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>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

Equity Bottom-Up

<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

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.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/iqiyi-inc" target="_blank" data-smartkarma-citation="entities:26755:1" rel="noopener">IQIYI Inc (IQ US)</a> 's share price is up 30.8% YTD primarily driven by upbeat 4Q2022 results. The main highlight was strong increase in members alongside improvement in OPM.</li>
<li>The company’s aggressive cost cutting measures have helped reach operating profits, however, we don’t think this is sustainable given user growth depends on content.</li>
<li>We expect iQiyi’s 1Q2023E results to be strong driven by the launch of The Knockout series, however, further cutting down costs will impact the company's long-term prospects.</li>
</ul>



IQIYI Inc (IQ US) 's share price is up 30.8% YTD primarily driven by upbeat 4Q2022 results. The main highlight was strong increase in members alongside improvement in OPM.
The company’s aggressive cost cutting measures have helped reach operating profits, however, we don’t think this is sustainable given user growth depends on content.
We expect iQiyi’s 1Q2023E results to be strong driven by the launch of The Knockout series, however, further cutting down costs will impact the company's long-term prospects.


<ul>
<li>IQIYI’s 4Q22 top line was in line with cons., while non-GAAP net income beat cons by 176%, due to reduction of content cost to a historical low. </li>
<li>We raise its 2023 revenue forecasts due to macro recovery, but expect its content cost to rebound to cope with market competition.</li>
<li>Due to long-standing industry challenges, we maintain SELL but raise TP to reflect macro rebound. Our TP is US$ 5.40, which implies 18.4X PE in 2023.</li>
</ul>


IQIYI’s 4Q22 top line was in line with cons., while non-GAAP net income beat cons by 176%, due to reduction of content cost to a historical low. 
We raise its 2023 revenue forecasts due to macro recovery, but expect its content cost to rebound to cope with market competition.
Due to long-standing industry challenges, we maintain SELL but raise TP to reflect macro rebound. Our TP is US$ 5.40, which implies 18.4X PE in 2023.


[iQIYI, Lnc. (IQ US,) Target Price Change]: Short-Term Catalysts Not to Solve Long-Term Challenges

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)

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

IQiyi: Upbeat 4Q Is Only Temporary

iQiyi's aggressive cost control measures helped improve profitability. However, we think those have reached its limit as further controls will...

Shifara Samsudeen, ACMA, CGMA

[iQIYI, Lnc. (IQ US,) Target Price Change]: Short-Term Catalysts Not to Solve Long-Term Challenges

We raise its 2023 revenue forecasts due to macro recovery, but expect its content cost to rebound to cope with market competition. Maintain SELL...

Blue Lotus Research Institute

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