Analyst - Media&Entertainment Sector, Blue Lotus Research Institute

Stan Zhao

Analyst - Media&Entertainment Sector

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

<ul>
<li>On December 16th, Kuaishou launched a subscription service for its micro drama channel, we believe it marks a key step towards improving monetization;</li>
<li>The penetration rate of heavy micro drama users on the platform has steadily increased, and leveraging their loyalty and monetization efficiency may improve with the subscription model.</li>
<li>The new model could better help mitigate the macroeconomic risks posed by advertising and the content quality risks of its long-tail partners.</li>
</ul>


On December 16th, Kuaishou launched a subscription service for its micro drama channel, we believe it marks a key step towards improving monetization;
The penetration rate of heavy micro drama users on the platform has steadily increased, and leveraging their loyalty and monetization efficiency may improve with the subscription model.
The new model could better help mitigate the macroeconomic risks posed by advertising and the content quality risks of its long-tail partners.


Monetization Upgrade Kickstarts Kuaishou's Microdrama Business

Chief Executive Officer, Emmer Capital Partners Limited

Manishi Raychaudhuri

Chief Executive Officer

Emmer Capital Partners Limited

Emmer Capital Partners is an Asia Pacific focused financial advisory firm engaging in strategic financial asset allocation advice, bespoke thematic research and advising early-stage companies and connecting them to investors. Emmer Capital provides macro-economic and multi-asset investment strategy inputs to institutions, family offices, private wealth managers, private equity, and corporate boards directly and through independent research platforms. Emmer Capital also advises a wide range of startup companies on fund raising and business strategy. Emmer Capital's active engagement with the print and electronic media reaches a broad spectrum of investors across the globe.

TSMC (Taiwan Semiconductor Manufacturing) / Equity Bottom-Up

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>2025 could be thorny for Asian equities. The main themes - "Trump turmoil", a slower Fed and a "stronger for longer" Dollar and continued AI boom - have mixed implications.</li>
<li>China's policy articulation to support consumption departing from earlier supply-side measures, would be an important investment driver. India, though expensive, has a few "unloved" sectors that investors should focus on.</li>
<li>Based on our five investment themes, we identify five high quality liquid top picks in Asia - two listed in Hong Kong and one each in Taiwan, India and Korea. </li>
</ul>


2025 could be thorny for Asian equities. The main themes - "Trump turmoil", a slower Fed and a "stronger for longer" Dollar and continued AI boom - have mixed implications.
China's policy articulation to support consumption departing from earlier supply-side measures, would be an important investment driver. India, though expensive, has a few "unloved" sectors that investors should focus on.
Based on our five investment themes, we identify five high quality liquid top picks in Asia - two listed in Hong Kong and one each in Taiwan, India and Korea. 


Asian Equities: 2025 High Conviction – Five Themes, Five Top Picks

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Dec 20th based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Anta Sports Products (2020 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Kuaishou Technology (1024 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Dec 20th based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Anta Sports Products (2020 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), AIA (1299 HK), Kuaishou Technology (1024 HK).


Hong Kong Buybacks Weekly (Dec 20th): Tencent, AIA, Anta Sports Products

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Today, <a href="https://www.smartkarma.com/entities/kadokawa-corp" target="_blank" data-smartkarma-citation="entities:4152:1" rel="noopener">Kadokawa (9468 JP)</a> <strong><a href="https://ssl4.eir-parts.net/doc/9468/ir_material7/242676/00.pdf" target="_blank" rel="noopener">announced</a></strong> it would sell ¥50bn of shares to <a href="https://www.smartkarma.com/entities/sony-corp" target="_blank" data-smartkarma-citation="entities:563:1" rel="noopener">Sony (6758 JP)</a> in a 3rd Party Allotment to cement a Strategic/Capital Alliance. Sony will own 10% at ¥4,146/share.</li>
<li>40% of proceeds is to "create and develop new IP", 60% is to "enhance global IP distribution"; both over 5yrs. Given ¥108bn of net cash/securities, this is a garbage reason. </li>
<li>Kadokawa shares have gained 44% in a month since Reuters carried an "Exclusive" article saying Sony was in talks to acquire Kadokawa. This is defensive entrenchment. The result will disappoint.</li>
</ul>


Today, Kadokawa (9468 JP) announced it would sell ¥50bn of shares to Sony (6758 JP) in a 3rd Party Allotment to cement a Strategic/Capital Alliance. Sony will own 10% at ¥4,146/share.
40% of proceeds is to "create and develop new IP", 60% is to "enhance global IP distribution"; both over 5yrs. Given ¥108bn of net cash/securities, this is a garbage reason. 
Kadokawa shares have gained 44% in a month since Reuters carried an "Exclusive" article saying Sony was in talks to acquire Kadokawa. This is defensive entrenchment. The result will disappoint.


