Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<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, <em>“Now we will find out whether those promises hold up."</em>
</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

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

Thematic (Sector/Industry)

<ul>
<li>JD US/BABA US/PDD US: Government Regulation Forces Cancellation of "Refund Without Return" Policy (+/+/-)</li>
<li>700 HK: Tencent Games SPARK Conference Reveals R&amp;D Progress for Multiple Titles Including &lt;Honor of Kings: World&gt; (+)</li>
<li>BIDU US:Baidu launches the AI agent app "Xin Xiang," which is similar to Manus(/)</li>
</ul>


JD US/BABA US/PDD US: Government Regulation Forces Cancellation of "Refund Without Return" Policy (+/+/-)
700 HK: Tencent Games SPARK Conference Reveals R&amp;D Progress for Multiple Titles Including &lt;Honor of Kings: World&gt; (+)
BIDU US:Baidu launches the AI agent app "Xin Xiang," which is similar to Manus(/)


[Blue Lotus Daily-TMT Update]:JD US/BABA US/PDD US/700 HK/BIDU US/3690 HK/NTES US/BILI US/E-Commerce

<ul>
<li>Tencent and NetEase games showed strong during CNY, echoing strong box office showing. Express delivery data suggested robust e-commerce performance;</li>
<li>However, as a big ticket item with no subsidies support, housing market petered out quickly after CNY, which suggests recovery is still fragile;</li>
<li>Meituan's milk tea order volume jumped after introducing social gift functions. Meituan and JD.com are two beneficiaries of social gifting from the GMV angle with Tencent from the advertising angle.</li>
</ul>


Tencent and NetEase games showed strong during CNY, echoing strong box office showing. Express delivery data suggested robust e-commerce performance;
However, as a big ticket item with no subsidies support, housing market petered out quickly after CNY, which suggests recovery is still fragile;
Meituan's milk tea order volume jumped after introducing social gift functions. Meituan and JD.com are two beneficiaries of social gifting from the GMV angle with Tencent from the advertising angle.


[Blue Lotus Non-US Internet Weekly, 6/52]: Consumption Warmed Up During CNY Except Housing

Analyst - Media&Entertainment Sector, Blue Lotus Research Institute

Stan Zhao

Analyst - Media&Entertainment Sector

<ul>
<li>The two new titles released in December, &lt;One Piece: Ambition&gt; and &lt;Where Winds Meet&gt;, from Tencent and NetEase, have shown promising early results and should become major blockbusters in 2025</li>
<li>For Tencent, the holiday updates for &lt;DnF Mobile&gt; and &lt;Arena Breakout&gt; have underperformed, leading us to revise our revenue expectations downward by approximately 10%.</li>
<li>Bilibili's key title, &lt;Three Kingdoms: MDTX&gt;, has seen a slight decline in popularity,  due to the intense competition in the SLG genre. The future seasonal updates could rejuvenate the performance.</li>
</ul>


The two new titles released in December, &lt;One Piece: Ambition&gt; and &lt;Where Winds Meet&gt;, from Tencent and NetEase, have shown promising early results and should become major blockbusters in 2025
For Tencent, the holiday updates for &lt;DnF Mobile&gt; and &lt;Arena Breakout&gt; have underperformed, leading us to revise our revenue expectations downward by approximately 10%.
Bilibili's key title, &lt;Three Kingdoms: MDTX&gt;, has seen a slight decline in popularity,  due to the intense competition in the SLG genre. The future seasonal updates could rejuvenate the performance.


China Online Game Grossing Monitor: December 16, 2024 - January‌ 4, 2025

Equity Bottom-Up

<ul>
<li>On December 16th, Kuaishou launched a subscription service for its micro drama channel, we believe it marks a key step towards improving monetization;</li>
<li>The penetration rate of heavy micro drama users on the platform has steadily increased, and leveraging their loyalty and monetization efficiency may improve with the subscription model.</li>
<li>The new model could better help mitigate the macroeconomic risks posed by advertising and the content quality risks of its long-tail partners.</li>
</ul>


On December 16th, Kuaishou launched a subscription service for its micro drama channel, we believe it marks a key step towards improving monetization;
The penetration rate of heavy micro drama users on the platform has steadily increased, and leveraging their loyalty and monetization efficiency may improve with the subscription model.
The new model could better help mitigate the macroeconomic risks posed by advertising and the content quality risks of its long-tail partners.


Monetization Upgrade Kickstarts Kuaishou's Microdrama Business

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)

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

[Blue Lotus Daily-TMT Update]:JD US/BABA US/PDD US/700 HK/BIDU US/3690 HK/NTES US/BILI US/E-Commerce

Government regulation forces cancellation of "refund without return" policy at JD,BABA,andPDD;Tencent reveals R&D progress at SPARK...

Blue Lotus Research Institute

[Blue Lotus Non-US Internet Weekly, 6/52]: Consumption Warmed Up During CNY Except Housing

Tencent and NetEase games shine during CNY, housing market falters post-holiday, Meituan sees boost in milk tea orders with social gifting feature.

Blue Lotus Research Institute

China Online Game Grossing Monitor: December 16, 2024 - January‌ 4, 2025

New titles from Tencent and NetEase show promise for 2025 blockbuster status, while Tencent's holiday updates disappoint and Bilibili faces...

Blue Lotus Research Institute

Monetization Upgrade Kickstarts Kuaishou's Microdrama Business

Kuaishou transitions from IAP to a subscription model for micro dramas to improve monetization efficiency and mitigate risks. We estimate it can...

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

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

[Blue Lotus Daily-TMT Update]:JD US/BABA US/PDD US/700 HK/BIDU US/3690 HK/NTES US/BILI US/E-Commerce

​Government regulation forces cancellation of "refund without return" policy at JD,BABA,andPDD;Tencent reveals R&D progress at SPARK...

Blue Lotus Research Institute

[Blue Lotus Non-US Internet Weekly, 6/52]: Consumption Warmed Up During CNY Except Housing

​Tencent and NetEase games shine during CNY, housing market falters post-holiday, Meituan sees boost in milk tea orders with social gifting feature.

Blue Lotus Research Institute

China Online Game Grossing Monitor: December 16, 2024 - January‌ 4, 2025

​New titles from Tencent and NetEase show promise for 2025 blockbuster status, while Tencent's holiday updates disappoint and Bilibili faces...

Blue Lotus Research Institute

Monetization Upgrade Kickstarts Kuaishou's Microdrama Business

​Kuaishou transitions from IAP to a subscription model for micro dramas to improve monetization efficiency and mitigate risks. We estimate it can...

Blue Lotus Research Institute

Government regulation forces cancellation of "refund without return" policy at JD,BABA,andPDD;Tencent reveals R&D progress at SPARK...

Tencent and NetEase games shine during CNY, housing market falters post-holiday, Meituan sees boost in milk tea orders with social gifting feature.

New titles from Tencent and NetEase show promise for 2025 blockbuster status, while Tencent's holiday updates disappoint and Bilibili faces...

Kuaishou transitions from IAP to a subscription model for micro dramas to improve monetization efficiency and mitigate risks. We estimate it can...