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>Bilibili has announced the latest incentive policies for the "Spark Program."</li>
<li>XPEV/DiDi: Xpeng to acquire DiDi's Smart EV project and establish strategic partnership with DiDi (+/+)</li>
<li>SE / PDD: Temu enters the Philippines ( - / +)</li>
</ul>


Bilibili has announced the latest incentive policies for the "Spark Program."
XPEV/DiDi: Xpeng to acquire DiDi's Smart EV project and establish strategic partnership with DiDi (+/+)
SE / PDD: Temu enters the Philippines ( - / +)


China TMT Update-Bili/XPEV/DiDi/SE/PDD-Xpeng Acquire DiDi's EV Project/Temu Enters the Philippines

<ul>
<li>Meituan/Ctrip.com/Atour: MCT announce the third batch of destination list for outbound group travel, bodes well for outbound travel recovery</li>
<li>ZTO: Cainiao Guoguo launches RMB 1.3bn in logistics subsidies for new Taobao/Tmall SMEs (-)</li>
<li>Tencent held the 2023 WeChat Advertising Ecology Partnership Conference (+)</li>
</ul>


Meituan/Ctrip.com/Atour: MCT announce the third batch of destination list for outbound group travel, bodes well for outbound travel recovery
ZTO: Cainiao Guoguo launches RMB 1.3bn in logistics subsidies for new Taobao/Tmall SMEs (-)
Tencent held the 2023 WeChat Advertising Ecology Partnership Conference (+)


China TMT Update-Meituan/Ctrip/Atour/Baba/ZTO/Tencent/-Cainiao/WeChat Ads Conference/Outbound Travel

<ul>
<li>We updated our revenue forecasts for ByteDance (China domestic) , with the industry models. We estimate that ByteDance's domestic ad revenue/eCommerce GMV/local lifestyle GTV will grow by 17%/50%/134% this year.</li>
<li>In the advertising space, we recommend Tencent and iQIYI. Both Tencent and iQIYI experienced a decline in their advertising revenue market share in 2022, followed by a rebound in 2023.</li>
<li>In transactional GMV/GTV, we prefer Meituan and Pinduoduo. Meituan's market share experienced a significant decline in 2022, but the decline rate is expected to narrow significantly this year.</li>
</ul>


We updated our revenue forecasts for ByteDance (China domestic) , with the industry models. We estimate that ByteDance's domestic ad revenue/eCommerce GMV/local lifestyle GTV will grow by 17%/50%/134% this year.
In the advertising space, we recommend Tencent and iQIYI. Both Tencent and iQIYI experienced a decline in their advertising revenue market share in 2022, followed by a rebound in 2023.
In transactional GMV/GTV, we prefer Meituan and Pinduoduo. Meituan's market share experienced a significant decline in 2022, but the decline rate is expected to narrow significantly this year.


[Blue Lotus Multi-Platform Sector Update]: ByteDance Forecasts and Implications for China Internet

Equity Bottom-Up

<ul>
<li>We cut our revenue estimations for 2H23, mainly due to increased uncertainty surrounding the launch of "Uma Musume." </li>
<li>We also lower our estimations for live streaming due to concerns about macro factors. We slightly raise our estimations for BILI's advertising business...</li>
<li>...as we anticipate that it will benefit from gaming and e-commerce. Our rev./non-GAAP net income are 1.0% and (6.4%) vs cons in 2Q23. Cut TP to $12.3, maintaining "Sell" rating.</li>
</ul>


We cut our revenue estimations for 2H23, mainly due to increased uncertainty surrounding the launch of "Uma Musume." 
We also lower our estimations for live streaming due to concerns about macro factors. We slightly raise our estimations for BILI's advertising business...
...as we anticipate that it will benefit from gaming and e-commerce. Our rev./non-GAAP net income are 1.0% and (6.4%) vs cons in 2Q23. Cut TP to $12.3, maintaining "Sell" rating.


[Bilibili (BILI US, SELL, TP US$12.3) TP Change]: The Launch Of "Uma Musume" May Face More Delay

<ul>
<li>We suggest that both Tencent and NetEase will launch blockbuster new games in their pipelines during this year's summer vacation, with NetEase slightly surpassing Tencent.  </li>
<li>Although iQIYI, Kuaishou, and BILI each have new games, their contributions are relatively small, so we maintain a SELL rating for these three companies;</li>
<li>Investors can also pay attention to Nexon and Netmarble, two Korean game companies that are expected to benefit from the launch of new games;  </li>
</ul>


We suggest that both Tencent and NetEase will launch blockbuster new games in their pipelines during this year's summer vacation, with NetEase slightly surpassing Tencent.  
Although iQIYI, Kuaishou, and BILI each have new games, their contributions are relatively small, so we maintain a SELL rating for these three companies;
Investors can also pay attention to Nexon and Netmarble, two Korean game companies that are expected to benefit from the launch of new games;  


Blue Lotus Entertainment Sector Update: Tencent, NetEase and Kingsoft Have Strong Pipeline

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)

China TMT Update-Bili/XPEV/DiDi/SE/PDD-Xpeng Acquire DiDi's EV Project/Temu Enters the Philippines

Bilibili has announced the latest incentive policies for the "Spark Program.";XPEV/DiDi: Xpeng to acquire DiDi's Smart EV project(+/+);SE/PDD: Temu...

Blue Lotus Research Institute

China TMT Update-Meituan/Ctrip/Atour/Baba/ZTO/Tencent/-Cainiao/WeChat Ads Conference/Outbound Travel

MCT announce the third batch of destination list for outbound group travel;Cainiao Guoguo launches RMB 1.3bn in logistics subsidies;Tencent 2023...

Blue Lotus Research Institute

[Blue Lotus Multi-Platform Sector Update]: ByteDance Forecasts and Implications for China Internet

We estimate that ByteDance's domestic ad revenue/eCommerce GMV/local lifestyle GTV will grow by 17%/50%/134% this year. We prefer Tencent, iQiyi,...

Blue Lotus Research Institute

[Bilibili (BILI US, SELL, TP US$12.3) TP Change]: The Launch Of "Uma Musume" May Face More Delay

We cut our revenue estimations for 2H23, mainly due to increased uncertainty surrounding the launch of "Uma Musume." Our rev./non-GAAP net income...

Blue Lotus Research Institute

Blue Lotus Entertainment Sector Update: Tencent, NetEase and Kingsoft Have Strong Pipeline

We suggest that both Tencent and NetEase will launch blockbuster new games in their pipelines during this year's summer vacation, with NetEase...

Blue Lotus Research Institute

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