Quantitative Equity Analyst, DMA

Charlotte van Tiddens, CFA

Quantitative Equity Analyst

Technology-First Company

DMA is a technology-first company that provides an end-to-end SaaS solution to institutional investors. DMA enables regulated entities like asset managers, wealth managers, investment managers and financial advisors to connect their front and back office, break silos and reduce headcount.

Event-Driven

<ul><li>Tencent is due to release Q1 FY24 results today. The earnings call is scheduled for 14:00 SAST</li><li>In this note, we unpack what is priced and how Tencent has performed relative to constituents in the HSTECH index since our last update (29 April).</li><li>We also provide an update on how the discounts of Naspers and Prosus have traded.</li></ul>

Tencent is due to release Q1 FY24 results today. The earnings call is scheduled for 14:00 SASTIn this note, we unpack what is priced and how Tencent has performed relative to constituents in the HSTECH index since our last update (29 April).We also provide an update on how the discounts of Naspers and Prosus have traded.

Tencent Q1 FY24 Results Due, a Look into What Is Priced

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 Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> reported 4Q results today. Both revenues and OP increased 7.1% and 42.0% YoY, however, both revenue and OP fell below consensus estimates.</li>
<li>The company also announced an increase to 2023 dividends and more than doublethe size of the company's share buyback in 2024 compared to 2023.</li>
<li>We expect Internet VAS to grow at single-digits in 2024, however, high-margin new products to help boost margins in 2024.</li>
</ul>



Tencent (700 HK) reported 4Q results today. Both revenues and OP increased 7.1% and 42.0% YoY, however, both revenue and OP fell below consensus estimates.
The company also announced an increase to 2023 dividends and more than doublethe size of the company's share buyback in 2024 compared to 2023.
We expect Internet VAS to grow at single-digits in 2024, however, high-margin new products to help boost margins in 2024.


Tencent 4Q2023: Gaming Declines Yet Again, Margins Have Further Upside

Greater China Equity Long/Short Analyst

Eric Chen

Equity Bottom-Up

<ul>
<li>One year ago, we published a note valuing Wechat Channels at US$29 billion by applying 25xPE to RMB8 billion net profit out of RMB37 billion revenue by 2024.</li>
<li>Fast forward to today, the platform’s priority has been further elevated by Tencent management in its attempt to pursue high quality growth.</li>
<li>We review our thesis on Wechat Channels based on recent channel checks and now believe that the platform could represent ~35% of Tencent's total incremental profit from 2024 to 2026. </li>
</ul>


One year ago, we published a note valuing Wechat Channels at US$29 billion by applying 25xPE to RMB8 billion net profit out of RMB37 billion revenue by 2024.
Fast forward to today, the platform’s priority has been further elevated by Tencent management in its attempt to pursue high quality growth.
We review our thesis on Wechat Channels based on recent channel checks and now believe that the platform could represent ~35% of Tencent's total incremental profit from 2024 to 2026. 


Tencent (0700.HK): Revisiting Wechat Channels

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>A better week for HK stocks as A-shares rebound on National Team buying, a PBOC RRR cut, and potentially other measures to boost the market. Foreigners stopped selling; that helped.</li>
<li>Southbound saw decent net buying on ETFs late in the week, but otherwise the week was pretty flat in single-stock land - net buying of SOEs, selling of tech.</li>
<li>Net SOUTHBOUND buying was HK$4.5bn on the week, mostly through Shanghai (interestingly, 90+% of the decent NORTHBOUND buy was also through Shanghai). </li>
</ul>


A better week for HK stocks as A-shares rebound on National Team buying, a PBOC RRR cut, and potentially other measures to boost the market. Foreigners stopped selling; that helped.
Southbound saw decent net buying on ETFs late in the week, but otherwise the week was pretty flat in single-stock land - net buying of SOEs, selling of tech.
Net SOUTHBOUND buying was HK$4.5bn on the week, mostly through Shanghai (interestingly, 90+% of the decent NORTHBOUND buy was also through Shanghai). 


