In today’s briefing:
- Boqi Env (2377 HK)’s Partial Offer Now Open. But First The EGM
- [Baidu, Inc. (BIDU US, SELL, TP US$78) TP Change]: C3Q24 Review: No Respite in Going Ex-Growth
- Agora (API US): Rationalizing All Biz and Zero in on OpenAI
- Lucror Analytics – Morning Views Asia
- Helixtap China Report: Declining Inventory Could Help Revive Demand
Boqi Env (2377 HK)’s Partial Offer Now Open. But First The EGM
- On the 23rd October, flue gas treatment play China Boqi Environmental Hol (2377 HK) announced a buyback of 15% of shares out, at HK$1.20/share, a 16.5% premium to undisturbed.
- The buyback lifts the stake of co-founder Zeng Zhijun and concert parties to 32.59% – up from 27.71% – before options. To avoid an MGO, this requires a whitewash waiver
- The Offer Doc is now out. The EGM – and the first close – is the 20th December.
[Baidu, Inc. (BIDU US, SELL, TP US$78) TP Change]: C3Q24 Review: No Respite in Going Ex-Growth
- BIDU reported C3Q24 top line, non-GAAP operating profit and GAAP net income in-line, 4.6% and 66% vs. our estimate and in-line, 8.7% and 46% vs. consensus.
- Ads revenue declined and C4Q24 guidance was below expectations. Margin improvement was mainly achieved through personnel cuts, which we think is not sustainable. AI didn’t contribute materially to revenues;
- We see no return to growth from any of the business lines. We keep our SELL rating and cut the TP from US$84 to US$78.
Agora (API US): Rationalizing All Biz and Zero in on OpenAI
- Agora share price rallied 34% on C3Q24 earning call. During the call Agora outlined plans for large scale layoffs and committed to turn profitable for full year 2025;
- With the business rationalization, cooperation with OpenAI now becomes the only growth driver for the future. We believe with Agora’s operation-oriented business model, there is a fair chance for success;
- Considering the price cut speed of 10x in one year from Chat GPT, the audio GAI price lower from US$9/hour to US$1/hour could happen within one year.
Lucror Analytics – Morning Views Asia
- In today’s Morning Views publication we comment on developments of the following high yield issuers: Shui On Land
- The US market was closed for Thanksgiving yesterday.
- The Biden administration is weighing additional curbs on the sale of semiconductor and AI memory chips to China, reported Bloomberg on Wednesday.
Helixtap China Report: Declining Inventory Could Help Revive Demand
- Inventory lowest in 13th months
- Arbitrage widens for African and Indonesian rubber
- Frontloading resulted in spike in exports
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