Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

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

Thematic (Sector/Industry)

<ul>
<li>700 HK: Based on &lt;DnF Mobile&gt; Developer Nexon's 2Q24 Financial Report, the Game Generated around RMB 7bn in Revenue During the Quarter (+)</li>
<li>700 HK: &lt;League of Legends&gt; to Introduce Another PVE Game Mode (+)</li>
<li>BILI US: Bilibili's &lt;Aether Gazer&gt; to Shut Down on November 12 (/)</li>
</ul>


700 HK: Based on &lt;DnF Mobile&gt; Developer Nexon's 2Q24 Financial Report, the Game Generated around RMB 7bn in Revenue During the Quarter (+)
700 HK: &lt;League of Legends&gt; to Introduce Another PVE Game Mode (+)
BILI US: Bilibili's &lt;Aether Gazer&gt; to Shut Down on November 12 (/)


[Blue Lotus Daily-TMT Update]:700 HK/BILI US/BABA US/PDD US/JD/3690HK/ZTO/1519HK/2352 CH/SHEIN/TCOM

Equity Analyst, LightStream Research

Shifara Samsudeen, FCMA, CGMA

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tencent-holdings-ltd" target="_blank" data-smartkarma-citation="entities:26:1" rel="noopener">Tencent (700 HK)</a> reported 2Q2024 results today which beat consensus. Domestic gaming resumed growth driven by the successful launch of DnF Mobile which continues to dominate charts in China.</li>
<li>All three business segments saw improvement in margins driven by Tencent's high-margin businesses incl. mini-programs, video accounts, short-videos, etc.</li>
<li>We expect continued recovery in Tencent’s earnings, however, remain cautious given slowdown in consumption spending and macroeconomic uncertainties.</li>
</ul>



Tencent (700 HK) reported 2Q2024 results today which beat consensus. Domestic gaming resumed growth driven by the successful launch of DnF Mobile which continues to dominate charts in China.
All three business segments saw improvement in margins driven by Tencent's high-margin businesses incl. mini-programs, video accounts, short-videos, etc.
We expect continued recovery in Tencent’s earnings, however, remain cautious given slowdown in consumption spending and macroeconomic uncertainties.


Tencent 2Q: Recent Launch of DnF Mobile Helps Domestic Gaming Return to Growth

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>Total revenue increased by 8% YoY in 2Q24, lightly higher than 1Q24 and 4Q23.</li>
<li>The gross margins of all business lines Improved significantly YoY.</li>
<li>We set the upside at 35% and the price target at HK$506 for the end of 2025. Buy.</li>
</ul>


Total revenue increased by 8% YoY in 2Q24, lightly higher than 1Q24 and 4Q23.
The gross margins of all business lines Improved significantly YoY.
We set the upside at 35% and the price target at HK$506 for the end of 2025. Buy.


Tencent (700 HK): 2Q24, Gross Margins of All Business Lines Improved Significantly

Analyst - Media&Entertainment Sector, Blue Lotus Research Institute

Stan Zhao

Analyst - Media&Entertainment Sector

<ul>
<li>Tencent's <em>&lt;LoLM&gt;</em> shows strong performance after anniversary event, reaching as high as No. 2 on the iOS Grossing Chart with strong player spending sentiment</li>
<li>NetEase's &lt;Justice Mobile&gt; grossing rank continues to decline due to the game's lifecycle, slightly lowering expectations. &lt;Naraka: Bladepoint Mobile&gt; revenue performance is stabilizing, with annual grossing expected around RMB 10bn</li>
<li>Bilibili's <em>&lt;FGO&gt;</em> shows a strong revenue trend, currently in the top 20 on the iOS Grossing Chart, slightly raising expectations</li>
</ul>


Tencent's &lt;LoLM&gt; shows strong performance after anniversary event, reaching as high as No. 2 on the iOS Grossing Chart with strong player spending sentiment
NetEase's &lt;Justice Mobile&gt; grossing rank continues to decline due to the game's lifecycle, slightly lowering expectations. &lt;Naraka: Bladepoint Mobile&gt; revenue performance is stabilizing, with annual grossing expected around RMB 10bn
Bilibili's &lt;FGO&gt; shows a strong revenue trend, currently in the top 20 on the iOS Grossing Chart, slightly raising expectations


Online Game Monitor: July 29-August 13, 2024

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>The constituent changes for the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a>, <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index (HSTECH INDEX)</a> and HSIII Index will be announced after market close on Friday.</li>
<li>We forecast 2 changes for the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">Hang Seng China Enterprises Index (HSCEI INDEX)</a>, 1 change for the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index (HSTECH INDEX)</a> and 3 changes for the HSIII Index.</li>
<li>With same-way and opposing flow on stocks from different passive trackers, the one-way trade is currently estimated at HK$5.2bn (US$672m). That will change with final capping done on 3 September.</li>
</ul>


