At the end of last week, many companies under byte beat changed their names one after another to Tiktok. In connection with the news that byte beat just appointed Gao Zhun, senior partner of Shida international law firm, as the new CFO last month, the news about Tiktok's independent listing has been constantly fermenting The renaming and appointment of a new CFO are regarded by the outside world as the two precursors of Tiktok's independent listing
According to the public information available for consultation, up to now, there are 16 byte beating affiliated enterprises and subsidiaries renamed Tiktok, including core enterprises such as byte beating (Hong Kong) Co., Ltd. and Beijing byte beating Co., Ltd.
Gao Zhun, who has just taken office, not only has rich legal work experience, but also participated in the financing and listing of shares in the head for many times. According to the data, in 2018, zhonggai shares set off a wave of listing in the United States, and seven of the top ten IPOs of zhonggai shares had high standards of participation.
Although there is no official response to the listing rumors, the capital market has been unable to calm down. At present, the outside world is most concerned about two things: what level the valuation of Tiktok can reach, and whether the listing can realize the highest valuation.
With a maximum valuation of $200billion, Tiktok hit the "king of new shares"
As byte beat did not disclose all the financial information, the market valuation of Tiktok group also increased uncertainty.
However, according to the Value Research Institute (id:jiazhiyanjiusuo), there is another way for investors to spy on the pricing of Tiktok in the secondary market - referring to the performance of benchmarking enterprises.
First of all, it should be clear that the Tiktok group we are discussing now refers to the byte Tiktok Bu, not just the Tiktok app.
In November last year, liangrubo announced the reorganization of the organizational structure. Tiktok, together with vigorous education, flying book, volcanic engine, Chaoxi Lightyear and Tik tok, formed six major undertakings BU with byte beating. Under Tiktok Bu, there are six business segments including Tiktok, watermelon video, today's headlines, headlines search, headlines encyclopedia and other countries' vertical service businesses, all of which are assets with the highest quality and profitability.
For horizontal comparison in the market, Tiktok is equivalent to the plus version of Kwai; The volume and revenue model of today's headline + headline search + headline encyclopedia are in line with Baidu mobile ecological business group (MEG); Gradually, the medium-sized video and watermelon video of self-made programs are moving towards the route of station B and youaiteng. Of course, there is still a certain gap between the volume of the former and these competitive products.
However, it should be noted that the volume difference between Tiktok and Kwai is far greater than that between station B and watermelon video. Based on the revenue of 2021, Tiktok is about three times that of Kwai.
In other words, the overall valuation of Tiktok Bu is approximately equal to 3 Kwai + Baidu meg+ half a B station.
As of press time, the market value of Kwai and station B was US $30.8 billion and US $7.3 billion respectively. On Baidu's side, the current market value is US $36.8 billion. In terms of Meg's nearly 80% revenue share and business importance, the split market value can also reach US $30 billion.
After all, the reasonable valuation of Tiktok Bu may be between $120billion and $140billion, which is enough to become the largest medium cap IPO in recent years.
However, the ambition of the capital market seems to go beyond this - in the calculation models of major investment banks and third-party institutions, the valuation of Tiktok Bu is far more than $120billion.
Two of the more authoritative data are from Hurun Research Institute and Bloomberg.
The former gave a valuation of RMB 2.25 trillion in the "2021 Hurun China top 500" list released last year. According to the financial information released by bytek in the past two years, the revenue of Tiktok Bu accounts for about 70%, and the corresponding valuation is about 1.5 trillion, which is about US $220billion converted according to the exchange rate at that time.
According to the estimates of Bloomberg economists, Tiktok Bu is also valued at more than $200billion, which is parallel to Alibaba, far superior to meituan and slightly inferior to Tencent.
There is only one thing for sure. Whether it is $120billion or $200billion, if Tiktok Bu is listed separately, it is expected to become the next "stock king" level blockbuster IPO.
When the valuation reaches the "stock king" level, is Tiktok a tool for capital speculation, or is it really superior in strength?
