>Warner Music hired YouTube's Chief Business Officer Robert Kyncl as its new CEO, an impressive executive well positioned to expand music monetization to newer frontiers.</li>
<li>The stock has roundtripped its $25 June 2020 IPO price after doubling.</li>
<li>There is a compelling "comping the comp" catalyst path for 2023, as streaming revenues reaccelerate, and Kyncl renegotiates static licensing deals with Peloton, Tiktok, etc.</li>
</ul>


Warner Music hired YouTube's Chief Business Officer Robert Kyncl as its new CEO, an impressive executive well positioned to expand music monetization to newer frontiers.
The stock has roundtripped its $25 June 2020 IPO price after doubling.
There is a compelling "comping the comp" catalyst path for 2023, as streaming revenues reaccelerate, and Kyncl renegotiates static licensing deals with Peloton, Tiktok, etc.


Long Idea: Warner Music’s New CEO Could Prove a Catalyst

Equity Capital Markets

<ul>
<li>Cloud Village Inc. (CVI), also known as NetEase Music, raised around US$420m in its Hong Kong IPO in Dec 21. The IPO was almost entirely taken up by cornerstones.</li>
<li>The company had also earlier obtained investments from Baidu and Alibaba, along with other mainly PE investors. These investors will be released from their lock-up on 1st Jun 2022.</li>
<li>In this note, we will talk about the lock-up dynamics and updates over the past few months.</li>
</ul>


Cloud Village Inc. (CVI), also known as NetEase Music, raised around US$420m in its Hong Kong IPO in Dec 21. The IPO was almost entirely taken up by cornerstones.
The company had also earlier obtained investments from Baidu and Alibaba, along with other mainly PE investors. These investors will be released from their lock-up on 1st Jun 2022.
In this note, we will talk about the lock-up dynamics and updates over the past few months.


Cloud Village IPO Lock-Up - Selling the PE Stock (US$350m) Might Solve the Liquidity Issues

Alpha-Centric ESG Research

Kyle Rudden

<ul>
<li>
<a href="https://www.smartkarma.com/entities/carsome-group" target="_blank" data-smartkarma-citation="entities:35913:1" rel="noopener">Carsome (CARSOME1 SP)</a>, Malaysia's used-car eCommerce/technology unicorn, has reportedly submitted a confidential IPO filing for a dual listing on Nasdaq and <a href="https://www.smartkarma.com/entities/singapore-exchange-ltd" target="_blank" data-smartkarma-citation="entities:1047:1" rel="noopener">Singapore Exchange</a>.</li>
<li>Carsome has a great ESG story to tell, but needs to be less humble about telling it because pre-IPO ESG messaging can impact IPO valuations, especially for transportation-related deals.</li>
<li>The centerpiece of Carsome's ESG story should be the important (but underappreciated) role of used car markets in decarbonising road transportation, a leading source of carbon emissions.</li>
</ul>



Carsome (CARSOME1 SP), Malaysia's used-car eCommerce/technology unicorn, has reportedly submitted a confidential IPO filing for a dual listing on Nasdaq and Singapore Exchange.
Carsome has a great ESG story to tell, but needs to be less humble about telling it because pre-IPO ESG messaging can impact IPO valuations, especially for transportation-related deals.
The centerpiece of Carsome's ESG story should be the important (but underappreciated) role of used car markets in decarbonising road transportation, a leading source of carbon emissions.


Carsome: A Paradigm of Circular Economy and Unsung Hero in the Decarbonisation of Transportation

Luxembourg

Spotify Technology S.A. provides music streaming services. The Company offers commercial free music and ad-supported services to subscribers. Spotify Technology serves clients worldwide.

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Spotify (SPOT US)

Spotify Analyst Day: We’re Going to Be Huge and Profitable in 10 Years

Spotify's Analyst Day came with new disclosures and an aggressive long-term model. For a company that chronically underwhelms the street on...

Aaron Gabin

Tencent Investee Selldown - JD.com Done, Meituan Done, Two More Still Left

Tencent has been distributing shares in some of its investments over the past two years. In this note, we look at which of its remaining investee...

Sumeet Singh

Long Idea: Warner Music’s New CEO Could Prove a Catalyst

Warner Music's hiring of YouTube Chief Business Officer Robert Kyncl is an intriguing hire well positioned to increase Warner's monetization in...

Aaron Gabin

Cloud Village IPO Lock-Up - Selling the PE Stock (US$350m) Might Solve the Liquidity Issues

Cloud Village Inc. (CVI), also known as NetEase Music, raised around US$420m in its Hong Kong IPO in Dec 21. Investors will be released from their...

Sumeet Singh

Carsome: A Paradigm of Circular Economy and Unsung Hero in the Decarbonisation of Transportation

Carsome has reportedly filed for an IPO (dual Nasdaq/SGX listing), and has a great ESG story to tell investors including the role that used car...

Kyle Rudden

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