Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

<ul>
<li>The conglomerate sector continues to show momentum in Hong Kong while the materials and energy sectors lag</li>
<li>
<a href="https://www.smartkarma.com/entities/weibo-corp" target="_blank" data-smartkarma-citation="entities:35280:1" rel="noopener">Weibo (9898 HK)</a><a href="https://www.smartkarma.com/entities/weibo-corp-adr" target="_blank" data-smartkarma-citation="entities:3826:1" rel="noopener">Weibo Corp (WB US)</a> was rated a BUY as valuations and potential catalysts from parent <a href="https://www.smartkarma.com/entities/alibaba-group-holding-ltd-d7b798e2-202d-4e01-9a1e-799e2ae8f0c7" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group Holding (9988 HK)</a> could support a higher stock price.
</li>
<li>
<a href="https://www.smartkarma.com/entities/china-east-education-holdings" target="_blank" data-smartkarma-citation="entities:27843:1" rel="noopener">China East Education (667 HK)</a> was upgraded to BUY with higher higher price target due to profit increase. <a href="https://www.smartkarma.com/entities/dongfang-electric-corporation-limited" target="_blank" data-smartkarma-citation="entities:1251:1" rel="noopener">Dongfang Electric (1072 HK)</a> was initiated with a BUY with strong upside.
</li>
</ul>


The conglomerate sector continues to show momentum in Hong Kong while the materials and energy sectors lag

Weibo (9898 HK)Weibo Corp (WB US) was rated a BUY as valuations and potential catalysts from parent Alibaba Group Holding (9988 HK) could support a higher stock price.


China East Education (667 HK) was upgraded to BUY with higher higher price target due to profit increase. Dongfang Electric (1072 HK) was initiated with a BUY with strong upside.



BUY/SELL/HOLD: Hong Kong Stock Updates (September 21)

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC 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

Kuaishou Technology / Equity Capital Markets

<ul>
<li>DCM Investments is looking to raise US$484m via selling its remaining stake in <a href="https://www.smartkarma.com/entities/kuaishou-technology" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a>.</li>
<li>While the current block deal isn’t entirely well flagged per se, it appears that DCM has since been trimming its stake on the open market.</li>
<li>In this note, we run the deal through our ECM framework and comment on deal dynamics.</li>
</ul>


DCM Investments is looking to raise US$484m via selling its remaining stake in Kuaishou Technology (1024 HK).
While the current block deal isn’t entirely well flagged per se, it appears that DCM has since been trimming its stake on the open market.
In this note, we run the deal through our ECM framework and comment on deal dynamics.


Kuaishou Placement - US$480m Secondary Block Deal a Small One to Digest

Analyst - Media&Entertainment Sector, Blue Lotus Research Institute

Stan Zhao

Analyst - Media&Entertainment Sector

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>Tencent's &lt;Honor of Kings&gt; has seen significant grossing growth following gameplay features' expansion and global servers' launch.</li>
<li>Additionally, &lt;Teamfight Tactics Mobile&gt; saw a surge in grossing rankings after its anniversary event and has since maintained a stable position.</li>
<li>&lt;Justice Mobile&gt; has stabilized following its anniversary update, while &lt;Naraka Mobile&gt; experienced a noticeable drop in revenue rankings. Future updates will be monitored to assess the game's performance moving forward.</li>
</ul>


Tencent's &lt;Honor of Kings&gt; has seen significant grossing growth following gameplay features' expansion and global servers' launch.
Additionally, &lt;Teamfight Tactics Mobile&gt; saw a surge in grossing rankings after its anniversary event and has since maintained a stable position.
&lt;Justice Mobile&gt; has stabilized following its anniversary update, while &lt;Naraka Mobile&gt; experienced a noticeable drop in revenue rankings. Future updates will be monitored to assess the game's performance moving forward.


Online Game Monitor: August 13 - September 8, 2024

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

<ul>
<li>Bilibili (BILI) reported C2Q24 revenue, GAAP operating profit, and GAAP net income in-line, 7.9%, 9.9% vs. our estimates and in-line, 12%, 18% vs. consensus. </li>
<li>BILI’s unique, urban user base and video format give it strong competitive advantage. Further, revenue from &lt;Three Kingdom&gt; game will be significant.</li>
<li>We raise our TP to US$20 and reiterate BUY .  </li>
</ul>


Bilibili (BILI) reported C2Q24 revenue, GAAP operating profit, and GAAP net income in-line, 7.9%, 9.9% vs. our estimates and in-line, 12%, 18% vs. consensus. 
BILI’s unique, urban user base and video format give it strong competitive advantage. Further, revenue from &lt;Three Kingdom&gt; game will be significant.
We raise our TP to US$20 and reiterate BUY .  


