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>Our 2024 High Conviction, the stock of Meituan has risen by 87% in one year.</li>
<li>We believe the market ignores TME because of its flat revenue.</li>
<li>However, we expect TME will significantly benefit from its dominant position in the Chinese music market.</li>
</ul>


Our 2024 High Conviction, the stock of Meituan has risen by 87% in one year.
We believe the market ignores TME because of its flat revenue.
However, we expect TME will significantly benefit from its dominant position in the Chinese music market.


2025 High Conviction: Tencent Music Entertainment (TME) – Music as Promising Future

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Event-Driven

<ul>
<li>PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.</li>
<li>The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.</li>
<li>In this note, we'll talk about the latest developments, possible outcomes and implications.</li>
</ul>


PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
In this note, we'll talk about the latest developments, possible outcomes and implications.


China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

<ul>
<li>Multiple new agencies have been reporting that <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> plans to trim its investment portfolio over the remainder of the year. </li>
<li>The reports have been coming in since the second half of the year and the company has been duly denying these rumors.</li>
<li>In this note, we look at Tencent’s shareholding in various companies to try and gauge which ones it could sell out of and how.</li>
</ul>


Multiple new agencies have been reporting that Tencent (700 HK) plans to trim its investment portfolio over the remainder of the year. 
The reports have been coming in since the second half of the year and the company has been duly denying these rumors.
In this note, we look at Tencent’s shareholding in various companies to try and gauge which ones it could sell out of and how.


Tencent Investee Selldown - The US$120bn Global Overhang

<ul>
<li>The quarterly gross margin hit historical high again in 3Q24.</li>
<li>As expected, the growth rate exceeded 5% YoY for the first time in three years, as the weak business became insignificant in total revenue.</li>
<li>The P/E band suggests an upside of 124% and a price target of US$26 for the end of 2025. Buy.</li>
</ul>


The quarterly gross margin hit historical high again in 3Q24.
As expected, the growth rate exceeded 5% YoY for the first time in three years, as the weak business became insignificant in total revenue.
The P/E band suggests an upside of 124% and a price target of US$26 for the end of 2025. Buy.


Tencent Music (TME): 3Q24, Began to Grow with Record Gross Margin

<ul>
<li>The weak business, social entertainment, become insignificant in recent quarters.</li>
<li>All operating data in music is promising, including paying user base, ARPPU, and sublicensing revenue.</li>
<li>We set an upside of 20% and a price target of US$14.80 for the end of 2025.</li>
</ul>


The weak business, social entertainment, become insignificant in recent quarters.
All operating data in music is promising, including paying user base, ARPPU, and sublicensing revenue.
We set an upside of 20% and a price target of US$14.80 for the end of 2025.


Tencent Music (TME): All Cheerful Data in Music, To Grow in Q3 After 3 Flat Years

China

Tencent Music Entertainment operates an online music entertainment platform in China. The Company offers platform that comprises of online music, recording, music-centric live streaming enabling users to discover, listen, sing, watch, perform, and socialize music.

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Tencent Music (TME US)

2025 High Conviction: Tencent Music Entertainment (TME) – Music as Promising Future

Our 2024 High Conviction, Meituan, has risen by 87% in one year. We believe the market ignores TME because of its flat revenue, but TME will...

Ming Lu

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

Tencent Investee Selldown - The US$120bn Global Overhang

There have been multiple reports that Tencent (700 HK) plans to trim its investment portfolio over the remainder of the year. We look at Tencent's...

Sumeet Singh

Tencent Music (TME): 3Q24, Began to Grow with Record Gross Margin

The quarterly gross margin hit historical high again in 3Q24. The growth rate exceeded 5% YoY for the first time in three years, as the weak...

Ming Lu

Tencent Music (TME): All Cheerful Data in Music, To Grow in Q3 After 3 Flat Years

The weak business, social entertainment, become insignificant in recent quarters. All operating data in music is promising, including paying user...

Ming Lu

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