Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

Tencent Music Entertainment Group / Equity Bottom-Up

<ul>
<li>Hong Kong market sectors outperforming since the stimulus in September are Consumer Discretionary and Healthcare as Utilities, Telecom and Energy lag.</li>
<li>
<a href="https://www.smartkarma.com/entities/crrc-corp-ltd-461535b2-37ac-4589-b4d9-8b71c06c43b8" target="_blank" data-smartkarma-citation="entities:124:1" rel="noopener">CRRC Corp Ltd H (1766 HK)</a> gets BUY recommendations as its results point to continued strength in the rail equipment sector with passenger volume surging.
</li>
<li>
<a href="https://www.smartkarma.com/entities/tencent-music-entertainment-group" target="_blank" data-smartkarma-citation="entities:36601:1" rel="noopener">Tencent Music Entertainment Group (1698 HK)</a> reported solid results as it shifts to a pay-to-stream subscription model. <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a> had a blowout quarter with EV sales surging.
</li>
</ul>


Hong Kong market sectors outperforming since the stimulus in September are Consumer Discretionary and Healthcare as Utilities, Telecom and Energy lag.

CRRC Corp Ltd H (1766 HK) gets BUY recommendations as its results point to continued strength in the rail equipment sector with passenger volume surging.


Tencent Music Entertainment Group (1698 HK) reported solid results as it shifts to a pay-to-stream subscription model. Xiaomi Corp (1810 HK) had a blowout quarter with EV sales surging.



BUY/SELL/HOLD: Hong Kong Stock Updates (NOVEMBER 18)

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

<ul>
<li>Bilibili (BILI) reported C3Q24 revenue and GAAP net income 2.1%, 18% vs. our estimates and 2.5%, 24% vs. consensus. </li>
<li>We believe the market oversold on BILI because its traffic was rebounding in accelerating fashion, which shall benefit from a consumption recovery now visible into C1Q25. </li>
<li>We maintained our BUY rating and raised our TP to US$22. BILI is our mid-cap TOP PICK.</li>
</ul>


Bilibili (BILI) reported C3Q24 revenue and GAAP net income 2.1%, 18% vs. our estimates and 2.5%, 24% vs. consensus. 
We believe the market oversold on BILI because its traffic was rebounding in accelerating fashion, which shall benefit from a consumption recovery now visible into C1Q25. 
We maintained our BUY rating and raised our TP to US$22. BILI is our mid-cap TOP PICK.


[Bilibili (BILI US, BUY, TP US$22) TP Change]: C3Q24 Review: Traffic Growth Bodes Well for Future

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>BiliBili reported 3Q24 results: total revenue was up by 26% YoY to RMB7.31bn, 3/2% ahead of our/Bloomberg consensus estimate; the company achieved quarterly breakeven and recorded an adjusted net income of RMB236mn (vs. adjusted net loss of RMB878mn in 3Q23), ahead of our/consensus estimate of RMB195/217mn.</li><li>The solid 3Q24 print is mainly due to the strong performance of new game title SanMou and the effective cost optimization initiatives. Looking ahead to 4Q24E, we forecast total revenue to grow by 21% YoY, with adjusted net margin further expanding to 5.3% (3Q24: 3.2%).</li><li>We lift FY24-26E total revenue forecast by 1-5% in view of the robust game performance. </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.

BiliBili reported 3Q24 results: total revenue was up by 26% YoY to RMB7.31bn, 3/2% ahead of our/Bloomberg consensus estimate; the company achieved quarterly breakeven and recorded an adjusted net income of RMB236mn (vs. adjusted net loss of RMB878mn in 3Q23), ahead of our/consensus estimate of RMB195/217mn.The solid 3Q24 print is mainly due to the strong performance of new game title SanMou and the effective cost optimization initiatives. Looking ahead to 4Q24E, we forecast total revenue to grow by 21% YoY, with adjusted net margin further expanding to 5.3% (3Q24: 3.2%).We lift FY24-26E total revenue forecast by 1-5% in view of the robust game performance. 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.

