China/Asia TMT

Shawn Yang

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

<ul>
<li>We estimate that BILI’s 1Q23 rev./adj. net income are 3%/11% vs cons. </li>
<li>We raise gaming/ads revenue starting from 2Q23 because of 1) an increasing number of newly approved games; and 2) increasing possibilities that pre-roll ads could be launched. </li>
<li>Yet, we still maintain SELL rating and TP unchanged because of concerns about its content ecosystem. Our TP implies 1.7X PS in 2023.</li>
</ul>


We estimate that BILI’s 1Q23 rev./adj. net income are 3%/11% vs cons. 
We raise gaming/ads revenue starting from 2Q23 because of 1) an increasing number of newly approved games; and 2) increasing possibilities that pre-roll ads could be launched. 
Yet, we still maintain SELL rating and TP unchanged because of concerns about its content ecosystem. Our TP implies 1.7X PS in 2023.


[Bilibili Inc. (BILI US, SELL, TP US$15.4)]: Long-Term Challenge Exists Amid Short-Term Catalysts

Thematic (Sector/Industry)

<ul>
<li>BILI/ 700 HK: April domestic game codes published by NPPA</li>
<li>JD/ PDD/ BABA/JDL: JD commits to maintain its low-price strategy</li>
<li>BABA/PDD/JD/VIPS: Taobao cancels fees and adjusts algorithm for upcoming “Super Cost-effective Event”</li>
</ul>


BILI/ 700 HK: April domestic game codes published by NPPA
JD/ PDD/ BABA/JDL: JD commits to maintain its low-price strategy
BABA/PDD/JD/VIPS: Taobao cancels fees and adjusts algorithm for upcoming “Super Cost-effective Event”


Baba/Pdd/Jd/Vips/BILI/700 HK/JDL: China TMT Update(Apr.24) - Taobao Cancels Fees for Promotion Event

<ul>
<li>BILI: Some BILI content creators reportedly cease to upload videos due to monetization(-)</li>
<li>BEKE: Housing transaction volume continue ramp up in March 2023(+)</li>
<li>9995HK: BioNTech signed ADC license deal with a Chinese startup (-)</li>
</ul>


BILI: Some BILI content creators reportedly cease to upload videos due to monetization(-)
BEKE: Housing transaction volume continue ramp up in March 2023(+)
9995HK: BioNTech signed ADC license deal with a Chinese startup (-)


China TMT Update - BILI/BEKE/9995HK -Some BILI Content Creators Reportedly Cease to Upload Videos(-)

<ul>
<li>Baba: Baba management holds a call with investors to explain recent movements. </li>
<li>700HK/ 1024HK/ BILI/ BIDU：Wechat Open Class is held, more features are announced（+/-/-/-）</li>
<li>ATAT：Accor formed alliance with Douyin to further explore independent growth (+)</li>
</ul>


Baba: Baba management holds a call with investors to explain recent movements. 
700HK/ 1024HK/ BILI/ BIDU：Wechat Open Class is held, more features are announced（+/-/-/-）
ATAT：Accor formed alliance with Douyin to further explore independent growth (+)


China TMT Update(Mar.31) - Baba/ 700HK/1024HK/BILI/BIDU/ATAT: Baba Management's Call

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

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.

<ul>
<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 4Q2022 results yesterday. Revenue increased 15.8% YoY to RMB28.3bn (vs consensus RMB27.3bn) while reported operating losses narrowed to RMB1.24bn (vs consensus RMB1.7bn).</li>
<li>We forecasted Kuaishou’s revenue to increase by about 11.2% in 4Q2022, however, strong performance of Livestreaming and Online ad helped achieve better-than-expected results.</li>
<li>Domestic Business' OPM improved further with expanding overseas revenues and we expect Kuaishou’s profitability to continue to improve.</li>
</ul>



Kuaishou Technology (1024 HK) reported 4Q2022 results yesterday. Revenue increased 15.8% YoY to RMB28.3bn (vs consensus RMB27.3bn) while reported operating losses narrowed to RMB1.24bn (vs consensus RMB1.7bn).
We forecasted Kuaishou’s revenue to increase by about 11.2% in 4Q2022, however, strong performance of Livestreaming and Online ad helped achieve better-than-expected results.
Domestic Business' OPM improved further with expanding overseas revenues and we expect Kuaishou’s profitability to continue to improve.


Kuaishou: Strong Earnings Beat with Further Upside

China

Bilibili Inc. provides online entertainment services. The Company offers a platform that covers a wide array of genres and media formats, including videos, live broadcasting, mobile games, animation, and comics. Bilibili serves customers in China.

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Bilibili (BILI US)

[Bilibili Inc. (BILI US, SELL, TP US$15.4)]: Long-Term Challenge Exists Amid Short-Term Catalysts

We raise gaming/ads revenue starting from 2Q23. Yet, we still maintain SELL rating and TP unchanged because of concerns about its content ecosystem.

Blue Lotus Research Institute

Baba/Pdd/Jd/Vips/BILI/700 HK/JDL: China TMT Update(Apr.24) - Taobao Cancels Fees for Promotion Event

BILI/700HK: April domestic game codes published by NPPA;JD/PDD/BABA/JDL: JD commits to maintain its low-price strategy; Taobao cancels fees for...

Blue Lotus Research Institute

China TMT Update - BILI/BEKE/9995HK -Some BILI Content Creators Reportedly Cease to Upload Videos(-)

9995HK: BioNTech signed ADC license deal with a Chinese startup; BILI: Some BILI content creators reportedly cease to upload videos(-); BEKE:...

Blue Lotus Research Institute

China TMT Update(Mar.31) - Baba/ 700HK/1024HK/BILI/BIDU/ATAT: Baba Management's Call

700HK/1024HK/BILI/BIDU：Wechat Open Class is held; ATAT：Accor formed alliance with Douyin to further explore independent growth in China ; key...

Blue Lotus Research Institute

Kuaishou: Strong Earnings Beat with Further Upside

Kuaishou's 4Q2022 earnings beat consensus estimates. Operating losses further reduced and domestic biz's OPM improved further. Kuaishou has...

Shifara Samsudeen, ACMA, CGMA

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