Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet 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 Tencent to report C3Q24 revenue, IFRS operating profit and IFRS net income in line, 5.7% and 7.1% vs. consensus. </li>
<li>Reason to own Tencent include: (1) company on an up game product cycle, (2) ample advertising inventory to benefit from GAI, (3) investor-friendly corporate culture. </li>
<li>With consumption uptick in C4Q24 and beyond, we see improvement in Tencent’s FinTech business. Temporary content shortage hurt Long Form Video this quarter. </li>
</ul>


We expect Tencent to report C3Q24 revenue, IFRS operating profit and IFRS net income in line, 5.7% and 7.1% vs. consensus. 
Reason to own Tencent include: (1) company on an up game product cycle, (2) ample advertising inventory to benefit from GAI, (3) investor-friendly corporate culture. 
With consumption uptick in C4Q24 and beyond, we see improvement in Tencent’s FinTech business. Temporary content shortage hurt Long Form Video this quarter. 


[Tencent (700 HK, BUY, TP HK$508) TP Change]: Upswing Performance & Cornerstone of the Sector

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>This past week saw mainland investors trade HK$476bn of stock. Not as big as last "week" but still big. BABA buying has slowed, but net buying was still HK$24.4bn </li>
<li>The buying is starting to see a longer tail of net positive names, and properties this week saw big net buying, even before the Sunac placement which added more.</li>
<li>High-Div SOEs are seeing outflows as beta sees inflows. I expect this to continue.</li>
</ul>


This past week saw mainland investors trade HK$476bn of stock. Not as big as last "week" but still big. BABA buying has slowed, but net buying was still HK$24.4bn 
The buying is starting to see a longer tail of net positive names, and properties this week saw big net buying, even before the Sunac placement which added more.
High-Div SOEs are seeing outflows as beta sees inflows. I expect this to continue.


HK Connect SOUTHBOUND Flows (To 18 Oct 2024); Net Flows Big, Selling in Brokers, Buying in Props

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.

<ul><li>We are upbeat on Tencent 2H24 earnings growth outlook, supported by the reacceleration of games revenue growth and incremental revenue contribution from high-margin businesses (e.g. Video Account and Mini Games).</li><li>In the longer term, China’s potential policy stimulus to boost economic growth and consumption may benefit Tencent’s FBS (fintech and business services) and advertising businesses.</li><li>However, in 3Q24, overall consumption sentiment remains relatively soft and continues to weigh on Tencent’s fintech business. </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>

We are upbeat on Tencent 2H24 earnings growth outlook, supported by the reacceleration of games revenue growth and incremental revenue contribution from high-margin businesses (e.g. Video Account and Mini Games).In the longer term, China’s potential policy stimulus to boost economic growth and consumption may benefit Tencent’s FBS (fintech and business services) and advertising businesses.However, in 3Q24, overall consumption sentiment remains relatively soft and continues to weigh on Tencent’s fintech business. 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.

Tencent (700 HK) - Upbeat on Games Business and Earnings Growth Outlook

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>Tencent repurchased 250 million shares and the market has not paid any attention to its significant margin improvements.</li>
<li>Lalatech updated its IPO file for 1H24, in which both GTV  and revenue were up by 18% YoY.</li>
<li>Seres expects its revenue will grow by 518% YoY to 559% YoY for 3Q24.</li>
</ul>


Tencent repurchased 250 million shares and the market has not paid any attention to its significant margin improvements.
Lalatech updated its IPO file for 1H24, in which both GTV  and revenue were up by 18% YoY.
Seres expects its revenue will grow by 518% YoY to 559% YoY for 3Q24.


China Consumption Weekly (14 Oct 2024): Tencent, Lalatech, Seres, BYD, NIO, Trip.com

Pan-Asia Index Flows & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Pan-Asia Index Flows & Special Situations

<ul>
<li>The Hang Seng Internet &amp; IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).</li>
<li>In this insight, we take a look at our capping flow expectations for the December 2024 index rebal event.</li>
<li>We have also presented our index change expectations for the next semiannual index review which will take place in March 2025.</li>
</ul>


The Hang Seng Internet &amp; IT (HSIII) index represents the top 30 stocks related to internet and information technology businesses listed in Hong Kong (HKEX).
In this insight, we take a look at our capping flow expectations for the December 2024 index rebal event.
We have also presented our index change expectations for the next semiannual index review which will take place in March 2025.


Quiddity Leaderboard HS Internet & IT: Dec 24 Flow Expectations and Mar 25 Expected ADDs/DELs

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$508) TP Change]: Upswing Performance & Cornerstone of the Sector

Tencent expected to report strong Q3 results, reasons to own include up game cycle and advertising inventory, potential growth in FinTech...

Blue Lotus Research Institute

HK Connect SOUTHBOUND Flows (To 18 Oct 2024); Net Flows Big, Selling in Brokers, Buying in Props

HK Southbound Connect investors traded HK$475bn and net bough HK$24bn+ this past week, with almost every sector seeing inflows except tech. Some...

Travis Lundy

Tencent (700 HK) - Upbeat on Games Business and Earnings Growth Outlook

We are upbeat on Tencent 2H24 earnings growth outlook, supported by the reacceleration of games revenue growth and incremental revenue contribution...

CMB International

China Consumption Weekly (14 Oct 2024): Tencent, Lalatech, Seres, BYD, NIO, Trip.com

Tencent repurchased 250 million shares in the first three quarters. Lalatech's GTV and revenue were up by 18% YoY. Seres expects its revenue will...

Ming Lu

Quiddity Leaderboard HS Internet & IT: Dec 24 Flow Expectations and Mar 25 Expected ADDs/DELs

We estimate there to be one-way capping flows of US$190mn in December 2024. This translates to a turnover of approximately 5%.

Janaghan Jeyakumar, CFA

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Tencent (700 HK, BUY, TP HK$508) TP Change]: Upswing Performance & Cornerstone of the Sector

​Tencent expected to report strong Q3 results, reasons to own include up game cycle and advertising inventory, potential growth in FinTech...

Blue Lotus Research Institute

HK Connect SOUTHBOUND Flows (To 18 Oct 2024); Net Flows Big, Selling in Brokers, Buying in Props

HK Southbound Connect investors traded HK$475bn and net bough HK$24bn+ this past week, with almost every sector seeing inflows except tech. Some...

Travis Lundy

Tencent (700 HK) - Upbeat on Games Business and Earnings Growth Outlook

We are upbeat on Tencent 2H24 earnings growth outlook, supported by the reacceleration of games revenue growth and incremental revenue contribution...

CMB International

China Consumption Weekly (14 Oct 2024): Tencent, Lalatech, Seres, BYD, NIO, Trip.com

Tencent repurchased 250 million shares in the first three quarters. Lalatech's GTV and revenue were up by 18% YoY. Seres expects its revenue will...

Ming Lu

Quiddity Leaderboard HS Internet & IT: Dec 24 Flow Expectations and Mar 25 Expected ADDs/DELs

We estimate there to be one-way capping flows of US$190mn in December 2024. This translates to a turnover of approximately 5%.

Janaghan Jeyakumar, CFA

Tencent expected to report strong Q3 results, reasons to own include up game cycle and advertising inventory, potential growth in FinTech...