China/Asia TMT

Shawn Yang

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

Equity Bottom-Up

Atour Lifestyle Holdings / Equity Bottom-Up

<ul>
<li>We expect Atour to report 2Q23 revenue and non-GAAP NI at 94% YoY and 259% YoY, which is 22% and 20% above BBG consensus respectively. </li>
<li>We expect Atour’s RevPAR in 3Q23/2023 increase to 110%/114% of corresponding 2019 level from previous estimate at 105%/112%. </li>
<li>We maintain the stock as BUY rating, and maintain TP at US$35 because the operational gains has been mitigated by FX loss in terms of valuation</li>
</ul>


We expect Atour to report 2Q23 revenue and non-GAAP NI at 94% YoY and 259% YoY, which is 22% and 20% above BBG consensus respectively. 
We expect Atour’s RevPAR in 3Q23/2023 increase to 110%/114% of corresponding 2019 level from previous estimate at 105%/112%. 
We maintain the stock as BUY rating, and maintain TP at US$35 because the operational gains has been mitigated by FX loss in terms of valuation


[Atour Lifestyle (ATAT US, BUY, TP US$35) Preview]: Retail and Summer Travelling Are Two Catalysts

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Thematic (Sector/Industry)

<ul><li>We project Li Auto’s net profit to rise 27% QoQ to RMB 1.2bn in 2Q23E. Profitability in FY24E could also beat expectation on greater economies of scale.</li><li>Apart from its products, we like the Company’s high self-discipline in costs and business expansion even as it is much more resourceful than before.</li><li>We project Li Auto’s 2Q23E revenue to more than triple YoY to RMB 27.9bn, as its sales volume beat guidance.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We project Li Auto’s net profit to rise 27% QoQ to RMB 1.2bn in 2Q23E. Profitability in FY24E could also beat expectation on greater economies of scale.Apart from its products, we like the Company’s high self-discipline in costs and business expansion even as it is much more resourceful than before.We project Li Auto’s 2Q23E revenue to more than triple YoY to RMB 27.9bn, as its sales volume beat guidance.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

CMBI Research Focus List (July Edition) – Our best high conviction stock ideas

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

<ul>
<li>In May, the recovery in outbound travel remained strong, but not surprisingly so</li>
<li>Meanwhile, improvement in domestic travel activity appears to have lost steam</li>
<li>Six months in, we simply do not see any positive surprises in the travel boom</li>
</ul>


In May, the recovery in outbound travel remained strong, but not surprisingly so
Meanwhile, improvement in domestic travel activity appears to have lost steam
Six months in, we simply do not see any positive surprises in the travel boom


Monthly Chinese Tourism Tracker | Outbound Firmer | Domestic Losing Steam | No Surprises (June 2023)

<ul><li>We initiate BUY on Atour and put it as our sector top pick, because of outstanding customer satisfaction and room for expansion</li><li>While 3Q23E could be challenge with softening macro numbers and high base, we still believe the upcycle of hotel sector had just begun (even with volatility) and Atour’s FY23E guidance is conservative enough.</li><li>Our TP is based on 35x FY23E P/E, well supported by the 39%/ 135% sales/ np att. CAGR in FY22-25E. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We initiate BUY on Atour and put it as our sector top pick, because of outstanding customer satisfaction and room for expansionWhile 3Q23E could be challenge with softening macro numbers and high base, we still believe the upcycle of hotel sector had just begun (even with volatility) and Atour’s FY23E guidance is conservative enough.Our TP is based on 35x FY23E P/E, well supported by the 39%/ 135% sales/ np att. CAGR in FY22-25E. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Atour Lifestyle (ATAT US) – Top-Rated & Fast-Growing with the Right Strategy

<ul>
<li>NTES/700.HK: China’s NPPA publishes list of 89 domestic game code approval</li>
<li>9995HK/1801HK：RemeGen explored ADC-PD1 combination theray for its RC88 and RC108 with Innovent (-)</li>
<li>LKNCY/2150HK/ATAT/3690HK: Tourism spending maintain stable growth during Dragon Boat Festival, indicating sustainable recovery in service oriented consumption in China.(+)</li>
</ul>


NTES/700.HK: China’s NPPA publishes list of 89 domestic game code approval
9995HK/1801HK：RemeGen explored ADC-PD1 combination theray for its RC88 and RC108 with Innovent (-)
LKNCY/2150HK/ATAT/3690HK: Tourism spending maintain stable growth during Dragon Boat Festival, indicating sustainable recovery in service oriented consumption in China.(+)


China TMT Update-NTES/700.HK/9995HK/1801HK/LKNCY/2150HK/ATAT/3690HK:Game Code,ADC-PD1, Tourism Spend

China

Atour Lifestyle Holdings Limited operates as a holding company. The Company, through its subsidiaries, owns and manages midscale hotel chain through offline and online channels, including mobile application and weixin-wechat mini program. Atour Lifestyle Holdings serves customers in China.

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Atour Lifestyle Holdings (ATAT US)

[Atour Lifestyle (ATAT US, BUY, TP US$35) Preview]: Retail and Summer Travelling Are Two Catalysts

We maintain the stock as BUY rating, and maintain TP at US$35 because the operational gains has been mitigated by FX loss in terms of valuation

Blue Lotus Research Institute

CMBI Research Focus List (July Edition) – Our best high conviction stock ideas

We project Li Auto’s net profit to rise 27% QoQ to RMB 1.2bn in 2Q23E. Profitability in FY24E could also beat expectation on greater economies of...

CMB International

Monthly Chinese Tourism Tracker | Outbound Firmer | Domestic Losing Steam | No Surprises (June 2023)

The recovery in outbound travel remained strong in May, and domestic activity also continued to improve, though it appears to be losing some...

Tracking Traffic

Atour Lifestyle (ATAT US) – Top-Rated & Fast-Growing with the Right Strategy

We initiate BUY on Atour and put it as our sector top pick, because of outstanding customer satisfaction and room for expansion

CMB International

China TMT Update-NTES/700.HK/9995HK/1801HK/LKNCY/2150HK/ATAT/3690HK:Game Code,ADC-PD1, Tourism Spend

NTES/700.HK: 89 domestic game code approval；9995HK/1801HK：RemeGen explored ADC-PD1 combination theray；LKNCY/2150HK/ATAT/3690HK: Tourism spending...

Blue Lotus Research Institute

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