2018年H2亚洲洞察力（英文版）_20页_2mb

GP.Bullhound: Asia Inbound and Outbound Transactions H2-2018 Summary

Core Content

• Investment Trends: The lion's share of investments into the Asia-Pacific (APAC) region in H2-2018 came from the US, with 88% of the total investment, while Europe accounted for 12%. This reflects a growing trend of European investment into APAC, up from 4% in 2017.
• China's Domestic Economy: China's domestic economy faced challenges in H2-2018, including bear markets, liquidity constraints, and a decline in funding volume, which impacted both domestic and outbound investments.
• US-China Trade War Impact: The trade war intensified in H2-2018, leading to stricter regulations on Chinese investments in the US tech sector. The US signed a bill to expand CFIUS authority, and European countries like Germany and the UK also increased oversight.
• Inbound Investment from Europe and the US: Despite political tensions, inbound investment into Asia increased, with over $86 billion invested. The US remained the largest investor, but Europe's share rose significantly.
• China as Preferred Target: China remained the primary target for outbound investments, but there was notable activity in India, including Walmart's $16 billion acquisition of Flickpart and Naspers and DST's $1 billion investment in Swiggy.
• Japanese Outbound Activity: Japan led in outbound transactions into Europe and the US, with 66 completed deals in H2-2018. The "Softbank effect" played a key role, with two transactions exceeding $1 billion.
• IPO Activity: Chinese tech companies saw a record number of IPOs in the US and Hong Kong in 2018, but post-IPO share prices were at record lows. This led to a potential shift towards M&A exits.

Key Themes

• Outbound Tech Investment Slowdown: Outbound investments from China to Europe and the US slowed mainly due to economic and political factors.
• Revival of Inbound Investment: Inbound investment from Europe and the US into Asia showed a revival, with increased focus on technology assets.
• Japanese Investment Surge: Japan's outbound investment into European and US businesses surged, driven by SoftBank's strategic investments and broader investor interest.
• IPO Performance: Chinese tech companies raised significant capital through IPOs, but their post-IPO performance was weak, prompting a shift in exit strategies.
• Strategic M&A Activity: Several high-value M&A deals occurred, including SoftBank's investment in various tech firms and Walmart's acquisition of Flickpart.

Key Financials and Metrics

• BAT (Baidu, Alibaba, Tencent):

  • Market Cap: Alibaba had the highest market cap at $352.5 billion, followed by Tencent at $379.1 billion and Baidu at $55.3 billion.
  • P/E and EV/EBITDA Multiples: Alibaba had a P/E of 26.5x and EV/EBITDA of 21.4x in 2018, with expected declines in 2019.
  • Financial Performance: Alibaba showed strong growth in cloud computing and e-commerce, while Baidu focused on AI and cloud business expansion.

• Public Comparables:

  • Large Cap Consolidators: Alibaba, Tencent, and Baidu were the leading companies in terms of market cap and financial performance.
  • E-Commerce: Alibaba dominated the sector with a significant market cap and strong financial metrics.
  • Consultancies: Tata Consultancy Services and Infosys led in the sector, with high gross margins and stable EBITDA margins.
  • Telecoms & Operators: Samsung and China Mobile were the top companies, with notable revenue growth and market cap changes.
  • Digital Media: NetEase and Tencent Music Entertainment Group were key players, showing varied performance in terms of market cap and financial indicators.

Summary of Key Deals

Fundraises

• View: $1.1 billion by SoftBank
• WeWork: $1 billion by SoftBank
• Trendyol: $728 million by Alibaba.com
• Automation Anywhere: $550 million by SoftBank, NEA, Goldman Sachs, and General Atlantic
• Cambridge Mobile Telematics: $500 million by SoftBank

M&A

• ZPG: $3.4 billion by GIC and SilverLake
• KMD: $1.2 billion by NEC
• Action: $330 million by HCL SEP
• QUARTZ: $110 million by UZABASE
• dataArtisans: $103 million by Alibaba.com
• Flipkart: $16 billion by Walmart
• intelenet: $1 billion by Teleperformance
• indus: $29 million by EBIX

Conclusion

H2-2018 saw a mix of investment trends, with a slowdown in outbound tech investment from China due to economic and political pressures, while inbound investment from the US and Europe into Asia showed resilience. Japan emerged as a significant player in outbound investments, and Chinese tech companies, despite strong IPO activity, faced challenges in post-IPO performance, prompting a shift in exit strategies. The key players in the tech sector, such as BAT, demonstrated strong financial metrics and strategic moves, while public comparables across different sectors highlighted varying levels of performance and growth.