The value Institute (ID: jiazhiyanjiusuo) believes that if you want to judge the valuation of a unicorn, you need to analyze it from the perspective of internal business and external environment.
For the former, the key lies in two points: the revenue is basically unstable and the business growth is insufficient.
In terms of the current revenue structure and revenue scale of Tiktok, its stability and growth are worth affirming.
It is understood that the total revenue in 2021 is about 390 billion, a year-on-year increase of 70%. Among them, the revenue from Tiktok Bu accounts for more than 70%. Tiktok, today's headlines and watermelon video have attracted 150billion, 45billion and 8billion respectively.
What is the revenue level? We can make a horizontal comparison: according to the data of wind, only 2% of the A-share listed companies with a total revenue of more than 150billion yuan in the last fiscal year, and Ningde times, which wants to compete with Maotai, is willing to bow to Tiktok group.
Returning to the Internet advertising market, Tiktok also leads the way in market share and revenue growth.
Indeed, under the dual impact of policy tightening and traffic depletion, the growth rate of the Internet advertising market fell sharply compared with the peak period. However, compared with other advertising scenes, this is still a traffic highland with the highest conversion rate and the most difficult for advertisers to give up.
And Tiktok Bu is the absolute leader on this track. According to questmobile's report, in the past year, Tiktok ranked second in the country in terms of media advertising revenue, beating wechat and Baidu, second only to Taobao. Today's headlines, which have obviously declined, are on a par with Kwai.
In addition, according to the statistics of true, the apps under bytehop accounted for 21% of the total Internet use in China in the past year, far exceeding 11% of Kwai's. More importantly, with 21% of the use time, bytes have returned 25% of the Internet advertising market share, reflecting the value of a single dau higher than that of its peers.
(image from questmobile)
In general, Tiktok group is a historical super Unicorn with extremely high revenue, steady business growth and huge volume.
However, back to the second question: can Tiktok maximize its valuation in the current market environment? Or to put it another way, is this the best time for Tiktok to go public?
The value Institute (ID: jiazhiyanjiusuo) believes that the answer is not optimistic
When the environment is cold, the time for Tiktok to go public is not ripe
Objectively speaking, Hurun's and Bloomberg's estimation models take more account of financial data. Due to the limitation of the estimation cycle, I'm afraid they can't reflect the dynamic changes in valuation caused by the market environment and the development of Tiktok's various businesses at the first time.
The imperfect market environment is just a big barrier in front of Tiktok.
On the one hand, the technology / Internet sector did not receive the courtesy of the capital market. The stock prices of most listed companies and the valuation of Unicorns fell sharply compared with the peak period, and the whole sector was at an absolute trough
After a sharp decline in March this year, the China concept Internet sector has not completely eased its breath until now.
According to the data of futu statistics, as of the time of publication, a total of 100 Chinese concept stocks listed in the United States fell by more than 50% during the year. Hong Kong stock technology and Internet sectors are one of the hardest hit areas. Several technology / Internet giants at the top of the food chain - Tencent, Alibaba, meituan, jd.com and pinduoduo are also struggling.
Among them, the current share price of interesting headlines, which highly coincides with today's headline business model, is less than US $1, with a decline of 67% during the year, and the market value is only US $28 million; Blibli, a competitive product of watermelon video, fell by 59% in the year, and its current market value is nearly 80% lower than the peak of US $40 billion.
As for Tiktok's old enemy Kwai, the situation is also not optimistic. Since the first break on July 26 last year, Kwai's share price and market value have been in a state of shock decline on the whole until now. After the crash in March, the market value of Kwai has evaporated nearly HK $900billion compared with its peak period, and the dynamic P / E ratio has also fallen to -2.6.
