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

Thematic (Sector/Industry)

<ul>
<li>NTES/700.HK: China’s NPPA publishes list of 89 domestic game code approval</li>
<li>9995HK/1801HK：RemeGen explored ADC-PD1 combination theray for its RC88 and RC108 with Innovent (-)</li>
<li>LKNCY/2150HK/ATAT/3690HK: Tourism spending maintain stable growth during Dragon Boat Festival, indicating sustainable recovery in service oriented consumption in China.(+)</li>
</ul>


NTES/700.HK: China’s NPPA publishes list of 89 domestic game code approval
9995HK/1801HK：RemeGen explored ADC-PD1 combination theray for its RC88 and RC108 with Innovent (-)
LKNCY/2150HK/ATAT/3690HK: Tourism spending maintain stable growth during Dragon Boat Festival, indicating sustainable recovery in service oriented consumption in China.(+)


China TMT Update-NTES/700.HK/9995HK/1801HK/LKNCY/2150HK/ATAT/3690HK:Game Code,ADC-PD1, Tourism Spend

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<ul>
<li>Q123 Net Revenue was strong, exceeding Q119 (pre-Covid) levels by over 12%</li>
<li>Almost six months into recovery, <a href="https://www.smartkarma.com/entities/trip-com-group-ltd" target="_blank" data-smartkarma-citation="entities:180:1" rel="noopener">Trip.com (TCOM US)</a> has also managed SG&amp;A expenses well</li>
<li>A good result for the company, but we see no reason to alter our long-term view</li>
</ul>


Q123 Net Revenue was strong, exceeding Q119 (pre-Covid) levels by over 12%
Almost six months into recovery, Trip.com (TCOM US) has also managed SG&amp;A expenses well
A good result for the company, but we see no reason to alter our long-term view


Trip.com Q123 | Revenue Surges Past Q119 Level | Decade-High Margin | But Our Thesis Is Unchanged

Atour Lifestyle Holdings / Equity Bottom-Up

<ul>
<li>Atour reported its 1Q23 revenue 2.8%/4.3% higher than our est./cons., and non-GAAP NI 22.7%/38.8% higher than our est./cons. The bottom-line beat is driven by strong sales growth from Occ. </li>
<li>We expect 2Q23/2023 rev. to grow 75%/65% YoY, implying 115%/112% of RevPAR recovery rate vs. 2019 and 85/291 net new hotels. </li>
<li>We maintain the BUY rating, and raise TP by US$1 to US$35 to factor in the higher gross margin expectation at 40% in 2023.</li>
</ul>


Atour reported its 1Q23 revenue 2.8%/4.3% higher than our est./cons., and non-GAAP NI 22.7%/38.8% higher than our est./cons. The bottom-line beat is driven by strong sales growth from Occ. 
We expect 2Q23/2023 rev. to grow 75%/65% YoY, implying 115%/112% of RevPAR recovery rate vs. 2019 and 85/291 net new hotels. 
We maintain the BUY rating, and raise TP by US$1 to US$35 to factor in the higher gross margin expectation at 40% in 2023.


[Atour Lifestyle (ATAT US) Target Price Change]: Strong Sales Growth Support Expansion, Maintain BUY

<ul>
<li>NTES: Justice Mobile launches 2nd round of closed beta test (-)</li>
<li>PDD: PDD announces RMB 4bn in subsidies for annual May 5th Shopping Festival (+)</li>
<li>LKNCY/2150HK/ATAT: Labor Day holiday Tourism consumption recovered to pre-covid level in labor day holiday, and catering sector is leading the retail recovery trend.(+)</li>
</ul>


NTES: Justice Mobile launches 2nd round of closed beta test (-)
PDD: PDD announces RMB 4bn in subsidies for annual May 5th Shopping Festival (+)
LKNCY/2150HK/ATAT: Labor Day holiday Tourism consumption recovered to pre-covid level in labor day holiday, and catering sector is leading the retail recovery trend.(+)


China TMT Update (May 5-Pt1): NTES/PDD/LKNCY/2150HK/ATAT：Justice Mobile Launches 2nd Round Test

<ul>
<li>Chinese outbound air travel in the region surged in March, up 50%+ versus February</li>
<li>Domestic improvement more muted, but still up about 75% Y/Y in Q123</li>
<li>Is the expected recovery on track? Sure, but so far no upside surprises for investors</li>
</ul>


Chinese outbound air travel in the region surged in March, up 50%+ versus February
Domestic improvement more muted, but still up about 75% Y/Y in Q123
Is the expected recovery on track? Sure, but so far no upside surprises for investors


Chinese Outbound Tourism Recovery Accelerates, But Still a Fraction of Pre-Covid Level

China

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.

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Atour Lifestyle Holdings (ATAT US)

China TMT Update-NTES/700.HK/9995HK/1801HK/LKNCY/2150HK/ATAT/3690HK:Game Code,ADC-PD1, Tourism Spend

NTES/700.HK: 89 domestic game code approval；9995HK/1801HK：RemeGen explored ADC-PD1 combination theray；LKNCY/2150HK/ATAT/3690HK: Tourism spending...

Blue Lotus Research Institute

Trip.com Q123 | Revenue Surges Past Q119 Level | Decade-High Margin | But Our Thesis Is Unchanged

Trip.com posted a strong result in Q123, with Revenue finally above pre-Covid levels and core margins at a decade-high. But management seemed to...

Tracking Traffic

[Atour Lifestyle (ATAT US) Target Price Change]: Strong Sales Growth Support Expansion, Maintain BUY

We maintain the BUY rating, and raise TP by US$1 to US$35 to factor in the higher gross margin expectation at 40% in 2023

Blue Lotus Research Institute

China TMT Update (May 5-Pt1): NTES/PDD/LKNCY/2150HK/ATAT：Justice Mobile Launches 2nd Round Test

Labor Day holiday Tourism consumption recovered.(+) NTES: Justice Mobile launches 2nd round of closed beta test (-) PDD: PDD announces RMB 4bn in...

Blue Lotus Research Institute

Chinese Outbound Tourism Recovery Accelerates, But Still a Fraction of Pre-Covid Level

Chinese tourism activity accelerated last month (particularly outbound travel), but it remains at a fraction of pre-Covid levels -- we see no...

Tracking Traffic

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