Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy 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

Equity Bottom-Up

<ul>
<li>Kanzhun, along with Kuaishou, Beike and PDD, are we call the “Macro Mauled Champions” (MMC). We suggest long term investors to accumulate;</li>
<li>Weak industrial sector earnings in October bodes ill for manufacturing hiring into C4Q24 and we think may further extend to early 2025 recruiting season;</li>
<li>We expect BZ to grow profit faster than revenues on cost savings, particularly on marketing and gain shares. We cut the TP from US$19 to US$17. </li>
</ul>


Kanzhun, along with Kuaishou, Beike and PDD, are we call the “Macro Mauled Champions” (MMC). We suggest long term investors to accumulate;
Weak industrial sector earnings in October bodes ill for manufacturing hiring into C4Q24 and we think may further extend to early 2025 recruiting season;
We expect BZ to grow profit faster than revenues on cost savings, particularly on marketing and gain shares. We cut the TP from US$19 to US$17. 


[Kanzhun Ltd. (BZ US, BUY, TP US$17) Target Price Change]: Mark Down C4Q24 and 2025 on Weak Demand

<ul>
<li>We expect BZ to report C3Q24 cash billing to decline 5% QoQ, 3.0% below consensus. We, however, expect non-GAAP net income to be 13% above consensus</li>
<li>September job creation worsened over July and August, which showed job market recovery is still nowhere in sight;</li>
<li>We keep rating and TP unchanged. Trading at 15x 2025 PE in 2025, we expect BZ to grow non-GAAP EBIT at a 3Yr CAGR of 24%.</li>
</ul>


We expect BZ to report C3Q24 cash billing to decline 5% QoQ, 3.0% below consensus. We, however, expect non-GAAP net income to be 13% above consensus
September job creation worsened over July and August, which showed job market recovery is still nowhere in sight;
We keep rating and TP unchanged. Trading at 15x 2025 PE in 2025, we expect BZ to grow non-GAAP EBIT at a 3Yr CAGR of 24%.


[Kanzhun Ltd. (BZ US, BUY, TP US$19) Earnings Preview]: Recovery Is Far Away but Execution Is Solid

<ul>
<li>Kanzhun Limited (BZ) reported C2Q24 revenue in-line with both our estimate and consensus, non-GAAP net income beat both our estimate and consensus by a slim margin. </li>
<li>Despite the soft macro-affected guidance as BZ continued gaining market share, the company is still guiding for nearly 20% YoY growth;</li>
<li>We keep TP unchanged at US$19/ADS and keep the BUY rating. BZ has a PEG of 0.5.</li>
</ul>


Kanzhun Limited (BZ) reported C2Q24 revenue in-line with both our estimate and consensus, non-GAAP net income beat both our estimate and consensus by a slim margin. 
Despite the soft macro-affected guidance as BZ continued gaining market share, the company is still guiding for nearly 20% YoY growth;
We keep TP unchanged at US$19/ADS and keep the BUY rating. BZ has a PEG of 0.5.


[Kanzhun Ltd. (BZ US, BUY, TP US$19) Earnings Review]: Focusing on Absolute Value…Maintain BUY

<ul>
<li>Due to weakening hiring demand from both manufacturing and service, we expect BZ’s cash billing to decline 5% QoQ in 2Q24, 9% below consensus. </li>
<li>We believe BZ’s user matrices still growing and leading. The weakness is mainly attributable to the employer/hiring side;</li>
<li>We cut TP by US$3 to US$19/ADS while keep the BUY rating.</li>
</ul>


Due to weakening hiring demand from both manufacturing and service, we expect BZ’s cash billing to decline 5% QoQ in 2Q24, 9% below consensus. 
We believe BZ’s user matrices still growing and leading. The weakness is mainly attributable to the employer/hiring side;
We cut TP by US$3 to US$19/ADS while keep the BUY rating.


[Kanzhun (BZ US, BUY, TP US$19) TP Change]: Impacted by Poor Macro but Still on Top of Competition

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, 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.

Event-Driven

<ul>
<li>PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.</li>
<li>The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.</li>
<li>In this note, we'll talk about the latest developments, possible outcomes and implications.</li>
</ul>


PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
In this note, we'll talk about the latest developments, possible outcomes and implications.


China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

China

Kanzhun Limited provides online recruitment services. The Company connects job seekers and enterprise users through its mobile application. Kanzhun offers a mobile-native product that promotes instant direct chats between enterprise users and job seekers.

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Kanzhun (BZ US)

[Kanzhun Ltd. (BZ US, BUY, TP US$17) Target Price Change]: Mark Down C4Q24 and 2025 on Weak Demand

Investors advised to accumulate Kanzhun, weak industrial sector earnings may impact manufacturing hiring into early 2025, BZ expected to grow...

Blue Lotus Research Institute

[Kanzhun Ltd. (BZ US, BUY, TP US$19) Earnings Preview]: Recovery Is Far Away but Execution Is Solid

BZ expected to report decline in cash billing but higher non-GAAP net income; job market recovery still elusive; rating and TP unchanged with...

Blue Lotus Research Institute

[Kanzhun Ltd. (BZ US, BUY, TP US$19) Earnings Review]: Focusing on Absolute Value…Maintain BUY

Kanzhun Limited (BZ) reports solid earnings, maintains growth despite macro challenges, analysts maintain BUY rating with unchanged price target.

Blue Lotus Research Institute

[Kanzhun (BZ US, BUY, TP US$19) TP Change]: Impacted by Poor Macro but Still on Top of Competition

Expecting a 5% YoY decline in cash billing for BZ in 2Q24 due to weakening hiring demand, but user matrices are still growing. TP lowered to US$19...

Blue Lotus Research Institute

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Kanzhun Ltd. (BZ US, BUY, TP US$17) Target Price Change]: Mark Down C4Q24 and 2025 on Weak Demand

​Investors advised to accumulate Kanzhun, weak industrial sector earnings may impact manufacturing hiring into early 2025, BZ expected to grow...

Blue Lotus Research Institute

[Kanzhun Ltd. (BZ US, BUY, TP US$19) Earnings Preview]: Recovery Is Far Away but Execution Is Solid

​BZ expected to report decline in cash billing but higher non-GAAP net income; job market recovery still elusive; rating and TP unchanged with...

Blue Lotus Research Institute

[Kanzhun Ltd. (BZ US, BUY, TP US$19) Earnings Review]: Focusing on Absolute Value…Maintain BUY

​Kanzhun Limited (BZ) reports solid earnings, maintains growth despite macro challenges, analysts maintain BUY rating with unchanged price target.

Blue Lotus Research Institute

[Kanzhun (BZ US, BUY, TP US$19) TP Change]: Impacted by Poor Macro but Still on Top of Competition

​Expecting a 5% YoY decline in cash billing for BZ in 2Q24 due to weakening hiring demand, but user matrices are still growing. TP lowered to US$19...

Blue Lotus Research Institute

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

Investors advised to accumulate Kanzhun, weak industrial sector earnings may impact manufacturing hiring into early 2025, BZ expected to grow...

BZ expected to report decline in cash billing but higher non-GAAP net income; job market recovery still elusive; rating and TP unchanged with...

Kanzhun Limited (BZ) reports solid earnings, maintains growth despite macro challenges, analysts maintain BUY rating with unchanged price target.

Expecting a 5% YoY decline in cash billing for BZ in 2Q24 due to weakening hiring demand, but user matrices are still growing. TP lowered to US$19...