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

Equity Bottom-Up

<ul>
<li>KE Holdings’ (BEKE) reported C4Q23 revenue 6.2%/7.5% above our est./cons.. Its non-GAAP net income miss our est. by 8.3%, due to bad debt write-off and year-end bonus</li>
<li>Although recovery in new home market remains muddy, we view Beike’s commitment to deliver 5% yield through dividend and stock buyback as investor friendly. </li>
<li>We reiterate BUY rating and maintain TP at US$24/ADS . </li>
</ul>


KE Holdings’ (BEKE) reported C4Q23 revenue 6.2%/7.5% above our est./cons.. Its non-GAAP net income miss our est. by 8.3%, due to bad debt write-off and year-end bonus
Although recovery in new home market remains muddy, we view Beike’s commitment to deliver 5% yield through dividend and stock buyback as investor friendly. 
We reiterate BUY rating and maintain TP at US$24/ADS . 


[KE Holdings (BEKE US, BUY, TP US$24) Review]: Investor Friendly & Best-In-Class…Reiterate BUY

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.

<ul><li>Beike reported (15 Mar) 4Q23 results: revenue grew 20.6% YoY on a low base to RMB20.2bn, 7% better than Bloomberg consensus estimates, mainly on better-than-expected GTV generation from existing home transactions (EHT), and stronger-than-expected revenue growth in home renovation business.</li><li>NonGAAP net income was RMB1.7bn, 9.5% better than consensus, thanks to betterthan-expected gross profit generation aided by better-than-expected cost optimization.</li><li>For 2023, total revenue grew 28% YoY to RMB77.8bn, and nonGAAP net income was RMB9.8bn, translating into a 12.6% NPM (2022: 4.7%). </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.

Beike reported (15 Mar) 4Q23 results: revenue grew 20.6% YoY on a low base to RMB20.2bn, 7% better than Bloomberg consensus estimates, mainly on better-than-expected GTV generation from existing home transactions (EHT), and stronger-than-expected revenue growth in home renovation business.NonGAAP net income was RMB1.7bn, 9.5% better than consensus, thanks to betterthan-expected gross profit generation aided by better-than-expected cost optimization.For 2023, total revenue grew 28% YoY to RMB77.8bn, and nonGAAP net income was RMB9.8bn, translating into a 12.6% NPM (2022: 4.7%). 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.

Ke Holdings (BEKE US) - Positive Sign Showed Amid Bumpy Recovery

Thematic (Sector/Industry)

<ul><li>YY’s Asia reported that 12 national banks are planning to provide RMB 80bn syndicate loan for Vanke to repay its future maturing debt, and several banks have confirmed this news.</li><li>We think this confirms our previous statement that “regulators have reached a consensus on Vanke’s position as a systematically important developer”, showing a clear attitude to provide financial assistance to Vanke.</li><li>This would bring more confidence to the market during the debt repayment peak.</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.

YY’s Asia reported that 12 national banks are planning to provide RMB 80bn syndicate loan for Vanke to repay its future maturing debt, and several banks have confirmed this news.We think this confirms our previous statement that “regulators have reached a consensus on Vanke’s position as a systematically important developer”, showing a clear attitude to provide financial assistance to Vanke.This would bring more confidence to the market during the debt repayment peak.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.

Property - Sales Show Recovery Sign, Banks May Help Semi-SOE

APAC IPOs & Placements, Aequitas Research

Clarence Chu

APAC IPOs & Placements

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.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tuhu-car-inc" target="_blank" data-smartkarma-citation="entities:36012:1" rel="noopener">Tuhu Car (9690 HK)</a> was listed in Hong Kong on 26th Sept 2023 after raising US$151m. The IPO had been a 100% primary offering.</li>
<li>Tuhu is an integrated online and offline platform for automotive services in China.</li>
<li>Trading with a very small float of 1.8%, in its upcoming six-month lockup expiry, &gt;90% of Tuhu’s pre-IPO investors, cornerstones and management combined stakes will come off six-month lockup expiry.</li>
</ul>



Tuhu Car (9690 HK) was listed in Hong Kong on 26th Sept 2023 after raising US$151m. The IPO had been a 100% primary offering.
Tuhu is an integrated online and offline platform for automotive services in China.
Trading with a very small float of 1.8%, in its upcoming six-month lockup expiry, &gt;90% of Tuhu’s pre-IPO investors, cornerstones and management combined stakes will come off six-month lockup expiry.


Tuhu Car Lock-Up Expiry - Would Need Some Selling to Improve Liquidity when US$1.5bn Comes Unlocked

<ul>
<li>LI/XPEV/NIO/1211 HK:  Sales of strong EV brands held up better during CNY, Li and Tesla led and AITO and BYD followed (+)</li>
<li>BEKE : ByteDance suspend self-operating home decoration business( + ) </li>
<li>ZLAB:Bristol-Myers Squibb （BMS） outsources Opdivo sales in ten southwestern provinces to Zai Lab, a long-term positive but with many prerequisites (+)</li>
</ul>


LI/XPEV/NIO/1211 HK:  Sales of strong EV brands held up better during CNY, Li and Tesla led and AITO and BYD followed (+)
BEKE : ByteDance suspend self-operating home decoration business( + ) 
ZLAB:Bristol-Myers Squibb （BMS） outsources Opdivo sales in ten southwestern provinces to Zai Lab, a long-term positive but with many prerequisites (+)


[Blue Lotus Daily]:LI/XPEV/NIO/1211 HK/BEKE/ZLAB

China

KE Holdings Inc. operates as an integrated online and offline platform for housing transactions and services. The Company offers existing and new home sales, home rentals, home renovation, real estate financial solutions, and other services. KE Holdings conducts businesses in China.

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KE Holdings (BEKE US)