Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Analysis of new equity issuance (IPOs, Placements)

Equity Capital Markets

Weilong delicious global is a leading spicy snack food company in China

<ul>
<li>Weilong Delicious is a is a leading spicy snack food company in China with a market share of 6.2% and ranked first among all spicy snack food enterprises in China.</li>
<li>The company’s application for a HKEx IPO has been approved and plans to raise proceeds of about US$500m.</li>
<li>Our analysis on the company’s financials reveal that its top line growth is slowing down while margins have come under pressure. We discuss the details below.</li>
</ul>

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<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 3Q2022 results yesterday. Revenue decreased 1.6% YoY to RMB140.1bn (vs consensus RMB140.0bn) while adjusted OP declined 0.2% YoY to RMB28.4bn.</li>
<li>Revenue from both Internet VAS and Online Advertising declined YoY during the quarter. Social networks revenue declined YoY for the first time by 1.9%.</li>
<li>Tencent also announced that it will distribute majority of its shareholding on <a href="https://www.smartkarma.com/entities/meituan-dianping" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> to its shareholders in dividends similar to the special dividend of its stake in JD.com.</li>
</ul>

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<li>
<a href="https://www.smartkarma.com/entities/beijing-kuaishou-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a> reported 3Q2022 results. Revenue grew 12.9% YoY to RMB23.1bn (vs consensus RMB22.6bn) while reported operating losses declined to RMB2.6bn (vs consensus RMB3.1bn) from RMB3.1bn in 3Q2021.</li>
<li>The company’s domestic business made an operating profit for the first time while there has been significant reduction in operating losses from the overseas business</li>
<li>Kuaishou’s share price moved up 7% during today’s trade following its earnings announcement and we think there is further upside to the company’s current share price.</li>
</ul>

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<li>
<a href="https://www.smartkarma.com/entities/tencent-music-entertainment" target="_blank" data-smartkarma-citation="entities:27255:1" rel="noopener">Tencent Music (TME US)</a>  reported 3Q2022 results yesterday. Revenue declined 5.6% YoY to RMB7.4bn (vs consensus RMB7.0bn) while adjusted OP for the quarter increased 14.0% YoY to RMB765m.</li>
<li>Revenue from social entertainment services decreased 20% YoY which was partially helped offset by 18.8% YoY increase in online music services revenues.</li>
<li>GPM and OPM improved due to huge spending cuts on content, revenue sharing and S&amp;M and we are yet to see if TME can sustain this without compromising user growth.</li>
</ul>

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.

Weilong Delicious Global

Weilong Delicious IPO (PHIP): Covid Outbreak Is Not The Sole Reason for 1H2022 Decline