Not to mention zhonggai shares, let's focus on the global stock market. The market of technology Internet listed enterprises and unicorns is also getting worse and worse
Meta, which regards Tik tok as a thorn in the eye, once fell below the $600 billion mark at the beginning of the year, and Netflix and Amazon's first quarter earnings were also "thunderstorms" one after another. The current share price and market value of "Southeast Asia's little Tencent" sea, which has been compared by major investment banks in the past two years, have fallen to $64 and $36.1 billion respectively, nearly 80% lower than the peak share price of $367 and the highest market value in history of $2000.
Li Jun, founder of "American Stock Research Society", also said on social media that the market environment has changed and the current value can no longer be measured by past valuations.
"When the market is good, everyone will pay attention to your growth rate. If the annual revenue growth rate exceeds 100%, the capital market will give you a valuation of 10-20 times according to the market sales rate, which is no problem. But when the market is bad, everyone will pay attention to your profit. According to the P / E ratio PE, even if the market gives byte 50 times PE, the valuation is difficult to exceed $200 billion."
When the scope is narrowed to Tiktok Bu, the shrinkage of valuation is more obvious.
On the other hand, the market trend and market liquidity are not ideal. Super IPOs of this scale, such as Tiktok, are likely to exacerbate market uncertainty and increase the potential liquidity shortage. For Tiktok itself, this also means higher volatility risk
Due to well-known reasons, Tiktok wants to be listed, and HKEx is the most reasonable choice at this stage The key to the problem lies precisely in the liquidity of Hong Kong stocks
According to the data of wind statistics, the trading of Hong Kong stocks in the past quarter was not active, and the trading volume of secondary listed enterprises in the open market was significantly lower than the proportion of shareholding. What makes emerging markets worse is that the Federal Reserve is starting what may be the strongest interest rate hike cycle in history. It is almost inevitable for international hot money to withdraw from emerging markets and flow into US stocks.
Guan Tao, global chief economist of BOC securities, said bluntly in a recent media interview that the tightening policy of the Federal Reserve has made emerging countries "in a dilemma":
"Following the interest rate hike may further stifle the economic recovery. Failure to follow the interest rate hike may lead to capital outflow, exchange rate depreciation and rising inflationary pressure."
The statistics of open source securities also show that some overseas ETF funds have heard the wind. At present, the trading volume of American and European capital in Hong Kong stock market accounts for nearly 25%. If there is a large outflow of capital, the liquidity of Hong Kong stock will be further under pressure.
The value Institute (ID: jiazhiyanjiusuo) would like to remind you that on March 14 this year, Hong Kong stocks just experienced a "Black Monday" with liquidity more expensive than gold. The liquidity crisis is not out of reach.
Market data showed that the Hang Seng technology index plunged 11.03% on the same day, the largest one-day decline since July 2020; The forward points of Hong Kong and foreign exchange and the return of Hang Seng Index both fell, and the proportion of short selling amount in the market value of the main board reached an all-time peak. Most institutional and individual investors could not retreat in this wave of selling.
It should be noted that according to the policy statement after the FOMC meeting and the statements of a series of officials, the Fed's interest rate hike cycle is far from over, and the pressure of capital outflow from Hong Kong stocks will exist for a long time. In addition, the Chinese concept stocks listed in the United States set off a tide of returning to Hong Kong. I am afraid that there will be a big question mark on whether Hong Kong stocks have enough liquidity to meet the super IPO of Tiktok.
Based on these circumstances, if Tiktok chooses to go public in Hong Kong at this time, the valuation of US $200billion may only become a "dream" living on the analysis reports of Bloomberg, Hurun and a number of investment banks
Concept stock carnival, investors beware of capital waving "sickle"
Whether Tiktok should be listed or not and when should it be listed still need to be considered. However, after the rumors of Tiktok's listing came out, the stock market has been restless.
On the A-share side, after the opening of trading on Monday, Tiktok concept stocks rose across the board, and nearly ten stocks such as MAXAM culture, palm reading culture and Tianlong Group rose by the limit.
Recently, the Internet sector, which has been impacted by the SEC's high-pressure policy and the global economic downturn, urgently needs Tiktok's participation to inject a dose of strength into the market.
