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>We expect that Tencent’s C3Q23’s revenue/non-IFRS operating profit/IFRS net income to be 2.3%/3.3%/4.2% above consensus.</li>
<li>We raised estimates of Tencent’s international game growth to 12% YoY to reflect the success. We also expect Tencent's advertising business to benefit from e-commerce advertisers’ competition.</li>
<li>We raised the Target Price to HK$425, which implies 22.4X PE in 2024.</li>
</ul>


We expect that Tencent’s C3Q23’s revenue/non-IFRS operating profit/IFRS net income to be 2.3%/3.3%/4.2% above consensus.
We raised estimates of Tencent’s international game growth to 12% YoY to reflect the success. We also expect Tencent's advertising business to benefit from e-commerce advertisers’ competition.
We raised the Target Price to HK$425, which implies 22.4X PE in 2024.


[Tencent(700 HK,BUY,TP HK$425)Target Price Change]: International Game and Advertising Drove Results

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> announced in-specie dividends of <a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (9618 HK)</a> (US$15bn+) in 2021 and <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a> (US$20bn) in 2022.</li>
<li>With the <a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> Board meeting on 15 November to approve Q3 results and considering the payment of a dividend, the pattern could repeat this year.</li>
<li>
<a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> owns stakes of US$1bn+ in 10 listed companies. We take a look at the stocks that could be next in line to be paid as in-specie dividends.</li>
</ul>



Tencent (700 HK) announced in-specie dividends of JD.com (9618 HK) (US$15bn+) in 2021 and Meituan (3690 HK) (US$20bn) in 2022.
With the Tencent (700 HK) Board meeting on 15 November to approve Q3 results and considering the payment of a dividend, the pattern could repeat this year.

Tencent (700 HK) owns stakes of US$1bn+ in 10 listed companies. We take a look at the stocks that could be next in line to be paid as in-specie dividends.


Tencent (700 HK): Board Meets Next Week; In-Specie Dividend Candidates

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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.

<ul>
<li>We believe advertising revenue will grow rapidly and game revenue will accelerate.</li>
<li>We also believe EPS will decrease YoY due to high “other gains” in 3Q22.</li>
<li>We expect the stock price will have an upside of 58% for year end 2024.</li>
</ul>


We believe advertising revenue will grow rapidly and game revenue will accelerate.
We also believe EPS will decrease YoY due to high “other gains” in 3Q22.
We expect the stock price will have an upside of 58% for year end 2024.


Tencent (700 HK) 3Q23 Earnings Preview: No Concern on EPS Decline, 58% Upside

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

Thematic (Sector/Industry)

<ul>
<li>700 HK/BABA US:Taobao Deals App Now Supports WeChat Pay for All Users. (+)</li>
<li>700 HK: &lt;Arena Breakout: Infinite&gt; Developing AI Technology: Voice-Command Teammates (+)</li>
<li>NTES US: &lt;Where Winds Meet&gt; Final Pre-Launch Test Scheduled for August 28th (+)</li>
</ul>


700 HK/BABA US:Taobao Deals App Now Supports WeChat Pay for All Users. (+)
700 HK: &lt;Arena Breakout: Infinite&gt; Developing AI Technology: Voice-Command Teammates (+)
NTES US: &lt;Where Winds Meet&gt; Final Pre-Launch Test Scheduled for August 28th (+)


[Blue Lotus Daily-TMT Update]:700 HK/BABA US/NTES US/JD US/2618 HK/WMT US/BABAUS/AMZNUS/PDDUS/3690HK

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Cross Asset Strategy

<ul><li>F&amp;B / In Depth: A new Chinese food and beverage wave hits Southeast Asia Forget kung pao chicken and sweet and sour pork.</li><li>There’s a new wave of food and beverage chains flowing out of China, and it’s all about Sichuan hot pot, braised chicken rice and pickle fish soup — as well as mainstays like bubble tea.</li><li>Chinese food and beverage (F&amp;B) companies have expanded quickly into Southeast Asia, and even into North America and Europe, in the past few years, driven in part by saturation at home.</li></ul>

F&amp;B / In Depth: A new Chinese food and beverage wave hits Southeast Asia Forget kung pao chicken and sweet and sour pork.There’s a new wave of food and beverage chains flowing out of China, and it’s all about Sichuan hot pot, braised chicken rice and pickle fish soup — as well as mainstays like bubble tea.Chinese food and beverage (F&amp;B) companies have expanded quickly into Southeast Asia, and even into North America and Europe, in the past few years, driven in part by saturation at home.

CX Daily: A New Chinese Food and Beverage Wave Hits Southeast Asia 

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent Holdings (ADR) (TCEHY US)

[Tencent(700 HK,BUY,TP HK$425)Target Price Change]: International Game and Advertising Drove Results

Tencent's Q3 results are expected to exceed consensus, with increased estimates for international game growth and advertising business benefiting...

Blue Lotus Research Institute

Tencent (700 HK): Board Meets Next Week; In-Specie Dividend Candidates

Tencent could make it a hat-trick of special in-specie dividend distributions. After JD.com and Meituan, Kuaishou could be next. Or it could be...

Brian Freitas

Tencent (700 HK) 3Q23 Earnings Preview: No Concern on EPS Decline, 58% Upside

Advertising revenue will grow rapidly, and game revenue will accelerate. EPS will decrease YoY due to high “other gains” in 2Q23. The stock price...

Ming Lu

[Blue Lotus Daily-TMT Update]:700 HK/BABA US/NTES US/JD US/2618 HK/WMT US/BABAUS/AMZNUS/PDDUS/3690HK

Taobao Deals app now accepts WeChat Pay, AI technology in development for <arena infinite breakout:="">, final pre-launch test for <where winds...

Blue Lotus Research Institute

CX Daily: A New Chinese Food and Beverage Wave Hits Southeast Asia

F&B / In Depth: A new Chinese food and beverage wave hits Southeast Asia Forget kung pao chicken and sweet and sour pork. There’s a new wave...

Caixin Global

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Tencent(700 HK,BUY,TP HK$425)Target Price Change]: International Game and Advertising Drove Results

​Tencent's Q3 results are expected to exceed consensus, with increased estimates for international game growth and advertising business benefiting...

Blue Lotus Research Institute

Tencent (700 HK): Board Meets Next Week; In-Specie Dividend Candidates

Tencent could make it a hat-trick of special in-specie dividend distributions. After JD.com and Meituan, Kuaishou could be next. Or it could be...

Brian Freitas

Tencent (700 HK) 3Q23 Earnings Preview: No Concern on EPS Decline, 58% Upside

Advertising revenue will grow rapidly, and game revenue will accelerate. EPS will decrease YoY due to high “other gains” in 2Q23. The stock price...

Ming Lu

[Blue Lotus Daily-TMT Update]:700 HK/BABA US/NTES US/JD US/2618 HK/WMT US/BABAUS/AMZNUS/PDDUS/3690HK

​Taobao Deals app now accepts WeChat Pay, AI technology in development for <arena infinite breakout:="">, final pre-launch test for <where winds...

Blue Lotus Research Institute

CX Daily: A New Chinese Food and Beverage Wave Hits Southeast Asia

F&B / In Depth: A new Chinese food and beverage wave hits Southeast Asia Forget kung pao chicken and sweet and sour pork. There’s a new wave...

Caixin Global

Tencent's Q3 results are expected to exceed consensus, with increased estimates for international game growth and advertising business benefiting...

Taobao Deals app now accepts WeChat Pay, AI technology in development for <arena infinite breakout:="">, final pre-launch test for <where winds...