Sony To Buy 7+% Stake in Kadokawa (9468 JP) For ¥50bn, Ending Near-Term Hopes of Takeover

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

Thematic (Sector/Industry)

<ul>
<li>TCOM US/ ATAT US: China Extends Transit Visa-Free Policy to 240 Hours(+/+)</li>
<li>1024 HK: Kuaishou Introduces Subscription Service for Micro Drama Business (+)</li>
<li>700 HK/1439927D CH/BIDU US: Apple Negotiates with Tencent and ByteDance to Launch AI Features in China (+/+/-)</li>
</ul>


TCOM US/ ATAT US: China Extends Transit Visa-Free Policy to 240 Hours(+/+)
1024 HK: Kuaishou Introduces Subscription Service for Micro Drama Business (+)
700 HK/1439927D CH/BIDU US: Apple Negotiates with Tencent and ByteDance to Launch AI Features in China (+/+/-)


[Blue Lotus Daily-TMT Update]:TCOM US/ ATAT US/1024 HK/700 HK/1439927D CH /BIDU/3690 HK/JD/BABA/PDD

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)

Monetization Upgrade Kickstarts Kuaishou's Microdrama Business

Kuaishou transitions from IAP to a subscription model for micro dramas to improve monetization efficiency and mitigate risks. We estimate it can...

Blue Lotus Research Institute

Asian Equities: 2025 High Conviction – Five Themes, Five Top Picks

2025 may be tricky for Asian equity with "Trump turmoil", slower Fed, strong Dollar. AI boom would help. Ditto China's consumption focus & India's...

Manishi Raychaudhuri

Hong Kong Buybacks Weekly (Dec 20th): Tencent, AIA, Anta Sports Products

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Tencent (700 HK),...

Ke Yan, CFA, FRM

Sony To Buy 7+% Stake in Kadokawa (9468 JP) For ¥50bn, Ending Near-Term Hopes of Takeover

After ugly news in the recent past, and earnings guidance lowered, an article mid-Nov24 suggested SONY was in talks to buy Kadokawa. Today we find...

Travis Lundy

[Blue Lotus Daily-TMT Update]:TCOM US/ ATAT US/1024 HK/700 HK/1439927D CH /BIDU/3690 HK/JD/BABA/PDD

China expands visa-free transit policy, Kuaishou offers subscription service for micro dramas, Apple in talks with Tencent and ByteDance for AI...

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Monetization Upgrade Kickstarts Kuaishou's Microdrama Business

​Kuaishou transitions from IAP to a subscription model for micro dramas to improve monetization efficiency and mitigate risks. We estimate it can...

Blue Lotus Research Institute

Asian Equities: 2025 High Conviction – Five Themes, Five Top Picks

​2025 may be tricky for Asian equity with "Trump turmoil", slower Fed, strong Dollar. AI boom would help. Ditto China's consumption focus & India's...

Manishi Raychaudhuri

Hong Kong Buybacks Weekly (Dec 20th): Tencent, AIA, Anta Sports Products

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Tencent (700 HK),...

Ke Yan, CFA, FRM

Sony To Buy 7+% Stake in Kadokawa (9468 JP) For ¥50bn, Ending Near-Term Hopes of Takeover

After ugly news in the recent past, and earnings guidance lowered, an article mid-Nov24 suggested SONY was in talks to buy Kadokawa. Today we find...

Travis Lundy

[Blue Lotus Daily-TMT Update]:TCOM US/ ATAT US/1024 HK/700 HK/1439927D CH /BIDU/3690 HK/JD/BABA/PDD

​China expands visa-free transit policy, Kuaishou offers subscription service for micro dramas, Apple in talks with Tencent and ByteDance for AI...

Blue Lotus Research Institute

Kuaishou transitions from IAP to a subscription model for micro dramas to improve monetization efficiency and mitigate risks. We estimate it can...

2025 may be tricky for Asian equity with "Trump turmoil", slower Fed, strong Dollar. AI boom would help. Ditto China's consumption focus & India's...

China expands visa-free transit policy, Kuaishou offers subscription service for micro dramas, Apple in talks with Tencent and ByteDance for AI...