Daily Brief China: KE Holdings Inc, Alibaba (ADR), Vedanta Resources, Atour Lifestyle Holdings, Tencent Music, Akeso Biopharma Inc and more

• 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.

• BABA reported 1Q23 revenue/non-GAAP net income in-line/17.7% vs. cons. International commerce and local services revenues beat our est., while Cloud missed.
• We expect there is still room for margin improvement in FY24. Although Taobao/Tmall will increase spending, the cost savings of other business groups will lead to an overall improvement; 
• We maintain BUY and US$ 109 TP as (1) Douyin’s impact is becoming less significant; (2) International business is growing quickly; and (3) Positive on the effect of separate listing.  

Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.

In this Insight:

1. Melco Resorts & Entertainment
2. Hopson Development
3. China Jinmao Holdings
4. Lifestyle International Holdings
5. Geely Auto

and more…

• Atour reported its 1Q23 revenue 2.8%/4.3% higher than our est./cons., and non-GAAP NI 22.7%/38.8% higher than our est./cons. The bottom-line beat is driven by strong sales growth from Occ. 
• We expect 2Q23/2023 rev. to grow 75%/65% YoY, implying 115%/112% of RevPAR recovery rate vs. 2019 and 85/291 net new hotels. 
• We maintain the BUY rating, and raise TP by US$1 to US$35 to factor in the higher gross margin expectation at 40% in 2023.

• TME reported 1Q23 results with topline beat our est. by 5.0% and bottom line beat our est. by 25.2%, due to cost-saving measures. 
• As more offline entertainment activities resume after reopening, it would adversely impact both its online music and social entertainment segments. 
• Maintain SELL and cut TP to US$ 6.0 to reflect concert impact and limited catalysts, which implies 12.5X PE in 2023.

• Amid general disappointment over China’s post-COVID recovery, high beta names like Akeso have sold off in recent days; 
• Management called for an update which specified on (1) why Ivonescimab (AK112) was absent in ASCO 2023, (2) sales update of Cadonilimab (AK104), (3) NDA and data readout timelines. 
• We came away positive;  We view management’s confirmation on progress a positive development that enhances certainty. We raise TP by HK$1 to HK$60.