[Bilibili (BILI US, BUY, TP US$20) TP Change]: User Demographics&AI Drive China’s Video Instagram

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 announced 2Q24 financial results: total revenue grew by 16% YoY to RMB6.13bn, in line with our/consensus estimate; adjusted net loss narrowed by 72% YoY to RMB271mn, better than our/consensus estimate of RMB329/317mn, primarily due to the better-than-expected GPM expansion (+6.8ppt YoY).</li><li>For 3Q24E, we expect total revenue will increase by 22% YoY, and Bili will achieve breakeven and register non-GAAP operating income of RMB184mn, mainly supported by the robust performance of high-margin mobile games and advertising businesses.</li><li>We cut our FY24 adjusted net loss estimate to RMB255mn (previous: RMB710mn) mainly to factor in the better-thanexpected earnings contribution from games and ads business.</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 announced 2Q24 financial results: total revenue grew by 16% YoY to RMB6.13bn, in line with our/consensus estimate; adjusted net loss narrowed by 72% YoY to RMB271mn, better than our/consensus estimate of RMB329/317mn, primarily due to the better-than-expected GPM expansion (+6.8ppt YoY).For 3Q24E, we expect total revenue will increase by 22% YoY, and Bili will achieve breakeven and register non-GAAP operating income of RMB184mn, mainly supported by the robust performance of high-margin mobile games and advertising businesses.We cut our FY24 adjusted net loss estimate to RMB255mn (previous: RMB710mn) mainly to factor in the better-thanexpected earnings contribution from games and ads business.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 games and ads businesses to pave way for breakeven in 3Q24E

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 (September 21)

Conglomerate stocks in Hong Kong have outperformed this month. Weibo target price is upgraded and Dongfang Electric is intiated BUY. CEE saw a...

David Mudd

Kuaishou Placement - US$480m Secondary Block Deal a Small One to Digest

DCM Investments is looking to raise US$484m via selling its remaining stake in Kuaishou Technology (1024 HK). In this note, we run the deal through...

Clarence Chu

Online Game Monitor: August 13 - September 8, 2024

Tencent's mobile games, like <hok> have seen growth in grossing rankings while NetEase's <naraka mobile> is facing a decline.</naraka></hok>

Blue Lotus Research Institute

[Bilibili (BILI US, BUY, TP US$20) TP Change]: User Demographics&AI Drive China’s Video Instagram

Bilibili's strong performance in Q2 and unique user base position it for continued success, with revenue from game expected to drive growth....

Blue Lotus Research Institute

Bilibili (BILI US) - Strong games and ads businesses to pave way for breakeven in 3Q24E

BiliBili announced 2Q24 financial results: total revenue grew by 16% YoY to RMB6.13bn, in line with our/consensus estimate; adjusted net loss...

CMB International

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52-week Range

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BUY/SELL/HOLD: Hong Kong Stock Updates (September 21)

Conglomerate stocks in Hong Kong have outperformed this month. Weibo target price is upgraded and Dongfang Electric is intiated BUY. CEE saw a...

David Mudd

Kuaishou Placement - US$480m Secondary Block Deal a Small One to Digest

DCM Investments is looking to raise US$484m via selling its remaining stake in Kuaishou Technology (1024 HK). In this note, we run the deal through...

Clarence Chu

Online Game Monitor: August 13 - September 8, 2024

​Tencent's mobile games, like <hok> have seen growth in grossing rankings while NetEase's <naraka mobile> is facing a decline.</naraka></hok>

Blue Lotus Research Institute

[Bilibili (BILI US, BUY, TP US$20) TP Change]: User Demographics&AI Drive China’s Video Instagram

​Bilibili's strong performance in Q2 and unique user base position it for continued success, with revenue from game expected to drive growth....

Blue Lotus Research Institute

Bilibili (BILI US) - Strong games and ads businesses to pave way for breakeven in 3Q24E

BiliBili announced 2Q24 financial results: total revenue grew by 16% YoY to RMB6.13bn, in line with our/consensus estimate; adjusted net loss...

CMB International

Tencent's mobile games, like <hok> have seen growth in grossing rankings while NetEase's <naraka mobile> is facing a decline.</naraka></hok>

Bilibili's strong performance in Q2 and unique user base position it for continued success, with revenue from game expected to drive growth....