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

[JOYY (YY US, SELL, TP US$25.1) Target Price Change]: Price Correction to Come Amid Global Headwinds

Battle Lines Drawn As BABA Builds Out First/Last-Mile Capacity; But Who Will Fund 75+ Bn CNY CapEx?

China/Asia TMT

Shawn Yang

Equity Bottom-Up

<ul>
<li>JOYY reported 4Q22 top line of US$ 605 mn, beat our est. by 3.2%, and GAAP net income turned negative mostly due to investment loss. </li>
<li>With limited catalyst for top line, increasing operating expense and content cost to cope with competition would put pressure on bottom line. </li>
<li>Maintain SELL rating and cut TP to US$ 23.7, implying 12.6X PE in 2023.</li>
</ul>


JOYY reported 4Q22 top line of US$ 605 mn, beat our est. by 3.2%, and GAAP net income turned negative mostly due to investment loss. 
With limited catalyst for top line, increasing operating expense and content cost to cope with competition would put pressure on bottom line. 
Maintain SELL rating and cut TP to US$ 23.7, implying 12.6X PE in 2023.


[YY US]: Maintain SELL for Cost Rebound and Competition