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.

Equity Bottom-Up

<ul>
<li>Great Wall Motor denied that many employees have resigned recently, but there many complaints from employees on social media.</li>
<li>Many small companies grew strongly, such as Tuniu up by 140% and Kanzhun up by 46%.</li>
<li>Weibo’s advertising revenue decreased, while most companies’ ad revenues have recovered.</li>
</ul>


Great Wall Motor denied that many employees have resigned recently, but there many complaints from employees on social media.
Many small companies grew strongly, such as Tuniu up by 140% and Kanzhun up by 46%.
Weibo’s advertising revenue decreased, while most companies’ ad revenues have recovered.


China Consumption Weekly (18 Mar 2024): Great Wall, KE, Tuniu, Tuhu Car, Boss Zhipin, Weibo

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy 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

<ul>
<li>BZ reported 4Q23 revenue in-line/2.6% vs. our estimate/consensus, non-GAAP NI beat our estimate/consensus by 3.5%/21.9%, mainly attributable to effective cost control measures. </li>
<li>We think the competitive advantages over peers grand BZ privilege to enjoy the early sign of hiring demand recovery, whereas overall China job market remains lackluster in early 2024.</li>
<li>We upgrade the stock from SELL to BUY and rise TP by US$7.5 to US$22/ADS.</li>
</ul>


BZ reported 4Q23 revenue in-line/2.6% vs. our estimate/consensus, non-GAAP NI beat our estimate/consensus by 3.5%/21.9%, mainly attributable to effective cost control measures. 
We think the competitive advantages over peers grand BZ privilege to enjoy the early sign of hiring demand recovery, whereas overall China job market remains lackluster in early 2024.
We upgrade the stock from SELL to BUY and rise TP by US$7.5 to US$22/ADS.


[Kanzhun Ltd. (BZ US, BUY, TP US$22) Rating Change]: Market Share Gain Ahead of Purported Recovery

<ul>
<li>BZ reported 3Q23 cash billing 0.8% higher than our est., revenue beat our estimate/consensus 5.2%/3.8%, non-GAAP NI beat our estimate/consensus by 103%/50%. </li>
<li>Cost saving and investment income are the main reasons for bottom-line beat, which we think are not sustainable.</li>
<li>Even BZ can deliver its “3 years with 100mn new users” target until 2025, we think its 20% earnings CAGR in 2023-25E still cannot justify its high valuation (TBC)</li>
</ul>


BZ reported 3Q23 cash billing 0.8% higher than our est., revenue beat our estimate/consensus 5.2%/3.8%, non-GAAP NI beat our estimate/consensus by 103%/50%. 
Cost saving and investment income are the main reasons for bottom-line beat, which we think are not sustainable.
Even BZ can deliver its “3 years with 100mn new users” target until 2025, we think its 20% earnings CAGR in 2023-25E still cannot justify its high valuation (TBC)


[Kanzhun Ltd.(BZ US, SELL, TP US$14.5) TP Change]: Growth Target Cannot Justify High Valuation

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tryt-inc" target="_blank" data-smartkarma-citation="entities:39870:1" rel="noopener">Tryt Inc (9164 JP)</a>, a leading professional recruiting and temporary staffing service in Japan, seeks to raise US$450 million. Pricing is on 5 July, and book-building is 6-11 July.   </li>
<li>In 2022, Tyrt was the leading provider of personnel dispatch and personnel introduction services in Japan's welfare and nursing sector.</li>
<li>The key elements of the bull case rest on large addressable markets, favourable market trends, strong pro-forma revenue growth, top quartile EBITDA margins and rising staff retention rates.</li>
</ul>



Tryt Inc (9164 JP), a leading professional recruiting and temporary staffing service in Japan, seeks to raise US$450 million. Pricing is on 5 July, and book-building is 6-11 July.   
In 2022, Tyrt was the leading provider of personnel dispatch and personnel introduction services in Japan's welfare and nursing sector.
The key elements of the bull case rest on large addressable markets, favourable market trends, strong pro-forma revenue growth, top quartile EBITDA margins and rising staff retention rates.


