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

<ul>
<li>We were invited to BILI’s 2023 investor day, during which BILI management presented several catalysts. </li>
<li>However, most of these catalysts appear to be minor. BILI management is fully aware of the challenges in the industry.</li>
<li>We maintain a SELL rating, and investors may consider shorting BILI after &lt;Uma Musume&gt; is launched.</li>
</ul>


We were invited to BILI’s 2023 investor day, during which BILI management presented several catalysts. 
However, most of these catalysts appear to be minor. BILI management is fully aware of the challenges in the industry.
We maintain a SELL rating, and investors may consider shorting BILI after &lt;Uma Musume&gt; is launched.


[Bilibili(BILI US, SELL, TP US$12.3)Update]: Still Struggling to Balance Growth and Monetization

<ul>
<li>We cut our revenue estimations for 2H23, mainly due to increased uncertainty surrounding the launch of "Uma Musume." </li>
<li>We also lower our estimations for live streaming due to concerns about macro factors. We slightly raise our estimations for BILI's advertising business...</li>
<li>...as we anticipate that it will benefit from gaming and e-commerce. Our rev./non-GAAP net income are 1.0% and (6.4%) vs cons in 2Q23. Cut TP to $12.3, maintaining "Sell" rating.</li>
</ul>


We cut our revenue estimations for 2H23, mainly due to increased uncertainty surrounding the launch of "Uma Musume." 
We also lower our estimations for live streaming due to concerns about macro factors. We slightly raise our estimations for BILI's advertising business...
...as we anticipate that it will benefit from gaming and e-commerce. Our rev./non-GAAP net income are 1.0% and (6.4%) vs cons in 2Q23. Cut TP to $12.3, maintaining "Sell" rating.


[Bilibili (BILI US, SELL, TP US$12.3) TP Change]: The Launch Of "Uma Musume" May Face More Delay

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyze the monthly Hong Kong Connect flows with our data engine.</li>
<li>We tabulate the top stocks by inflows, outlfows, and holding by mainland investors.</li>
<li>We highlight flows for PetroChina, China Mobile, Xpeng, Bilibili, Kuaishou, CCB, ICBC, BYD, HSBC.</li>
</ul>


We analyze the monthly Hong Kong Connect flows with our data engine.
We tabulate the top stocks by inflows, outlfows, and holding by mainland investors.
We highlight flows for PetroChina, China Mobile, Xpeng, Bilibili, Kuaishou, CCB, ICBC, BYD, HSBC.


Hong Kong Connect Flows Monthly: $366m Outflows in June

<ul>
<li>We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of June 16th.</li>
<li>The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.</li>
<li>We estimate the inflows to be USD 1.5bn and highlight flows for CCB.</li>
</ul>


We analyze the weekly Hong Kong Connect flows with our data engine for holding position as of June 16th.
The top stocks by inflows and outflows were tabulated for all market, HSCEI, mid cap and s/mid cap groups.
We estimate the inflows to be USD 1.5bn and highlight flows for CCB.


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>China’s total ad spending saw YoY recovery in 2Q23, due to both low base in 2Q22 and consumption recovery.</li><li>Total ad spend returned to positive growth of 15% YoY in April 2023, per CTR.</li><li>However, overall ad spend has yet to recover to the 2021 level, with ad spending in Apr 2023 only reached 92% of the ad spend level in Apr 2021. </li></ul><p><em>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.</em></p>

China’s total ad spending saw YoY recovery in 2Q23, due to both low base in 2Q22 and consumption recovery.Total ad spend returned to positive growth of 15% YoY in April 2023, per CTR.However, overall ad spend has yet to recover to the 2021 level, with ad spending in Apr 2023 only reached 92% of the ad spend level in Apr 2021. 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.

China Internet – 2Q23 online advertising: recovery in cautious mode

China

Bilibili Inc. provides online entertainment services. The Company offers a platform that covers a wide array of genres and media formats, including videos, live broadcasting, mobile games, animation, and comics. Bilibili serves customers in China.

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Bilibili (9626 HK)

[Bilibili(BILI US, SELL, TP US$12.3)Update]: Still Struggling to Balance Growth and Monetization

We were invited to BILI’s 2023 investor day, during which BILI management presented several catalysts. Most of these catalysts appear to be minor....

Blue Lotus Research Institute

[Bilibili (BILI US, SELL, TP US$12.3) TP Change]: The Launch Of "Uma Musume" May Face More Delay

We cut our revenue estimations for 2H23, mainly due to increased uncertainty surrounding the launch of "Uma Musume." Our rev./non-GAAP net income...

Blue Lotus Research Institute

Hong Kong Connect Flows Monthly: $366m Outflows in June

We analyzed the Hong Kong Connect Scheme for June and highlight flows for PetroChina, China Mobile, Xpeng, Bilibili, Kuaishou, CCB, ICBC, BYD, HSBC.

Ke Yan, CFA, FRM

Hong Kong Connect Flows (Jun 16th): CCB

We analyzed the Hong Kong Connect Scheme for last week. We estimate the inflows to be USD 1.5bn and highlight flows for China Construction Bank.

Ke Yan, CFA, FRM

China Internet – 2Q23 online advertising: recovery in cautious mode

China’s total ad spending saw YoY recovery in 2Q23, due to both low base in 2Q22 and consumption recovery. Total ad spend returned to positive...

CMB International

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