The constituent changes for the Hang Seng China Enterprises Index (HSCEI INDEX), Hang Seng TECH Index (HSTECH INDEX) and HSIII Index will be announced after market close on Friday.
We forecast 2 changes for the Hang Seng China Enterprises Index (HSCEI INDEX), 1 change for the Hang Seng TECH Index (HSTECH INDEX) and 3 changes for the HSIII Index.
With same-way and opposing flow on stocks from different passive trackers, the one-way trade is currently estimated at HK$5.2bn (US$672m). That will change with final capping done on 3 September.


HSCEI/HSTECH/HSIII Index Rebalance Preview: Potential Changes, Flow & Positioning

China

Tencent Holdings Limited operates as an investment holding company. The Company, through its subsidiaries, provides Internet and mobile value-added services (VAS), online advertising, and e-commerce transactions. Tencent Holdings offers services to users worldwide.

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Tencent (700 HK)

[Blue Lotus Daily-TMT Update]:700 HK/BILI US/BABA US/PDD US/JD/3690HK/ZTO/1519HK/2352 CH/SHEIN/TCOM

Nexon's <dnf mobile> game generates RMB 7bn, League of Legends adds new PVE mode, Bilibili's <aether gazer> shutting down on November 12.<...

Blue Lotus Research Institute

Tencent 2Q: Recent Launch of DnF Mobile Helps Domestic Gaming Return to Growth

Tencent's 2Q2024 results beats consensus, driven by growth in domestic gaming and high-margin businesses. Domestic gaming resumed growth driven by...

Shifara Samsudeen, FCMA, CGMA

Tencent (700 HK): 2Q24, Gross Margins of All Business Lines Improved Significantly

Total revenue increased by 8% YoY in 2Q24, lightly higher than 1Q24 and 4Q23. The gross margins of all business lines Improved significantly YoY.

Ming Lu

Online Game Monitor: July 29-August 13, 2024

Tencent's <lolm> excels in post-anniversary events, NetEase's <justice mobile> declines and Bilibili's <fgo> sees strong revenue growth.</fgo><...

Blue Lotus Research Institute

HSCEI/HSTECH/HSIII Index Rebalance Preview: Potential Changes, Flow & Positioning

We expect 2 changes for the HSCEI, 1 for the HSTECH, 2 for the HSIII. Tne-way trade is estimated at HK$5.2bn (US$672m). There is same-way and...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Blue Lotus Daily-TMT Update]:700 HK/BILI US/BABA US/PDD US/JD/3690HK/ZTO/1519HK/2352 CH/SHEIN/TCOM

​Nexon's <dnf mobile> game generates RMB 7bn, League of Legends adds new PVE mode, Bilibili's <aether gazer> shutting down on November 12.<...

Blue Lotus Research Institute

Tencent 2Q: Recent Launch of DnF Mobile Helps Domestic Gaming Return to Growth

​Tencent's 2Q2024 results beats consensus, driven by growth in domestic gaming and high-margin businesses. Domestic gaming resumed growth driven by...

Shifara Samsudeen, FCMA, CGMA

Tencent (700 HK): 2Q24, Gross Margins of All Business Lines Improved Significantly

Total revenue increased by 8% YoY in 2Q24, lightly higher than 1Q24 and 4Q23. The gross margins of all business lines Improved significantly YoY.

Ming Lu

Online Game Monitor: July 29-August 13, 2024

​Tencent's <lolm> excels in post-anniversary events, NetEase's <justice mobile> declines and Bilibili's <fgo> sees strong revenue growth.</fgo><...

Blue Lotus Research Institute

HSCEI/HSTECH/HSIII Index Rebalance Preview: Potential Changes, Flow & Positioning

We expect 2 changes for the HSCEI, 1 for the HSTECH, 2 for the HSIII. Tne-way trade is estimated at HK$5.2bn (US$672m). There is same-way and...

Brian Freitas

Nexon's <dnf mobile> game generates RMB 7bn, League of Legends adds new PVE mode, Bilibili's <aether gazer> shutting down on November 12.<...

Tencent's 2Q2024 results beats consensus, driven by growth in domestic gaming and high-margin businesses. Domestic gaming resumed growth driven by...

Tencent's <lolm> excels in post-anniversary events, NetEase's <justice mobile> declines and Bilibili's <fgo> sees strong revenue growth.</fgo><...