Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet 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

<ul>
<li>Bilibili reported  C3Q23 revenue, operating profit, and GAAP net income inline, 4.37%, (21.6%) vs. consensus. The miss was primarily due to ineffective investment in game studio and related costs.</li>
<li>We are bearish on BILI’s game pipeline as ACGN is already a crowded market with well-entrenched competitors</li>
<li>We maintain our SELL rating and cut the TP from US$ 12.3 to US$ 9.04, and consider that it is unlikely for them to breakeven in 2024</li>
</ul>


Bilibili reported  C3Q23 revenue, operating profit, and GAAP net income inline, 4.37%, (21.6%) vs. consensus. The miss was primarily due to ineffective investment in game studio and related costs.
We are bearish on BILI’s game pipeline as ACGN is already a crowded market with well-entrenched competitors
We maintain our SELL rating and cut the TP from US$ 12.3 to US$ 9.04, and consider that it is unlikely for them to breakeven in 2024


[Bilibili Inc. (BILI US, SELL, TP US$9) Target Price Change]: Niche Player Faces Market Saturation

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.

<ul><li>BiliBili reported inline 3Q23 results on 29 Nov: total revenue was flat YoY at RMB5.81bn, in line with CMBI/consensus estimate of RMB5.77/5.80bn; adjusted net loss narrowed by 50% YoY and 9% QoQ to RMB878mn, but missed CMBI/consensus estimate of RMB757/778mn due to the higher-than-expected investment loss (incl. impairment).</li><li>Bili guides its FY23 total revenue to be at the lower-end of the RMB22.5-23.5bn range, which is in line with our expectation, due to the softer-than-expected performance of mobile game business.</li><li>For 4Q23E, we forecast total revenue to grow by 3% YoY to RMB6.3bn, primarily supported by growth of ad/VAS revenue (+25%/18% YoY) but partially offset by a decline in mobile games revenue (-5% YoY). </li></ul>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.

BiliBili reported inline 3Q23 results on 29 Nov: total revenue was flat YoY at RMB5.81bn, in line with CMBI/consensus estimate of RMB5.77/5.80bn; adjusted net loss narrowed by 50% YoY and 9% QoQ to RMB878mn, but missed CMBI/consensus estimate of RMB757/778mn due to the higher-than-expected investment loss (incl. impairment).Bili guides its FY23 total revenue to be at the lower-end of the RMB22.5-23.5bn range, which is in line with our expectation, due to the softer-than-expected performance of mobile game business.For 4Q23E, we forecast total revenue to grow by 3% YoY to RMB6.3bn, primarily supported by growth of ad/VAS revenue (+25%/18% YoY) but partially offset by a decline in mobile games revenue (-5% YoY). 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.

Bilibili (BILI US) – Game Business Weighed on Revenue Growth Despite Resilient Ad and VAS Business

Thematic (Sector/Industry)

<ul>
<li>With consumption in the doldrums, one would expect none growing at double digits. This is actually not the case; </li>
<li>Further, how many Chinese Growth Equity names are accelerating in growth in the second half? Quite a lot;</li>
<li>We reiterate our view that Chinese Internet names are took-all winners with strong pricing power, which are showing when they need to. The weak market sentiment is self-fulfilling.</li>
</ul>


With consumption in the doldrums, one would expect none growing at double digits. This is actually not the case; 
Further, how many Chinese Growth Equity names are accelerating in growth in the second half? Quite a lot;
We reiterate our view that Chinese Internet names are took-all winners with strong pricing power, which are showing when they need to. The weak market sentiment is self-fulfilling.


How Many Chinese Growth Equity Names Are Growing at Double Digits?

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>On 16th Nov 22, post-market close, along with its 3Q22 results Tencent also declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan.</li>
<li>The share distribution follows the template of the US$16bn worth of JD.com shares that Tencent paid out after its dividend announcement at the end of 2021.</li>
<li>In this note, we talk about the implications of the deal.</li>
</ul>


On 16th Nov 22, post-market close, along with its 3Q22 results Tencent also declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan.
The share distribution follows the template of the US$16bn worth of JD.com shares that Tencent paid out after its dividend announcement at the end of 2021.
In this note, we talk about the implications of the deal.