However, the attitude of the capital market is changeable, and it is lonely after the carnival
Hong Kong stocks, which were closed for a day on Monday due to the Buddha's birthday holiday, saw a scene quite different from that of a shares after reopening on Tuesday: Tiktok concept stocks such as baozun e-commerce, China software international, China mobile game, Xinxin company and ferro holdings opened sharply lower, and the decline of baozun e-commerce once expanded to nearly 10%.
Startled by the roller coaster market, is the Tiktok concept stock reliable?
The value Institute (ID: jiazhiyanjiusuo) believes that the key to the problem lies in the information dislocation between investors, capital and the market, as well as the mentality full of contradictions and uneasiness
From the perspective of investors, the memories brought by the stock market in the past two years are not very good - strictly speaking, the last two years must be an unforgettable time for China concept Internet stocks, which have enjoyed a good reputation for more than a decade. Under the impact of batch after batch of "pre delisting lists" of the SEC and one bad financial report after another, the technology and Internet sectors fell steadily.
In this case, investors want to seize a straw - Tiktok is the best candidate.
Recall that in the first half of last year, Kwai landed on the main board of the Hong Kong stock exchange, easily becoming the largest IPO of Hong Kong stocks in the year and setting off a new upsurge for the whole people. This time, if the Tiktok, which is three times the size of the Kwai, is really launched into the market, the sensation will be absolutely extraordinary.
However, from the perspective of the market, as mentioned above, large capital players still retain the actual valuation of Tiktok and the carrying capacity of the market, not to mention various concept stocks with uneven business relevance.
After the share price got on the roller coaster, Kaichun issued an announcement to investors for the first time. During the industrial reform, Kaichun shares said that the income from related businesses with Tiktok group accounted for less than 1%. Whether Tiktok is listed or not will not have a significant impact on Kaichun's revenue and share price. We hope investors will not react too much.
In contrast, Tianlong Group, which is fully responsible for the sales of Tiktok, today's headlines and watermelon video advertising, and the revenue of Tiktok and massive engine related businesses accounts for 25%, gravity media, which provides Tiktok with operation services and advertising business, and palm reading technology, which is deeply controlled by byte beat related companies, has a higher degree of association with Tiktok group and may be a more noteworthy target.
It is true that, boosted by the news of Tiktok's listing, a number of affiliated enterprises with close business contacts are likely to benefit, but their stock price prospects and growth still need to return to their respective businesses.
The Value Research Institute (id:jiazhiyanjiusuo) believes that what investors need to do now is to wait and see calmly, take a cautious and optimistic attitude towards Tiktok concept stocks, and do not become leeks under the capital sickle due to a moment of enthusiasm
Write at the end
Like the IPO expected by Alibaba, Ningde times and other companies in those years, Tiktok has also become a fragrant steamed bun competed by a large number of Wall Street tycoons. In these two days, a guessing game of "looking for Tiktok IPO underwriters" has been launched in the capital sector.
According to the media, Goldman Sachs, the top investment bank in the United States, is expected to become the lead underwriter of Tiktok IPO. The good cooperative relationship with Zhang Yiming over the past few years and the important role played in the forced sale crisis of Tik tok are expected to earn this fat difference for Goldman Sachs. In addition, UBS and Credit Suisse, who have long-term financial cooperation with Zhang Yiming, may also obtain the joint sponsor seat.
In contrast, for competitive reasons, Morgan Stanley, Bank of America and Huaxing capital, who participated in the IPO of Kwai, may find it difficult to take another share in Tiktok, which gives opportunities to Chinese securities companies such as CICC and CSC securities.
It has to be said that the IPO rumors of Tiktok are really hot, which not only triggered heated debate among the whole people, but also made Wall Street boiling.
However, as mentioned above, considering the current unfavorable market environment and liquidity level, Tiktok may not have waited for the best time to go public. Enthusiastic investors and investment banks ready to go should be prepared to continue to wait.
Perhaps just like the business philosophy that Zhang Yiming has always adhered to: learning to delay satisfaction is a very important thing