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>In 1Q24, Revenues of Xpeng, Tongcheng, Kanzhun, and Gaotu grew by 62% YoY, 50%, YoY, 43% YoY and 34% YoY.</li>
<li>KE’s revenue decreased by 20% YoY in 1Q24 due to the weak property market.</li>
<li>Bilibili’s value added services revenue grew by 17% YoY and advertising revenue grew by 31% YoY.</li>
</ul>


In 1Q24, Revenues of Xpeng, Tongcheng, Kanzhun, and Gaotu grew by 62% YoY, 50%, YoY, 43% YoY and 34% YoY.
KE’s revenue decreased by 20% YoY in 1Q24 due to the weak property market.
Bilibili’s value added services revenue grew by 17% YoY and advertising revenue grew by 31% YoY.


China Consumption Weekly (27 May 2024): Xpeng, Tongcheng, Kanzhun, Gaotu, KE, Bilibili, and Weibo

Managing Director, Zero One, Zero One

Vincent Fernando, CFA

Managing Director, Zero One

Zero One

Founded in 2015, Zero One produces independent investment research and provides corporate finance advisory services with a focus on both listed and private technology companies. Founder Vincent Fernando has over 20 years of experience in US and Asia capital markets.

Independent Investment Research

Himax Technologies Inc Adr / Equity Bottom-Up

<ul>
<li>We hosted a conference call recently with Himax management, the global leader in automotive touch display controllers; the company is experiencing a uniquely stronger automotive supply/demand environment than some peers.</li>
<li>Discussed in detail how larger or more sophisticated interior displays can drive higher dollar content of display controllers per vehicle. We examine trending new car designs with much larger displays.</li>
<li>We forecast an exponential jump-up in display controller content value per vehicle as beautiful display designs are becoming key USP for auto brands; Maintain our Structural Long rating for Himax.</li>
</ul>


We hosted a conference call recently with Himax management, the global leader in automotive touch display controllers; the company is experiencing a uniquely stronger automotive supply/demand environment than some peers.
Discussed in detail how larger or more sophisticated interior displays can drive higher dollar content of display controllers per vehicle. We examine trending new car designs with much larger displays.
We forecast an exponential jump-up in display controller content value per vehicle as beautiful display designs are becoming key USP for auto brands; Maintain our Structural Long rating for Himax.


TechChain Insights: Call with Himax, How New In-Car Displays Can Quadruple Chip Content Per Vehicle

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

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

<ul>
<li>XPeng C3Q23 top line, non-GAAP operating loss and GAAP net loss in line, 28% and 68% worse than our estimates, main reason is G3’s End-Of-Production charge to the gross margin</li>
<li>We expect XPEV to experience tough transition in 2024 since product line which spans across sedan and SUV, shall experience severe competition at a time when its differentiation is eroding.</li>
<li>We prefer to wait out this period; we cut TP of XPEV from US$18 to US$9 and downgrade to SELL.</li>
</ul>


XPeng C3Q23 top line, non-GAAP operating loss and GAAP net loss in line, 28% and 68% worse than our estimates, main reason is G3’s End-Of-Production charge to the gross margin
We expect XPEV to experience tough transition in 2024 since product line which spans across sedan and SUV, shall experience severe competition at a time when its differentiation is eroding.
We prefer to wait out this period; we cut TP of XPEV from US$18 to US$9 and downgrade to SELL.


[XPeng Inc. (XPEV US, SELL, TP US$9) Rating Change]: Strategic Options May Come Late and Uncertain

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

China/Asia TMT

Shawn Yang

<ul>
<li>VW’s long-term software dilemma caused delays of new EV model launch. Thus, leveraging established software capability of Xpeng could help VW catch up and shorten its R&amp;D cycle.</li>
<li>We see two benefits for Xpeng: 1) a new revenue stream from tech licensing and potential reduction of supply chain costs; 2) VW’s endorsement  could help Xpeng’s overseas expansion.</li>
<li>We think the potential of Xpeng’s high-margin tech licensing being opened to more VW models and other OEMs. Our TP implies 2.5x 2024PS</li>
</ul>


VW’s long-term software dilemma caused delays of new EV model launch. Thus, leveraging established software capability of Xpeng could help VW catch up and shorten its R&amp;D cycle.
We see two benefits for Xpeng: 1) a new revenue stream from tech licensing and potential reduction of supply chain costs; 2) VW’s endorsement  could help Xpeng’s overseas expansion.
We think the potential of Xpeng’s high-margin tech licensing being opened to more VW models and other OEMs. Our TP implies 2.5x 2024PS


[XPeng(XPEV US, BUY, TP US$24.3)TP Change]: Potential of Tech Licensing and EV Sales Lifts Valuation

China

XPeng Inc. designs, produces, and distributes electric vehicles. The Company designs, develops, manufactures and markets smart smart electric vehicles, as well as finance, parts, and maintenance services. XPeng serves customers in China.

Price Gauge
52-week Range	0.00 - 0.00
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XPeng (XPEV US)

China Consumption Weekly (27 May 2024): Xpeng, Tongcheng, Kanzhun, Gaotu, KE, Bilibili, and Weibo

In 1Q24, Xpeng, Tongcheng, Kanzhun, and Gaotu grew by 62% YoY, 50%, YoY, 43% YoY and 34% YoY. KE’s revenue decreased by 20% YoY in 1Q24 due to the...

Ming Lu

TechChain Insights: Call with Himax, How New In-Car Displays Can Quadruple Chip Content Per Vehicle

We discussed in depth the company's latest insights in how larger interior displays in autos are driving higher dollar content of display...

Vincent Fernando, CFA

[XPeng Inc. (XPEV US, SELL, TP US$9) Rating Change]: Strategic Options May Come Late and Uncertain

XPeng reported Q3 2023 results with losses worse than expected due to an End-Of-Production charge, and faces tough competition and eroding...

Blue Lotus Research Institute

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

[XPeng(XPEV US, BUY, TP US$24.3)TP Change]: Potential of Tech Licensing and EV Sales Lifts Valuation

VW’s long-term software dilemma caused delays of new EV model launch. Thus, leveraging established software capability of Xpeng could help VW catch...

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China Consumption Weekly (27 May 2024): Xpeng, Tongcheng, Kanzhun, Gaotu, KE, Bilibili, and Weibo

In 1Q24, Xpeng, Tongcheng, Kanzhun, and Gaotu grew by 62% YoY, 50%, YoY, 43% YoY and 34% YoY. KE’s revenue decreased by 20% YoY in 1Q24 due to the...

Ming Lu

TechChain Insights: Call with Himax, How New In-Car Displays Can Quadruple Chip Content Per Vehicle

We discussed in depth the company's latest insights in how larger interior displays in autos are driving higher dollar content of display...

Vincent Fernando, CFA

[XPeng Inc. (XPEV US, SELL, TP US$9) Rating Change]: Strategic Options May Come Late and Uncertain

​XPeng reported Q3 2023 results with losses worse than expected due to an End-Of-Production charge, and faces tough competition and eroding...

Blue Lotus Research Institute

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

[XPeng(XPEV US, BUY, TP US$24.3)TP Change]: Potential of Tech Licensing and EV Sales Lifts Valuation

VW’s long-term software dilemma caused delays of new EV model launch. Thus, leveraging established software capability of Xpeng could help VW catch...

Blue Lotus Research Institute

XPeng reported Q3 2023 results with losses worse than expected due to an End-Of-Production charge, and faces tough competition and eroding...