Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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 Bottom-Up

<ul>
<li>Kuaishou (1024 HK)’s vice president of community content was arrested for taking bribes.</li>
<li>Alibaba (BABA)’s public relation manager was rumored to jump off the office building in Beijing.</li>
<li>Suning Commerce (002024 CN)’s founder will sell his shareholdings.</li>
</ul>


Kuaishou (1024 HK)’s vice president of community content was arrested for taking bribes.
Alibaba (BABA)’s public relation manager was rumored to jump off the office building in Beijing.
Suning Commerce (002024 CN)’s founder will sell his shareholdings.


China Internet Weekly (Feb 22): Kuaishou VP Arrested, BABA Manager Dead “by Accident”, & Q4 Results

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Given the significant uncertainty surrounding 1) the impact that a regulatory-induced restructuring could have on the eventually listed <a href="https://www.smartkarma.com/entities/ant-group-co-ltd" target="_blank" data-smartkarma-citation="entities:24240:1" rel="noopener">Ant Group (6688 HK)</a>, and 2) the full final impact of increased anti-monopoly regulatory efforts from the State Administration for Market Regulation (SAMR) on the <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>, it has been difficult to assess a fair valuation level for the company. Following the indefinite suspension of Ant Group’s IPO, in November 2020, we witnessed a c.30% sell-off (or $260bn!) in Alibaba Group’s share price, before starting its recovery back to current levels, triggered by the reappearance of Jack Ma and a solid earnings report for the quarter ended December 2020. The net result, however, has been a roughly 17% (or $140bn) decline in Alibaba’s listed value. In this insight, I take a deep dive into Alibaba’s Sum-of-The-Parts valuation to assess what implied value is currently priced in for their equity holding in Ant Group, and what can be deduced from the current valuation for their Core Commerce operations.

Given the significant uncertainty surrounding 1) the impact that a regulatory-induced restructuring could have on the eventually listed Ant Group (6688 HK), and 2) the full final impact of increased anti-monopoly regulatory efforts from the State Administration for Market Regulation (SAMR) on the Alibaba Group (9988 HK), it has been difficult to assess a fair valuation level for the company. Following the indefinite suspension of Ant Group’s IPO, in November 2020, we witnessed a c.30% sell-off (or $260bn!) in Alibaba Group’s share price, before starting its recovery back to current levels, triggered by the reappearance of Jack Ma and a solid earnings report for the quarter ended December 2020. The net result, however, has been a roughly 17% (or $140bn) decline in Alibaba’s listed value. In this insight, I take a deep dive into Alibaba’s Sum-of-The-Parts valuation to assess what implied value is currently priced in for their equity holding in Ant Group, and what can be deduced from the current valuation for their Core Commerce operations.

Alibaba: A Detailed Look at the SOTP, and What that Tells Us About the Ant Group and Core Commerce

<ul>
<li>The National Radio and Television Administration forbids juveniles from paying broadcasters.</li>
<li>It was widely rumored that both Alibaba (BABA) and Tencent (700 HK) stopped negotiating the acquisition of iQiyi (IQ).</li>
<li>The National Medical Products Administration formally allow prescription drug to be sold online.</li>
</ul>


The National Radio and Television Administration forbids juveniles from paying broadcasters.
It was widely rumored that both Alibaba (BABA) and Tencent (700 HK) stopped negotiating the acquisition of iQiyi (IQ).
The National Medical Products Administration formally allow prescription drug to be sold online.


China Internet Weekly (30Nov2020): Approve Online Rx Drug, Ban Juveniles from Paying Broadcasters

Equity Capital Markets

<ul>
<li>Shanghai Stock Exchange postponed Ant Group’s IPO.</li>
<li>Four financial authorities warned Ant Group.</li>
<li>We believe Jack Ma’s speech offended the Financial Working Committee.</li>
<li>We also believe it is hard to reach a compromise between Ant Group and the authoritiies.</li>
</ul>


Shanghai Stock Exchange postponed Ant Group’s IPO.
Four financial authorities warned Ant Group.
We believe Jack Ma’s speech offended the Financial Working Committee.
We also believe it is hard to reach a compromise between Ant Group and the authoritiies.


Ant Group (蚂蚁集团): Facing Hostile Authorities After Jack Ma's Speech

<ul class="">
<li>JD.com (JD) acquired 100% of Five Star, a store chain of household appliance.</li>
<li>Xiaomi (1810 HK)’s smartphone sales decreased by 35% YoY in 2Q20.</li>
<li>The State Post Bureau of China announced that the revenue from express parcel increased by 23.5% YoY in 2Q20 versus a decrease of 0.6% YoY in 1Q20.</li>
<li>The National Development and Reform Commission requires internet broadband providers to reduce prices by 15% for corporate users.</li>
</ul>


JD.com (JD) acquired 100% of Five Star, a store chain of household appliance.
Xiaomi (1810 HK)’s smartphone sales decreased by 35% YoY in 2Q20.
The State Post Bureau of China announced that the revenue from express parcel increased by 23.5% YoY in 2Q20 versus a decrease of 0.6% YoY in 1Q20.
The National Development and Reform Commission requires internet broadband providers to reduce prices by 15% for corporate users.


China Internet Weekly (3Aug2020): JD Acquired Appliance Store, Xiaomi Phone Sales Plunged

China

Suning.com Co., Ltd. operates retail chain stores to sell household appliances, electronic products, office equipment, and communication products. The Company also provides installation and maintenance services.

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Suning.com (002024 CH)

China Internet Weekly (Feb 22): Kuaishou VP Arrested, BABA Manager Dead “by Accident”, & Q4 Results

Kuaishou’s vice president was arrested for taking bribes. Alibaba’s manager was rumored to jump off the office building. Suning Commerce’s founder...

Ming Lu

Alibaba: A Detailed Look at the SOTP, and What that Tells Us About the Ant Group and Core Commerce

In this insight, I take a deep dive into Alibaba’s Sum-of-The-Parts to assess the implied value for their equity holding in Ant Group, and what can...

Wium Malan, CFA

China Internet Weekly (30Nov2020): Approve Online Rx Drug, Ban Juveniles from Paying Broadcasters

The authorities forbid juveniles from paying broadcasters. The Medical Administration allows prescription drug to be sold online.

Ming Lu

Ant Group (蚂蚁集团): Facing Hostile Authorities After Jack Ma's Speech

Shanghai Stock Exchange postponed Ant Group’s IPO, because four financial authorities warned Ant Group. We believe Jack Ma’s speech offended the...

Ming Lu

China Internet Weekly (3Aug2020): JD Acquired Appliance Store, Xiaomi Phone Sales Plunged

JD.com (JD) acquired 100% of Five Star, a store chain of household appliance. Xiaomi (1810 HK)’s smartphone sales decreased by 35% YoY in...

Ming Lu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)