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

Equity Bottom-Up

Atour Lifestyle Holdings / Equity Bottom-Up

Atour Lifestyle Holdings Limited operates as a holding company. The Company, through its subsidiaries, owns and manages midscale hotel chain through offline and online channels, including mobile application and weixin-wechat mini program. Atour Lifestyle Holdings serves customers in China.

<ul>
<li>Atour (ATAT) reported C3Q24 revenue 2.3% lower than our estimate but 4.8% higher than consensus. The net income beat our estimate/consensus by 6.6%/9.5%, thanks to disciplined cost controls.</li>
<li>Although RevPAR weakened in C3Q24 as expected, turnaround is coming already in C4Q24. We also expect moderate RevPAR growth in 2025.</li>
<li>We keep the TP at US$37/ADS and maintain a TOP BUY on Atour.</li>
</ul>


Atour (ATAT) reported C3Q24 revenue 2.3% lower than our estimate but 4.8% higher than consensus. The net income beat our estimate/consensus by 6.6%/9.5%, thanks to disciplined cost controls.
Although RevPAR weakened in C3Q24 as expected, turnaround is coming already in C4Q24. We also expect moderate RevPAR growth in 2025.
We keep the TP at US$37/ADS and maintain a TOP BUY on Atour.


[Atour (ATAT US, BUY, TP US$37) Review]: Small Differences Here & There but Overall Case Intact

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.

KE Holdings Inc. operates as an integrated online and offline platform for housing transactions and services. The Company offers existing and new home sales, home rentals, home renovation, real estate financial solutions, and other services. KE Holdings conducts businesses in China.

<ul><li>Beike reported (21 Nov) 3Q24 results: revenue increased 27% YoY to RMB22.6bn, 1.5%/4.7% below Bloomberg consensus/CMBI estimates, mainly due to the mixed performance where existing home GTV (EHT) was dragged by low home transaction sentiment and new home transactions (NHT) were benefited from market share gains.</li><li>Non-GAAP net income was RMB1.8bn, representing a margin of 7.9%, in-line with both our estimates and consensus, thanks to fee controlling measures. We remain positive on Beike given its continuously increasing market share in EHT &amp; NHT businesses and smooth expansion of new business.</li><li>Our SOTP-based target price is lifted to US$23.3 (was US$21.5), including US$22.3 for Beike Core and US$0.9 for Shengdu, translating into 21.4x 2025E PE (non-GAAP). Maintain BUY</li></ul><p><em>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.</em></p>

Beike reported (21 Nov) 3Q24 results: revenue increased 27% YoY to RMB22.6bn, 1.5%/4.7% below Bloomberg consensus/CMBI estimates, mainly due to the mixed performance where existing home GTV (EHT) was dragged by low home transaction sentiment and new home transactions (NHT) were benefited from market share gains.Non-GAAP net income was RMB1.8bn, representing a margin of 7.9%, in-line with both our estimates and consensus, thanks to fee controlling measures. We remain positive on Beike given its continuously increasing market share in EHT &amp; NHT businesses and smooth expansion of new business.Our SOTP-based target price is lifted to US$23.3 (was US$21.5), including US$22.3 for Beike Core and US$0.9 for Shengdu, translating into 21.4x 2025E PE (non-GAAP). Maintain BUYContent 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.

Ke Holdings (BEKE US) - To Ride on the Policy Tailwind in 4Q

Senior Credit Analyst, Lucror Analytics

Leonard Law, CFA

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

China Vanke Co., Ltd. operates real estate development businesses.  The Company provides housing renovation, housing loans, real estate brokerage, and other businesses. China Vanke also operates logistics, material supply, and other businesses.

<ul>
<li>In today's Morning Views publication we comment on developments of the following high yield issuers: China Vanke, Gajah Tunggal, ReNew Energy, Adani Green Energy, Bharti Airtel, UPL Limited</li>
<li>Treasuries fell yesterday, with yields up 1-3 bps across the curve following a soft auction of 20Y notes.</li>
<li>The yield on the 2Y UST rose 3 bps to 4.32%, while that on the 10Y UST was up 1 bp at 4.41%.</li>
</ul>


In today's Morning Views publication we comment on developments of the following high yield issuers: China Vanke, Gajah Tunggal, ReNew Energy, Adani Green Energy, Bharti Airtel, UPL Limited
Treasuries fell yesterday, with yields up 1-3 bps across the curve following a soft auction of 20Y notes.
The yield on the 2Y UST rose 3 bps to 4.32%, while that on the 10Y UST was up 1 bp at 4.41%.


New Zealand Professional Investment Services Firm, Forsyth Barr

Forsyth Barr

New Zealand Professional Investment Services Firm

We are proud to be a New Zealand owned firm, with 21 offices throughout the country and over 300 employees. We assist personal, institutional and corporate clients providing a full range of investment services.

Forsyth Barr is a foundation New Zealand Exchange firm (NZX) and accredited market participant. We have been confirmed by the Financial Markets Authority as a Qualifying Financial Entity (QFE).

Research is the cornerstone of our advice. We have one of New Zealand's leading teams of analysts. Our global affiliations ensure comprehensive research coverage of all major investment markets.

Argosy Property Limited invests in and manages retail, commercial and industrial properties in New Zealand.

<ul><li>Argosy (ARG) reported a soft 1H25, in line with our expectations.</li><li>Higher tax from depreciation rule changes was the key drag, with adjusted funds from operations (AFFO) -9% on the prior year.</li><li>ARG reiterated its guidance of 6.65 cents per share, which is c.104% of our forecast FY25 AFFO, above its policy of 85%–100%. </li></ul>

Argosy (ARG) reported a soft 1H25, in line with our expectations.Higher tax from depreciation rule changes was the key drag, with adjusted funds from operations (AFFO) -9% on the prior year.ARG reiterated its guidance of 6.65 cents per share, which is c.104% of our forecast FY25 AFFO, above its policy of 85%–100%. 

Argosy - 1H25 — Bolstering the Development Pipeline

Vital Healthcare Property Trust / Equity Bottom-Up

Vital Healthcare Property Trust is a property trust that invests in and manages healthcare facilities in New Zealand and Australia.

<ul><li>Vital Healthcare (VHP) has announced a proposal to restructure as a Dual Listed Trust (DLT).</li><li>This attempts to address some of VHP's key challenges, being: (1) the tax inefficiencies of owning Australian property assets in a NZ listed portfolio investment entity (PIE), (2) VHP's shares trading at large discount to NTA, with relatively low liquidity, and (3) access to broader sources of capital.</li><li>Whilst we see merit in the proposed structure, given improved access to capital and potential earnings and value accretion, it does introduce complexity and significantly reduces the size (and likely the liquidity) of the NZ listed vehicle.</li></ul>

Vital Healthcare (VHP) has announced a proposal to restructure as a Dual Listed Trust (DLT).This attempts to address some of VHP's key challenges, being: (1) the tax inefficiencies of owning Australian property assets in a NZ listed portfolio investment entity (PIE), (2) VHP's shares trading at large discount to NTA, with relatively low liquidity, and (3) access to broader sources of capital.Whilst we see merit in the proposed structure, given improved access to capital and potential earnings and value accretion, it does introduce complexity and significantly reduces the size (and likely the liquidity) of the NZ listed vehicle.

Vital Healthcare - The Ins and Outs of DLTs