HK Connect SOUTHBOUND Flows (To 26 Jan 2024); ETFs and High Div SOEs Again BIG Buys, Tech Sold

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>2023 marked our eighth year covering Equity Capital Markets in Asia Pacific. In 2023, IPOs didn’t pick up much from the low base of 2022  while placements showed upward momentum.</li>
<li>We ended 2023 with an accuracy rate of 73.7% across 57 IPOs that we covered and 79.3% across 115 placements.</li>
<li>For those not familiar with our coverage, we aim to cover all IPOs and placements with a minimum deal size of US$100m across Asia-Pacific, including China ADRs.</li>
</ul>


2023 marked our eighth year covering Equity Capital Markets in Asia Pacific. In 2023, IPOs didn’t pick up much from the low base of 2022  while placements showed upward momentum.
We ended 2023 with an accuracy rate of 73.7% across 57 IPOs that we covered and 79.3% across 115 placements.
For those not familiar with our coverage, we aim to cover all IPOs and placements with a minimum deal size of US$100m across Asia-Pacific, including China ADRs.


Aequitas 2023 IPOs and Placements Performance Review - IPOs Forming a Low Base, Placements Pick Up

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent Holdings (ADR) (TCEHY US)

Tencent Q1 FY24 Results Due, a Look into What Is Priced

Tencent is due to release Q1 FY24 results today. The earnings call is scheduled for 14:00 SAST. In this note, we unpack what is priced and how...

DMA

Tencent 4Q2023: Gaming Declines Yet Again, Margins Have Further Upside

Tencent's 4Q revenue and OP grew YoY, but below consensus estimates. Games biz declined again after seeing growth in the last 3-quarters. New high...

Shifara Samsudeen, FCMA, CGMA

Tencent (0700.HK): Revisiting Wechat Channels

We revisit our investment thesis about Wechat Channels and see significantly higher-than-expected profitability. We expect the product to generate...

Eric Chen

HK Connect SOUTHBOUND Flows (To 26 Jan 2024); ETFs and High Div SOEs Again BIG Buys, Tech Sold

SOUTHBOUND flows were positive on the week but most of the net buying was in the big two ETFs. The trend of buying low PER high div SOEs continues....

Travis Lundy

Aequitas 2023 IPOs and Placements Performance Review - IPOs Forming a Low Base, Placements Pick Up

2023 was our eight year of covering Asia ECM. We ended 2023 with an accuracy rate of 73.7% across 57 IPOs that we covered and 79.3% across 115...

Sumeet Singh

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Tencent Q1 FY24 Results Due, a Look into What Is Priced

Tencent is due to release Q1 FY24 results today. The earnings call is scheduled for 14:00 SAST. In this note, we unpack what is priced and how...

DMA

Tencent 4Q2023: Gaming Declines Yet Again, Margins Have Further Upside

​Tencent's 4Q revenue and OP grew YoY, but below consensus estimates. Games biz declined again after seeing growth in the last 3-quarters. New high...

Shifara Samsudeen, FCMA, CGMA

Tencent (0700.HK): Revisiting Wechat Channels

We revisit our investment thesis about Wechat Channels and see significantly higher-than-expected profitability. We expect the product to generate...

Eric Chen

HK Connect SOUTHBOUND Flows (To 26 Jan 2024); ETFs and High Div SOEs Again BIG Buys, Tech Sold

SOUTHBOUND flows were positive on the week but most of the net buying was in the big two ETFs. The trend of buying low PER high div SOEs continues....

Travis Lundy

Aequitas 2023 IPOs and Placements Performance Review - IPOs Forming a Low Base, Placements Pick Up

2023 was our eight year of covering Asia ECM. We ended 2023 with an accuracy rate of 73.7% across 57 IPOs that we covered and 79.3% across 115...

Sumeet Singh

Tencent's 4Q revenue and OP grew YoY, but below consensus estimates. Games biz declined again after seeing growth in the last 3-quarters. New high...