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>KE Holding: China State Media call for loosening on purchase restrictions in 1st tier cities (+)</li>
<li>NIO: NIO to launch ET5 Touring on June 15（ +）</li>
<li>JD/ BABA/ PDD: Douyin launches self-operated (1P) ecommerce store (-)</li>
</ul>


KE Holding: China State Media call for loosening on purchase restrictions in 1st tier cities (+)
NIO: NIO to launch ET5 Touring on June 15（ +）
JD/ BABA/ PDD: Douyin launches self-operated (1P) ecommerce store (-)


China TMT Update: Ke/Nio/JD/BABA/PDD-Douyin Launches Self-Operated (1P) Store; Nio's ET5;

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.

Equity Bottom-Up

<ul><li>BEKE’s share price surged 13/12% on ADR/H-share market in the last two trading days mainly driven by news from BBG which stated that government is preparing a new basket of measures to support property market and Tsingdao to ease the home purchase limit.</li><li>We do NOT find the document on any official sites but based on historical experience and our channel check, we listed 4 possibilities and its implications to the industry in which the base case is assuming most 2nd-tier cities would follow what Tsingdao imposed and will largely stabilize the market sentiment and property sales.</li><li>It implies a 10/20% GTV growth in new home/existing home market in 2023E for BEKE. </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.

BEKE’s share price surged 13/12% on ADR/H-share market in the last two trading days mainly driven by news from BBG which stated that government is preparing a new basket of measures to support property market and Tsingdao to ease the home purchase limit.We do NOT find the document on any official sites but based on historical experience and our channel check, we listed 4 possibilities and its implications to the industry in which the base case is assuming most 2nd-tier cities would follow what Tsingdao imposed and will largely stabilize the market sentiment and property sales.It implies a 10/20% GTV growth in new home/existing home market in 2023E for BEKE. 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.

Ke Holdings (BEKE US) – New policy? What’s good for BEKE?

<ul>
<li>LI/NIO/XPEV: Li Auto, NIO and Xpeng announced May vehicle delivery results (+/-/)</li>
<li>XPEV: Xpeng to begin presale for G6 on June 9 (+)</li>
<li>KE Holding: Monthly housing transactions remain resilient in May (+)</li>
</ul>


LI/NIO/XPEV: Li Auto, NIO and Xpeng announced May vehicle delivery results (+/-/)
XPEV: Xpeng to begin presale for G6 on June 9 (+)
KE Holding: Monthly housing transactions remain resilient in May (+)


China TMT Update June 3 - KE/LI/NIO/XPEV: Xpeng to Begin Presale for G6 on June 9(+)

<ul>
<li>BEKE (Beike) reported 1Q23 revenue 10.4%/12.2% vs our est./cons. non-GAAP net income 65.6%/60.9% higher than our est./cons.</li>
<li>Although Beike has stated no intention to lower existing home (EH) commission rate, we still expect EH commission rate to slightly trend down in 2023. </li>
<li>We maintain BUY rating and raise the TP by US$1 to US$22 to reflect 1) steady recovery of property sales in China; 2) better outlook on profitability.</li>
</ul>


BEKE (Beike) reported 1Q23 revenue 10.4%/12.2% vs our est./cons. non-GAAP net income 65.6%/60.9% higher than our est./cons.
Although Beike has stated no intention to lower existing home (EH) commission rate, we still expect EH commission rate to slightly trend down in 2023. 
We maintain BUY rating and raise the TP by US$1 to US$22 to reflect 1) steady recovery of property sales in China; 2) better outlook on profitability.


[KE Holdings (BEKE US) Target Price Change]: Operating Leverage Starts to Kick In, Maintain BUY

<ul><li>BEKE’s reported strong 1Q23 results with adjusted NP doubled from last quarter to reach RMB 3.56bn, strongly beating market expectations.</li><li>Moreover, the Company guided another strong quarter with GTV for ETH/new home to grow &gt;20%/30% YoY.</li><li>Due to improving GTV growth outlook and narrower than expected losses from new business, we raise our forecasts and expect the adjusted NP to reach RMB 7.4/8.5bn in 2023/24E, 17%/6% higher than the consensus. </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.

BEKE’s reported strong 1Q23 results with adjusted NP doubled from last quarter to reach RMB 3.56bn, strongly beating market expectations.Moreover, the Company guided another strong quarter with GTV for ETH/new home to grow &gt;20%/30% YoY.Due to improving GTV growth outlook and narrower than expected losses from new business, we raise our forecasts and expect the adjusted NP to reach RMB 7.4/8.5bn in 2023/24E, 17%/6% higher than the consensus. 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.

Ke Holdings (BEKE US) – Strong 2Q Guidance Points to a Robust 1H23

China

KE Holdings Inc. operates as an integrated online and offline platform for housing transactions and services. The Company offers existing and new home sales, home rentals, home renovation, real estate financial solutions, and other services. KE Holdings conducts businesses in China.

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KE Holdings (BEKE US)

China TMT Update: Ke/Nio/JD/BABA/PDD-Douyin Launches Self-Operated (1P) Store; Nio's ET5;

KE Holding: China State Media call for loosening on purchase restrictions (+)；NIO: NIO to launch ET5 Touring on June 15（+）；JD/ BABA/ PDD: Douyin...

Blue Lotus Research Institute