Tencent Meituan Dividend - The US$20bn Overhang - Impact, Placement, Index, Other Investees

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Friday in US time, the China Securities Regulatory Commission (CSRC), China's MOF, and the US Public Company Accounting Oversight Board (PCAOB) "agreed" on a Statement of Protocol.</li>
<li>This SoP sets the outlines for PCAOB access to inspect/investigate audit papers and accounting firms in China and HK for companies listed in the US.</li>
<li>The releases' difference in language is to be expected - different constituencies - but as PCAOB Chair Williams said, “Now we will find out whether those promises hold up."
</li>
</ul>


Friday in US time, the China Securities Regulatory Commission (CSRC), China's MOF, and the US Public Company Accounting Oversight Board (PCAOB) "agreed" on a Statement of Protocol.
This SoP sets the outlines for PCAOB access to inspect/investigate audit papers and accounting firms in China and HK for companies listed in the US.
The releases' difference in language is to be expected - different constituencies - but as PCAOB Chair Williams said, “Now we will find out whether those promises hold up."



CSRC and PCAOB "Agree" On Audit Terms - Now PCAOB Will Try To Prove a Negative

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$9) Target Price Change]: Niche Player Faces Market Saturation

Bilibili's Q3 results disappoint due to ineffective investment in game studio. Analysts are bearish on their game pipeline and maintain a SELL...

Blue Lotus Research Institute

Bilibili (BILI US) – Game Business Weighed on Revenue Growth Despite Resilient Ad and VAS Business

We maintain our total revenue forecast largely unchanged and see Bili remain on track for breakeven by endFY24. We maintain our SOTP-based TP of...

CMB International

How Many Chinese Growth Equity Names Are Growing at Double Digits?

More Chinese growth equity names growing at double digit than single and more are accelerating in growth in C2H24. Pessimism can turn into self...

Blue Lotus Research Institute

Tencent Meituan Dividend - The US$20bn Overhang - Impact, Placement, Index, Other Investees

On 16th Nov 22, Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan. In this note, we look...

Sumeet Singh

CSRC and PCAOB "Agree" On Audit Terms - Now PCAOB Will Try To Prove a Negative

The PCAOB and CSRC announced they had signed a Statement of Protocol which allows the PCAOB to move forward with testing whether there will be...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Bilibili Inc. (BILI US, SELL, TP US$9) Target Price Change]: Niche Player Faces Market Saturation

​Bilibili's Q3 results disappoint due to ineffective investment in game studio. Analysts are bearish on their game pipeline and maintain a SELL...

Blue Lotus Research Institute

Bilibili (BILI US) – Game Business Weighed on Revenue Growth Despite Resilient Ad and VAS Business

We maintain our total revenue forecast largely unchanged and see Bili remain on track for breakeven by endFY24. We maintain our SOTP-based TP of...

CMB International

How Many Chinese Growth Equity Names Are Growing at Double Digits?

More Chinese growth equity names growing at double digit than single and more are accelerating in growth in C2H24. Pessimism can turn into self...

Blue Lotus Research Institute

Tencent Meituan Dividend - The US$20bn Overhang - Impact, Placement, Index, Other Investees

On 16th Nov 22, Tencent declared an interim dividend by way of distribution in specie of Class B Ordinary shares of Meituan. In this note, we look...

Sumeet Singh

CSRC and PCAOB "Agree" On Audit Terms - Now PCAOB Will Try To Prove a Negative

The PCAOB and CSRC announced they had signed a Statement of Protocol which allows the PCAOB to move forward with testing whether there will be...

Travis Lundy

Bilibili's Q3 results disappoint due to ineffective investment in game studio. Analysts are bearish on their game pipeline and maintain a SELL...