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>BYD’s sales volume increased by 35% YoY in June and by 39% YoY in 2Q24.</li>
<li>Tesla’s Model Y is on the state-owned corporation procurement catalogs.</li>
<li>Microsoft plans to close its franchised store chain in China due to the weak demand for Surface.</li>
</ul>


BYD’s sales volume increased by 35% YoY in June and by 39% YoY in 2Q24.
Tesla’s Model Y is on the state-owned corporation procurement catalogs.
Microsoft plans to close its franchised store chain in China due to the weak demand for Surface.


China Consumption Weekly (8 Jul 2024): BYD, Seres, Tesla, Microsoft, XHS, Mixue

<ul>
<li>European Commission will impose provisional tariffs on imported Chinese battery electric vehicles.</li>
<li>Zeekr’s deliveries increased by 117% YoY in 1Q24 and by 112% YoY in the first five months of 2024.</li>
<li>Ant Group will pay RMB1 billion to sponsor content creators on AliPay.</li>
</ul>


European Commission will impose provisional tariffs on imported Chinese battery electric vehicles.
Zeekr’s deliveries increased by 117% YoY in 1Q24 and by 112% YoY in the first five months of 2024.
Ant Group will pay RMB1 billion to sponsor content creators on AliPay.


China Consumption Weekly (17 Jun 2024): BYD, Geely, Zeekr, Zhihu, China Literature, Tencent

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>Zhihu delivered better-than-feared 1Q24 results, with upbeat topline and bottom line. Vocational training was resilient at +36% YoY in 1Q24, while membership decelerated at +1% YoY.</li><li>As Zhihu prioritizes on higher efficiency and quarterly breakeven in 4Q24E, we expect its users metrics and revenue to bear shortterm volatility.</li><li>2Q24E topline might see low-teens YoY decline, dragged by macro challenges and active transition in CCS &amp; vocational training.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Zhihu delivered better-than-feared 1Q24 results, with upbeat topline and bottom line. Vocational training was resilient at +36% YoY in 1Q24, while membership decelerated at +1% YoY.As Zhihu prioritizes on higher efficiency and quarterly breakeven in 4Q24E, we expect its users metrics and revenue to bear shortterm volatility.2Q24E topline might see low-teens YoY decline, dragged by macro challenges and active transition in CCS &amp; vocational training.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Zhihu (ZH US) - Transition year with efficiency improvement

<ul><li>Zhihu’s 4Q23 results were better-than-feared, with strong vocational training and narrowing loss.</li><li>For FY24E, mgmt. emphasized more on margin improvement with disciplined expenses, and restated its quarterly breakeven target by 4Q24E.</li><li>With shrinking S&amp;M investment, we expect prudent user trend and top line growth ahead (forecasting total revenue to decline 10% YoY in FY24E, in which marketing services/membership /vocational training -20%/+0%/+5% YoY). </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Zhihu’s 4Q23 results were better-than-feared, with strong vocational training and narrowing loss.For FY24E, mgmt. emphasized more on margin improvement with disciplined expenses, and restated its quarterly breakeven target by 4Q24E.With shrinking S&amp;M investment, we expect prudent user trend and top line growth ahead (forecasting total revenue to decline 10% YoY in FY24E, in which marketing services/membership /vocational training -20%/+0%/+5% YoY). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Zhihu (ZH US) - Prioritizing Breakeven Target

<ul>
<li>PDD’s market cap has exceeded Alibaba’s due to PDD’s overseas performance and price sensitive consumers.</li>
<li>Great Wall Motor plans to enter eight countries in Europe to bypass the investigation on Chinese export subsidies.</li>
<li>ByteDance plans to close its game subsidy and, 2,000 employees may lose their jobs.</li>
</ul>


PDD’s market cap has exceeded Alibaba’s due to PDD’s overseas performance and price sensitive consumers.
Great Wall Motor plans to enter eight countries in Europe to bypass the investigation on Chinese export subsidies.
ByteDance plans to close its game subsidy and, 2,000 employees may lose their jobs.


China Consumption Weekly (4 Dec 2023): PDD, Alibaba, AliHealth, Great Wall Motor, ByteDance

China

Zhihu Inc. operates as an online share knowledge community. The Company provides a socialized website for questions and answers which enables users to obtain information through questions that provoke the opinions and views from answerers as individuals. Zhihu conducts businesses in China.

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Zhihu Technology (ZH US)

China Consumption Weekly (8 Jul 2024): BYD, Seres, Tesla, Microsoft, XHS, Mixue

BYD’s sales volume increased by 35% YoY in June and by 39% YoY in 2Q24. Tesla’s Model Y is on the state-owned corporation procurement catalogues....

Ming Lu

China Consumption Weekly (17 Jun 2024): BYD, Geely, Zeekr, Zhihu, China Literature, Tencent

European Commission will impose tariffs on Chinese electric vehicles. Zeekr’s deliveries increased by 112% YoY from Jan to May. Ant Group will pay...

Ming Lu

Zhihu (ZH US) - Transition year with efficiency improvement

Zhihu delivered better-than-feared 1Q24 results, with upbeat topline and bottom line. Vocational training was resilient at +36% YoY in 1Q24, while...

CMB International

Zhihu (ZH US) - Prioritizing Breakeven Target

For FY24E, mgmt. emphasized more on margin improvement with disciplined expenses, and restated its quarterly breakeven target by 4Q24E.

CMB International

China Consumption Weekly (4 Dec 2023): PDD, Alibaba, AliHealth, Great Wall Motor, ByteDance

PDD’s market cap has exceeded Alibaba’s. Great Wall Motor plans to enter eight countries in Europe. ByteDance plans to close its game subsidy.

Ming Lu

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