Bilibili (BILI US) - Strong Mobile Games and Ad Businesses Support Solid 3Q24 Results

Thematic (Sector/Industry)

<ul>
<li>JD US/3690 HK:JD.com to Launch Self-operated On-Demand Delivery Service. (+/-)</li>
<li>JD US/BABA US/1810 HK:Shanghai expands the products eligible for home appliance subsidies (+/+/+)</li>
<li>BABA US / 700 HK: Alipay suffers brief outage. (-/+)</li>
</ul>


JD US/3690 HK:JD.com to Launch Self-operated On-Demand Delivery Service. (+/-)
JD US/BABA US/1810 HK:Shanghai expands the products eligible for home appliance subsidies (+/+/+)
BABA US / 700 HK: Alipay suffers brief outage. (-/+)


[Blue Lotus Daily-TMT Update]:JD/3690 HK/BABA/1810 HK/700 HK/BILI/1024 HK/BIDU/20 HK/NTES/SE/GRAB

Analyst - Media&Entertainment Sector, Blue Lotus Research Institute

Stan Zhao

Analyst - Media&Entertainment Sector

<ul>
<li>Tencent’s &lt;Peacekeeper&gt; saw a strong player return and robust revenue performance due to introducing new gameplay modes, with projected gross billings for 2024 expected to exceed RMB 20 billion.</li>
<li>&lt;DnF Mobile&gt; continues to perform well, maintaining high popularity, leading to an upward revision of its annual revenue forecast.</li>
<li>New games &lt;Civilization Mobile&gt; and &lt;Need for Speed Mobile&gt; experienced a sharp decline in popularity, and with a late release, their contribution to 2024 revenue is expected to be limited.</li>
</ul>


Tencent’s &lt;Peacekeeper&gt; saw a strong player return and robust revenue performance due to introducing new gameplay modes, with projected gross billings for 2024 expected to exceed RMB 20 billion.
&lt;DnF Mobile&gt; continues to perform well, maintaining high popularity, leading to an upward revision of its annual revenue forecast.
New games &lt;Civilization Mobile&gt; and &lt;Need for Speed Mobile&gt; experienced a sharp decline in popularity, and with a late release, their contribution to 2024 revenue is expected to be limited.


China Online Game Grossing Monitor: September 23 - October 10, 2024

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)

BUY/SELL/HOLD: Hong Kong Stock Updates (NOVEMBER 18)

Hong Kong has seen its Consumer Discretionary and Healthcare sectors perform well since the stimulus in September. CRCC has had several buy...

David Mudd

[Bilibili (BILI US, BUY, TP US$22) TP Change]: C3Q24 Review: Traffic Growth Bodes Well for Future

Bilibili (BILI) exceeds revenue and net income estimates, market oversold, BUY rating maintained with raised target price to US$22.

Blue Lotus Research Institute

Bilibili (BILI US) - Strong Mobile Games and Ad Businesses Support Solid 3Q24 Results

We roll over our valuation period to FY25E and fine-tune our SOTP-derived target price to US$22.0 (previous: US$20.50). Maintain BUY

CMB International

[Blue Lotus Daily-TMT Update]:JD/3690 HK/BABA/1810 HK/700 HK/BILI/1024 HK/BIDU/20 HK/NTES/SE/GRAB

JD.com is launching a self-operated on-demand delivery service, Shanghai expands home appliance subsidies, and Alipay experiences a brief outage.

Blue Lotus Research Institute

China Online Game Grossing Monitor: September 23 - October 10, 2024

Tencent's flagship titles thrive with new gameplay modes, while NetEase's new game struggles with declining popularity and late releases impacting...

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

BUY/SELL/HOLD: Hong Kong Stock Updates (NOVEMBER 18)

Hong Kong has seen its Consumer Discretionary and Healthcare sectors perform well since the stimulus in September. CRCC has had several buy...

David Mudd

[Bilibili (BILI US, BUY, TP US$22) TP Change]: C3Q24 Review: Traffic Growth Bodes Well for Future

​Bilibili (BILI) exceeds revenue and net income estimates, market oversold, BUY rating maintained with raised target price to US$22.

Blue Lotus Research Institute

Bilibili (BILI US) - Strong Mobile Games and Ad Businesses Support Solid 3Q24 Results

We roll over our valuation period to FY25E and fine-tune our SOTP-derived target price to US$22.0 (previous: US$20.50). Maintain BUY

CMB International

[Blue Lotus Daily-TMT Update]:JD/3690 HK/BABA/1810 HK/700 HK/BILI/1024 HK/BIDU/20 HK/NTES/SE/GRAB

​JD.com is launching a self-operated on-demand delivery service, Shanghai expands home appliance subsidies, and Alipay experiences a brief outage.

Blue Lotus Research Institute

China Online Game Grossing Monitor: September 23 - October 10, 2024

​Tencent's flagship titles thrive with new gameplay modes, while NetEase's new game struggles with declining popularity and late releases impacting...

Blue Lotus Research Institute

Bilibili (BILI) exceeds revenue and net income estimates, market oversold, BUY rating maintained with raised target price to US$22.

JD.com is launching a self-operated on-demand delivery service, Shanghai expands home appliance subsidies, and Alipay experiences a brief outage.

Tencent's flagship titles thrive with new gameplay modes, while NetEase's new game struggles with declining popularity and late releases impacting...