Daily Brief China: Kuaishou Technology, Hong Kong Hang Seng Index, Intco Medical Technology Co., Ltd-A and more

In today’s briefing:

[Kuaishou (1024 HK, SELL, TP HK$50) Preview]: Monetization Is On-Track Amid Competitive Pressure
EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades-Where Is the Stimulus
China Healthcare Weekly (Jul.21) – New Growth Points by NDRC, License-In Model Isn’t Outdated, Intco

[Kuaishou (1024 HK, SELL, TP HK$50) Preview]: Monetization Is On-Track Amid Competitive Pressure

We expect Kuaishou to report C2Q23 revenue and non-IFRS net income that are in-line and 27% vs consensus, respectively.
We slightly cut our revenue forecast for live streaming but increased our revenue forecast for online ads. Kuaishou’s margin beat is mainly due to efficient cost control, especially in overseas.
Kuaishou still has several minor positive catalysts, but WeChat Video Accounts is the major short thesis in the long run. We raise EPS forecasts, but maintain SELL.

NDRC issued “Guiding Catalogue for Industrial Structure Adjustment“. The newly proposed adjustments deserve investors’ attention, because they are the areas where investors could receive excess returns in China healthcare.
Obtaining assets from external sources remains paramount for MNCs. License-in mode isn’t outdated. As long as companies can make money, the ways to acquire assets can be diversified.
Intco’s performance/stock price has bottomed out, and would gradually resume growth/rebound afterwards. Its market value would return to RMB20-30 billion. Intco would achieve a distress reversal, with attractive investment value.

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