China/Asia TMT

Shawn Yang

<ul>
<li>BZ reported 1Q23 cash billing 2.9% higher than our est.; revenue in-line with our estimate and consensus;  and non-GAAP NI 36.3%/35.3% higher than our est. and cons.</li>
<li>As BZ approaching the proxy of China’s labour market, its primary hurdle is the slow recovery of labour demand and mismatch of supply and demand.</li>
<li>We maintain SELL rating and TP at US$13.5., as we are still waiting for signal for the overturn of job seeking market in China.</li>
</ul>


BZ reported 1Q23 cash billing 2.9% higher than our est.; revenue in-line with our estimate and consensus;  and non-GAAP NI 36.3%/35.3% higher than our est. and cons.
As BZ approaching the proxy of China’s labour market, its primary hurdle is the slow recovery of labour demand and mismatch of supply and demand.
We maintain SELL rating and TP at US$13.5., as we are still waiting for signal for the overturn of job seeking market in China.


[Kanzhun Ltd. (BZ US, SELL) Earnings Review]: Weak Labour Market Adds Uncertainty to Recovery

China

Kanzhun Limited provides online recruitment services. The Company connects job seekers and enterprise users through its mobile application. Kanzhun offers a mobile-native product that promotes instant direct chats between enterprise users and job seekers.

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Kanzhun (BZ US)

China Consumption Weekly (18 Mar 2024): Great Wall, KE, Tuniu, Tuhu Car, Boss Zhipin, Weibo

The company denied that many employees have resigned recently. Many small companies grew strongly, such as Tuniu up by 140% and Kanzhun up by 46%....

Ming Lu

[Kanzhun Ltd.(BZ US, SELL, TP US$14.5) TP Change]: Growth Target Cannot Justify High Valuation

BZ's 3Q23 results exceeded expectations, but the sustainability of cost savings and investment income is questionable. Even if BZ achieves its...

Blue Lotus Research Institute

TRYT IPO: The Bull Case

The key elements of the bull case rest on large addressable markets, favourable market trends, strong pro-forma revenue growth, top quartile EBITDA...

Arun George

[Kanzhun Ltd. (BZ US, SELL) Earnings Review]: Weak Labour Market Adds Uncertainty to Recovery

We maintain SELL rating and TP at US$13.5., as we are still waiting for signal for the overturn of job seeking market in China.

Blue Lotus Research Institute

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

China Consumption Weekly (18 Mar 2024): Great Wall, KE, Tuniu, Tuhu Car, Boss Zhipin, Weibo

The company denied that many employees have resigned recently. Many small companies grew strongly, such as Tuniu up by 140% and Kanzhun up by 46%....

Ming Lu

[Kanzhun Ltd. (BZ US, BUY, TP US$22) Rating Change]: Market Share Gain Ahead of Purported Recovery

​BZ's strong 4Q23 results driven by cost control measures and early signs of hiring demand recovery in China lead to stock upgrade to BUY with...

Blue Lotus Research Institute

[Kanzhun Ltd.(BZ US, SELL, TP US$14.5) TP Change]: Growth Target Cannot Justify High Valuation

​BZ's 3Q23 results exceeded expectations, but the sustainability of cost savings and investment income is questionable. Even if BZ achieves its...

Blue Lotus Research Institute

TRYT IPO: The Bull Case

The key elements of the bull case rest on large addressable markets, favourable market trends, strong pro-forma revenue growth, top quartile EBITDA...

Arun George

[Kanzhun Ltd. (BZ US, SELL) Earnings Review]: Weak Labour Market Adds Uncertainty to Recovery

We maintain SELL rating and TP at US$13.5., as we are still waiting for signal for the overturn of job seeking market in China.

Blue Lotus Research Institute

BZ's strong 4Q23 results driven by cost control measures and early signs of hiring demand recovery in China lead to stock upgrade to BUY with...

BZ's 3Q23 results exceeded expectations, but the sustainability of cost savings and investment income is questionable. Even if BZ achieves its...