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 Baidu’s 4Q22 top line/bottom line would miss cons. by (1.6%)/(3.1%), mostly driven by the temporal disturbance of increasing COVID cases after reopening in Dec. 2022. </li>
<li>However, we remain optimistic about 2023 outlook: 1) Baidu’s ads would be recovering quickly in 1H23 as macro improves, and 2) leading position in AIGC development gives Baidu more potential.</li>
<li>Maintain BUY rating and raise TP to US$170, implying 17.2X PE in 2023</li>
</ul>


We estimate that Baidu’s 4Q22 top line/bottom line would miss cons. by (1.6%)/(3.1%), mostly driven by the temporal disturbance of increasing COVID cases after reopening in Dec. 2022. 
However, we remain optimistic about 2023 outlook: 1) Baidu’s ads would be recovering quickly in 1H23 as macro improves, and 2) leading position in AIGC development gives Baidu more potential.
Maintain BUY rating and raise TP to US$170, implying 17.2X PE in 2023


Baidu (Bidu.US): AIGC to Bring More Potential and Empower Search Biz

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.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hesai-group" target="_blank" data-smartkarma-citation="entities:36743:1" rel="noopener">Hesai Group (HSAI US)</a> (HSAI) raised around US$190m in its US IPO.</li>
<li>HSAI is a manufacturer of three-dimensional light detection and ranging (Lidar) solutions. It has shipped over 103,000 Lidar units from 2017 to the end of 2022.</li>
<li>We have looked at the company’s past performance and valuations. In this note, we will talk about the trading updates.</li>
</ul>



Hesai Group (HSAI US) (HSAI) raised around US$190m in its US IPO.
HSAI is a manufacturer of three-dimensional light detection and ranging (Lidar) solutions. It has shipped over 103,000 Lidar units from 2017 to the end of 2022.
We have looked at the company’s past performance and valuations. In this note, we will talk about the trading updates.


Hesai Group IPO Trading - Managed to Break the Drought

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>Baidu’s core ads business is on track for recovery in January 2023 and we expect search ads demand will benefit from faster than expected offline activities recovery in 1Q23, evidenced by robust offline travel and commerce traffic since Chinese New Year.</li><li>Search ads demand faced significant pressure due to offline activities disruptions in 2022, the faster than expected normalization would bring search ads demand back to normalized pace.</li><li>Baidu has accumulated strong AI technological capability, and with improving core search ads business outlook in 2023, the progress in large scale monetization of ASD and earlier than expected breakeven of cloud business would serve as solid fundamentals support for its stock price. </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.

Baidu’s core ads business is on track for recovery in January 2023 and we expect search ads demand will benefit from faster than expected offline activities recovery in 1Q23, evidenced by robust offline travel and commerce traffic since Chinese New Year.Search ads demand faced significant pressure due to offline activities disruptions in 2022, the faster than expected normalization would bring search ads demand back to normalized pace.Baidu has accumulated strong AI technological capability, and with improving core search ads business outlook in 2023, the progress in large scale monetization of ASD and earlier than expected breakeven of cloud business would serve as solid fundamentals support for its stock price. 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.

Baidu (BIDU US) – Core Business Recovery on Track with More to Expect on New Initiatives

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Cross Asset Strategy

<ul>
<li>
In Depth: What’s worrying regulators about China’s mutual fund boom
</li>
<li>
China calls balloon incident a ‘test’ for U.S. to improve relations
</li>
<li>
China stock exchanges appoint IPO review committees to clean up listings
</li>
</ul>



In Depth: What’s worrying regulators about China’s mutual fund boom


China calls balloon incident a ‘test’ for U.S. to improve relations


China stock exchanges appoint IPO review committees to clean up listings



CX Daily: What’s Worrying Regulators About China’s Mutual Fund Boom

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/hesai-group" target="_blank" data-smartkarma-citation="entities:36743:1" rel="noopener">Hesai Group (HSAI US)</a> has launched a Nasdaq IPO to raise up to US$171 million at an indicative price range of US$17-19 per ADS.</li>
<li>We previously discussed the IPO in <a href="https://www.smartkarma.com/insights/hesai-group-ipo-the-bull-case" target="_blank" data-smartkarma-citation="insights:95074" rel="noopener">Hesai Group IPO: The Bull Case</a> and <a href="https://www.smartkarma.com/insights/hesai-group-ipo-the-bear-case" target="_blank" data-smartkarma-citation="insights:95100" rel="noopener">Hesai Group IPO: The Bear Case</a>. </li>
<li>In this note, we present our forecasts and discuss valuation. Our analysis suggests that Hesai is unattractively valued at the IPO price range. We would pass on the IPO.</li>
</ul>



Hesai Group (HSAI US) has launched a Nasdaq IPO to raise up to US$171 million at an indicative price range of US$17-19 per ADS.
We previously discussed the IPO in Hesai Group IPO: The Bull Case and Hesai Group IPO: The Bear Case. 
In this note, we present our forecasts and discuss valuation. Our analysis suggests that Hesai is unattractively valued at the IPO price range. We would pass on the IPO.


China

Baidu, Inc. operates an Internet search engine. The Company offers algorithmic search, enterprise search, news, MP3, and image searches, voice assistance, online storage, and navigation services. Baidu serves clients globally.

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Baidu (BIDU US)

Baidu (Bidu.US): AIGC to Bring More Potential and Empower Search Biz

We remain optimistic about Baidu’s 2023 outlook: 1) Baidu’s ads would be recovering quickly in 1H23 as macro improves, and 2) leading position in...

Blue Lotus Research Institute

Hesai Group IPO Trading - Managed to Break the Drought

Hesai Group (HSAI US) raised around US$190m in its US IPO. We have looked at the company's performance in our previous note, in this note we will...

Sumeet Singh

Baidu (BIDU US) – Core Business Recovery on Track with More to Expect on New Initiatives

Search ads demand faced significant pressure due to offline activities disruptions in 2022, the faster than expected normalization would bring...

CMB International

CX Daily: What’s Worrying Regulators About China’s Mutual Fund Boom

In Depth: What’s worrying regulators about China’s mutual fund boom China calls balloon incident a ‘test’ for U.S. to improve relations China...

Caixin Global

Hesai Group IPO: Valuation Insights

In this note, we present our forecasts and discuss valuation. Our analysis suggests that Hesai is unattractively valued at the IPO price range. We...

Arun George

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