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 forecast iQIYI 1Q23 top line/bottom line to miss cons. by (3.6%)/(6.3%), largely due to the rebound of content costs to cope with competition pressure. </li>
<li>We raise our full year ads revenue estimate slightly to reflect the better-than-expected macro recovery. Our top and bottom lines in 2023 are (3.3%)/(7.0%) vs cons, due to long-term competition. </li>
<li>Maintain SELL but slightly raise TP to US$ 5.60, implying 18.4X PE in 2023.</li>
</ul>


We forecast iQIYI 1Q23 top line/bottom line to miss cons. by (3.6%)/(6.3%), largely due to the rebound of content costs to cope with competition pressure. 
We raise our full year ads revenue estimate slightly to reflect the better-than-expected macro recovery. Our top and bottom lines in 2023 are (3.3%)/(7.0%) vs cons, due to long-term competition. 
Maintain SELL but slightly raise TP to US$ 5.60, implying 18.4X PE in 2023.


[iQIYI, Lnc. (IQ US) Target Price Change]: Reiterate SELL for Increasing Competition

Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Private Capital Markets

<ul>
<li>Founded in 2017 in Beijing, <a href="https://www.smartkarma.com/entities/hangzhou-tai-ruo-technology-co-ltd-nreal-ai" target="_blank" data-smartkarma-citation="entities:36880:1" rel="noopener">Nreal.ai (1690070D CH)</a> is an Augmented Reality (AR)/ mixed reality (MR) technology company that develops and sells AR glasses.</li>
<li>The company's glasses have received wide recognition as they are designed to be lightweight, comfortable and affordable, making them more accessible to consumers.</li>
<li>The company has raised more than USD240m in funding and as per the company, we could expect an IPO over the next 18-24 months.  </li>
</ul>


Founded in 2017 in Beijing, Nreal.ai (1690070D CH) is an Augmented Reality (AR)/ mixed reality (MR) technology company that develops and sells AR glasses.
The company's glasses have received wide recognition as they are designed to be lightweight, comfortable and affordable, making them more accessible to consumers.
The company has raised more than USD240m in funding and as per the company, we could expect an IPO over the next 18-24 months.  


Nreal: AR/MR Technology Player Recognised for Affordable Glasses

Thematic (Sector/Industry)

<ul>
<li>700.HK/ IQ： Tencent Video and Douyin reach strategic cooperation （+/-）</li>
<li>NIO: NIO to allow consumers to lock in EC7 orders starting Apr 10 （+）</li>
<li>ZLAB/1801HK: ZaiLab started FGFR2 mAb Phase III trial for Gastric Cancer in China (+)</li>
</ul>


700.HK/ IQ： Tencent Video and Douyin reach strategic cooperation （+/-）
NIO: NIO to allow consumers to lock in EC7 orders starting Apr 10 （+）
ZLAB/1801HK: ZaiLab started FGFR2 mAb Phase III trial for Gastric Cancer in China (+)


China TMT Update(Apr.10): 700.HK/IQ/NIO/ZLAB/1801HK - Tencent Video and Douyin Reach Cooperation

<ul>
<li>700HK/NTES/BILI/IQ/3659.JP: The latest Foreign game codes released by NPPA, positive to gaming companies(+)</li>
<li>BGNE/9995HK：Daiichi and Zymeworks end antibody pact after seven years (-)</li>
<li>ZLAB：ZaiLab's partner Karua's Schizophrenia drug obtained positive Phase 3 data (+)</li>
</ul>


700HK/NTES/BILI/IQ/3659.JP: The latest Foreign game codes released by NPPA, positive to gaming companies(+)
BGNE/9995HK：Daiichi and Zymeworks end antibody pact after seven years (-)
ZLAB：ZaiLab's partner Karua's Schizophrenia drug obtained positive Phase 3 data (+)


China TMT Update(Mar.22): 700HK/NTES/BILI/IQ/3659.JP /BGNE/9995HK/ZLAB - Foreign Game Codes(+)

Greater China Equity Long/Short Analyst

Eric Chen

<ul>
<li>BILI's 4Q results missed expectations across key metrics from revenue and MAU growth to guidance for 2023</li>
<li>The results suggest fast growth will not return in 2023 and an uncertain road to breakeven by 2024.</li>
<li>Reiterate our bearish view on the stock and see further downside risks ahead.</li>
</ul>


BILI's 4Q results missed expectations across key metrics from revenue and MAU growth to guidance for 2023
The results suggest fast growth will not return in 2023 and an uncertain road to breakeven by 2024.
Reiterate our bearish view on the stock and see further downside risks ahead.


Bilibili (Bili Us): Further Downside Risks Ahead

China

iQIYI, Inc. offers video entertainment services. The Company provides movies, television dramas, variety shows, and other video contents. iQIYI offers services worldwide.

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iQIYI Inc (IQ US)

[iQIYI, Lnc. (IQ US) Target Price Change]: Reiterate SELL for Increasing Competition

We forecast iQIYI 1Q23 top line/bottom line to miss cons. by (3.6%)/(6.3%), largely due to the rebound of content costs to cope with competition...

Blue Lotus Research Institute

Nreal: AR/MR Technology Player Recognised for Affordable Glasses

Nreal is an AR/ mixed reality (MR) tech company that develops and sells AR glasses. Nreal’s more-affordable, lightweight AR glasses are more...

Shifara Samsudeen, ACMA, CGMA

China TMT Update(Apr.10): 700.HK/IQ/NIO/ZLAB/1801HK - Tencent Video and Douyin Reach Cooperation

Tencent Video and Douyin reach strategic cooperation ； NIO to allow onsumers to lock in EC7 orders starting Apr 10 ；ZaiLab started FGFR2 mAb Phase...

Blue Lotus Research Institute

China TMT Update(Mar.22): 700HK/NTES/BILI/IQ/3659.JP /BGNE/9995HK/ZLAB - Foreign Game Codes(+)

700HK/NTES/BILI/IQ/3659.JP: The latest Foreign game codes; BGNE/9995HK：Daiichi and Zymeworks end antibody pact (-) ; ZLAB：ZaiLab's partner Karua's...

Blue Lotus Research Institute

Bilibili (Bili Us): Further Downside Risks Ahead

Disappointing 4Q results highlights the outlook of low growth and limited room for margin improvement. We see further downside risks ahead.

Eric Chen

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