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>TME reported C3Q23 revenue, non-IFRS operating profit and IFRS net income inline, 12.9%, 2.3% vs. consensus. The bottom-line beat mainly due to the cost-effective operation and music subscription services.</li>
<li>We notice TME has become less reliable on live streaming and more on monetizing its user base through ARPU enhancement</li>
<li>We upgraded TME to BUY and raised the target price to US$ 9.7, implying a 21.1x PE ratio compared to its current trading at 17.8x in 2024.</li>
</ul>


TME reported C3Q23 revenue, non-IFRS operating profit and IFRS net income inline, 12.9%, 2.3% vs. consensus. The bottom-line beat mainly due to the cost-effective operation and music subscription services.
We notice TME has become less reliable on live streaming and more on monetizing its user base through ARPU enhancement
We upgraded TME to BUY and raised the target price to US$ 9.7, implying a 21.1x PE ratio compared to its current trading at 17.8x in 2024.


[Tencent Music (TME US, BUY, TP US$9.7) Rating Change]: Unique Content Unlocked Paying Potential

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>
<a href="https://www.smartkarma.com/entities/robosense-technology-co-ltd" target="_blank" data-smartkarma-citation="entities:39903:1" rel="noopener">Robosense Technology (2498 HK)</a> raised around US$126m in its Hong Kong IPO in Jan 2024. The lockup on its shareholders will expire soon.</li>
<li>The company provides LiDAR and perception solutions to its customers. As of March 2024, it had design wins for mass production of LiDAR products with 22 automotive OEMs and suppliers.</li>
<li>In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.</li>
</ul>



Robosense Technology (2498 HK) raised around US$126m in its Hong Kong IPO in Jan 2024. The lockup on its shareholders will expire soon.
The company provides LiDAR and perception solutions to its customers. As of March 2024, it had design wins for mass production of LiDAR products with 22 automotive OEMs and suppliers.
In this note, we talk about the upcoming lock-up expiry and possible deal dynamics.


Robosense IPO Lock-Up Expiry - US$2.8bn Lockup Expiry for 99% of the Stock, CCASS Movement

China/Asia TMT

Shawn Yang

<ul>
<li>TME reported in-line results with continued divergence in its two major businesses: Online music increased by 48% YoY, while social entertainment declined by 25% YoY.</li>
<li>We expect these trends to continue, with online music benefiting from price increases and social entertainment facing ongoing challenges from competition, regulations, and macro influences.</li>
<li>Recently, Douyin has been advancing the integration of its large entertainment division. We anticipate that this will pose pressure on TME. Remain SELL and cut TP to US$ 5.7.</li>
</ul>


TME reported in-line results with continued divergence in its two major businesses: Online music increased by 48% YoY, while social entertainment declined by 25% YoY.
We expect these trends to continue, with online music benefiting from price increases and social entertainment facing ongoing challenges from competition, regulations, and macro influences.
Recently, Douyin has been advancing the integration of its large entertainment division. We anticipate that this will pose pressure on TME. Remain SELL and cut TP to US$ 5.7.


[Tencent Music (TME US, SELL, TP US$5.7) TP Change]: Competition Remains the Biggest Downward Factor

<ul>
<li>We expect that Tencent’s C3Q23’s revenue/non-IFRS operating profit/IFRS net income to be 2.3%/3.3%/4.2% above consensus.</li>
<li>We raised estimates of Tencent’s international game growth to 12% YoY to reflect the success. We also expect Tencent's advertising business to benefit from e-commerce advertisers’ competition.</li>
<li>We raised the Target Price to HK$425, which implies 22.4X PE in 2024.</li>
</ul>


We expect that Tencent’s C3Q23’s revenue/non-IFRS operating profit/IFRS net income to be 2.3%/3.3%/4.2% above consensus.
We raised estimates of Tencent’s international game growth to 12% YoY to reflect the success. We also expect Tencent's advertising business to benefit from e-commerce advertisers’ competition.
We raised the Target Price to HK$425, which implies 22.4X PE in 2024.


[Tencent(700 HK,BUY,TP HK$425)Target Price Change]: International Game and Advertising Drove Results

APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC IPOs & Placements

Equity Capital Markets

IDFC First Bank Limited / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/idfc-first-bank-limited" target="_blank" data-smartkarma-citation="entities:26934:1" rel="noopener">IDFC First Bank Limited (IDFCBK IN)</a> plans to launch a Qualified Institutional Placement (QIP) of up to INR30bn (US$362m) in Oct 23, as per media reports. </li>
<li>On 22nd Sep 23, IFR had reported that IDFC First Bank is looking to launch a Qualified Institutional Placement (QIP) to raise up to INR30bn (US$362m) in Oct 23. </li>
<li>In this note, we will talk about the possible placement and other deal dynamics.</li>
</ul>



IDFC First Bank Limited (IDFCBK IN) plans to launch a Qualified Institutional Placement (QIP) of up to INR30bn (US$362m) in Oct 23, as per media reports. 
On 22nd Sep 23, IFR had reported that IDFC First Bank is looking to launch a Qualified Institutional Placement (QIP) to raise up to INR30bn (US$362m) in Oct 23. 
In this note, we will talk about the possible placement and other deal dynamics.


IDFC First Bank Early Look - Likely to Be an Accretive Deal but Not Particularly Cheap

China

Tencent Music Entertainment operates an online music entertainment platform in China. The Company offers platform that comprises of online music, recording, music-centric live streaming enabling users to discover, listen, sing, watch, perform, and socialize music.

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Tencent Music (TME US)