Shawn Yang

China/Asia TMT

Blue Lotus Research Institute

China TMT research

Equity Bottom-Up

<ul>
<li>Kuaishou’s 4Q22 top line beat our est. by 3.9%, and non-IFRS net income was higher than our est. by 85% due to cost-saving measures.  </li>
<li>We raise forecasts for its ads and eCommerce growth due to on-track macro recovery. However, we are still concerned about the intensified competition from WeChat Video Account.</li>
<li>Maintain SELL for competition scenario, but slightly raise TP to HK$ 58 to reflect macro recovery. Our TP implies 2.1X PS/239X PE in 2023.</li>
</ul>

Kuaishou Technology operates as a content community and social platform. The Company helps users create, upload and watch short videos on mobile devices. Kuaishou Technology offers services worldwide.

<ul>
<li>RemeGen reported C2H22 top line in-line with our estimate but 9.4% below consensus. Gross margin, however, beat our estimate by 21ppt. Net-net, non-IFRS operating income missed our expectation by 15%; </li>
<li>The result highlighted RemeGen’s investment case hinging on successful license out. Product revenue itself cannot carry the company to profitability; </li>
<li>With WACC of 17%, we have already provisioned for the license out absence. But we still cut TP by HK$6 to reflect the increasing spending going forward.</li>
</ul>

RemeGen Co., Ltd. operates as a biopharmaceutical company. The Company engages in discovery, development, and commercialization of first-in-class and best-in-class biologics for thetreatment of autoimmune, oncology, and ophthalmic diseases. RemeGen conducts businesses in China and globally.

<ul>
<li>Huitongda (HTD) reported its 2H22 revenue (9.2%)/(9.0%) lower than our estimate and consensus. The non-IFRS net income beat our estimate/consensus by 23.6%/12.4% respectively. </li>
<li>HTD generated RMB652mn OCF outflow in 2H22, negatively impacted by both Covid and accounts receivables due to its SME focused model.</li>
<li>We maintain the stock as SELL rating and raise TP by HK$4.5 to HK$18.0 to factor in the shrinking minority interests on market value basis. </li>
</ul>

Huitongda Network Co., Ltd. develops a sinking market retail industry transaction and service platform. The Company provides supply chain solutions development, deal matching, logistics and after sales supporting, and other services. Huitongda Network provides its services throughout China.

Thematic (Sector/Industry)

<ul>
<li>Baba: Baba management holds a call with investors to explain recent movements. </li>
<li>700HK/ 1024HK/ BILI/ BIDU：Wechat Open Class is held, more features are announced（+/-/-/-）</li>
<li>ATAT：Accor formed alliance with Douyin to further explore independent growth (+)</li>
</ul>

<ul>
<li>Innovent reported C2H22 top line 13% below our estimate and 4.5% below consensus. Operating/net losses missed our expectation slightly, thanks to better gross margin, OPEX cutting and FX gain; </li>
<li>With biosimilars and license-in drugs contributing ~60% of total revenues, Innovent is effectively becoming a channel company. </li>
<li>We acknowledge it has a comprehensive pipeline, but stress that it is only in quantity not in quality; We maintain our SELL rating and cut TP by HK$1 to HK$24.</li>
</ul>

Innovent Biologics, Inc. operates as a biopharmaceutical company. The Company develops, manufactures, and distributes monoclonal antibody drug candidates for the treatment of oncology, ophthalmology, autoimmune, cardiovascular, and other diseases. Innovent Biologics serves customers in China.

​​​​​​​​Blue Lotus is a China headquartered research institution covering overseas listed China TMT stocks. 

Blue Lotus Research Institute
China TMT research

[Kuaishou (1024 HK) Target Price Change]: Video Account Continues to Be the Threat

We raise forecasts for its ads and eCommerce growth due to on-track macro recovery. However, we are still concerned about the intensified...

Blue Lotus Research Institute

[RemeGen (9995 HK) Target Price Change]: Provision for License Out Absence Is Adequate

With WACC of 17%, we have already provisioned for the license out absence. But we still cut TP by HK$6 to reflect the increasing spending going...

Blue Lotus Research Institute

[Huitongda (9878 HK, SELL, TP HK$18) Target Price Change]: Concerns Arise on OCF Outflow

We maintain the stock as SELL rating and raise TP by HK$4.5 to HK$18.0 to factor in the shrinking minority interests on market value basis.

Blue Lotus Research Institute

China TMT Update(Mar.31) - Baba/ 700HK/1024HK/BILI/BIDU/ATAT: Baba Management's Call

700HK/1024HK/BILI/BIDU：Wechat Open Class is held; ATAT：Accor formed alliance with Douyin to further explore independent growth in China ; key...

Blue Lotus Research Institute

[Innovent Biologics (1801 HK) Target Price Change]: Biotech Cannot Shun Itself Away from R&D Risks

We acknowledge it has a comprehensive pipeline, but stress that it is only in quantity not in quality; We maintain our SELL rating and cut TP by...

Blue Lotus Research Institute