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.

Thematic (Sector/Industry)

<ul><li>Revenue of China’s online game market decreased by 23% YoY to RMB21.6bn in Feb 2023 per CNG, as new games were yet to make meaningful revenue contribution, and 2022 Chinese New Year (CNY) holiday fell in February whilst it took place in January in 2023, which led to a tougher comp.</li><li>Smoothing out CNY impact, 2M23 online games market revenue was down 20% YoY.</li><li>As game license approval resumed, many highly anticipated game titles are lined up for launch and will lead industry recovery from 2Q23 onwards, in our view. </li></ul><p><em>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.</em></p>

Revenue of China’s online game market decreased by 23% YoY to RMB21.6bn in Feb 2023 per CNG, as new games were yet to make meaningful revenue contribution, and 2022 Chinese New Year (CNY) holiday fell in February whilst it took place in January in 2023, which led to a tougher comp.Smoothing out CNY impact, 2M23 online games market revenue was down 20% YoY.As game license approval resumed, many highly anticipated game titles are lined up for launch and will lead industry recovery from 2Q23 onwards, in our view. 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.

China Internet – February online game market recap

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

<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(+)

Equity Bottom-Up

<ul>
<li>We suggest that the recent strong performance of &lt;Eggy Party&gt; could be sustainable because of the absence of competitive games...</li>
<li>...an emerging user-generated-content (UGC) ecosystem with much potential, social connections among players, and popularity on social media. </li>
<li>We maintain our previous estimation that &lt;Eggy Party&gt; could at least contribute RMB 4-5 bn this year. NetEase is one of our top picks in China internet.</li>
</ul>


We suggest that the recent strong performance of &lt;Eggy Party&gt; could be sustainable because of the absence of competitive games...
...an emerging user-generated-content (UGC) ecosystem with much potential, social connections among players, and popularity on social media. 
We maintain our previous estimation that &lt;Eggy Party&gt; could at least contribute RMB 4-5 bn this year. NetEase is one of our top picks in China internet.


[NetEase (NTES US) Company Update]: Eggy Party Could Have Long Life Cycle

<ul>
<li>1024HK：China's consumer rights gala exposes problems of livestreaming industry, Kuaishou receives a warning（-）</li>
<li>BIDU：Baidu ERNIE bot press conference is held， there result is not promising（-）</li>
<li>Gaming Industry: Game-related proposals during Two Sessions indicate positive attitude for gaming industry (+)</li>
</ul>


1024HK：China's consumer rights gala exposes problems of livestreaming industry, Kuaishou receives a warning（-）
BIDU：Baidu ERNIE bot press conference is held， there result is not promising（-）
Gaming Industry: Game-related proposals during Two Sessions indicate positive attitude for gaming industry (+)


China TMT Update (Mar.17): 1024.HK/BIDU/700.HK/NTES：Baidu ERNIE Bot Press Conference Is Held

<ul>
<li>We recently conducted a round of interviews of Chinese start-up gaming companies, and we see an overall loosening in the regulatory environment, although near-term hit titles are still absent.</li>
<li>We are positive on Tencent because of the increasing possibility of DNF mobile launch. We raise NetEase’s TP to US$ 99, and it’s one of our top picks now</li>
<li>Other gaming companies that have upward trends include Kingsoft, Lingxi Games (under Alibaba), Koei Tecmo, Nexon, and Mihoyo. Companies with a downward trend include BILI and Garena (under SEA).  </li>
</ul>


We recently conducted a round of interviews of Chinese start-up gaming companies, and we see an overall loosening in the regulatory environment, although near-term hit titles are still absent.
We are positive on Tencent because of the increasing possibility of DNF mobile launch. We raise NetEase’s TP to US$ 99, and it’s one of our top picks now
Other gaming companies that have upward trends include Kingsoft, Lingxi Games (under Alibaba), Koei Tecmo, Nexon, and Mihoyo. Companies with a downward trend include BILI and Garena (under SEA).  


[Gaming Sector Update]: Top Picks Are Tencent and NetEase, Positive to Kingsoft, Koei Tecmo, Nexon.

China

NetEase, Inc. operates as an leading internet technology company providing online services including content, community, communication, and commerce. The Company develops and operates online games, electronic commerce, internet media, innovative business, and other businesses. NetEase expands its businesses to Japan, North American, and other other international markets.

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NetEase (9999 HK)

China Internet – February online game market recap

Revenue of China’s online game market decreased by 23% YoY to RMB21.6bn in Feb 2023 per CNG, as new games were yet to make meaningful revenue...

CMB International

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

[NetEase (NTES US) Company Update]: Eggy Party Could Have Long Life Cycle

Eggy Party could be sustainable because of the absence of competitive games, an emerging UGC ecosystem with much potential, social connections...

Blue Lotus Research Institute

China TMT Update (Mar.17): 1024.HK/BIDU/700.HK/NTES：Baidu ERNIE Bot Press Conference Is Held

BIDU：Baidu ERNIE bot press conference is held（-）；1024HK：China's consumer rights gala exposes problems of livestreaming industry（-）；Game-related...

Blue Lotus Research Institute

[Gaming Sector Update]: Top Picks Are Tencent and NetEase, Positive to Kingsoft, Koei Tecmo, Nexon.

We recently conducted a round of interviews of Chinese start-up gaming companies. Our top picks are Tencent and NetEase. We are also positive to...

Blue Lotus Research Institute

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