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>Beike (BEKE) reported C3Q24 revenue in-line with our estimate and consensus but non-GAAP operating profit 26%/25% below, mainly due to higher commission rebate and agent salaries;</li>
<li>Strong rebound in home transaction volumes in October and November, led to our C4Q24 revenue 16% above consensus. But the rebound needs more stimulus to sustain;</li>
<li>We maintain the stock as BUY and raise TP to US$25 to reflect the near term rebound and steady market share gains.</li>
</ul>


Beike (BEKE) reported C3Q24 revenue in-line with our estimate and consensus but non-GAAP operating profit 26%/25% below, mainly due to higher commission rebate and agent salaries;
Strong rebound in home transaction volumes in October and November, led to our C4Q24 revenue 16% above consensus. But the rebound needs more stimulus to sustain;
We maintain the stock as BUY and raise TP to US$25 to reflect the near term rebound and steady market share gains.


[KE Holdings Inc. (BEKE US, BUY, TP US$25) TP Change]: C3Q24 Review: C4Q24 Rebound but What’s Next?

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 WisdomTree Emerging Markets ex-State-Owned Enterprises Index measures the performance of emerging markets stocks that are not state-owned enterprises.</li>
<li>The changes at the October rebalance were announced after market close on 4 October with implementation scheduled at the close on 16 October.</li>
<li>There are 154 adds and 80 deletes for the index with an estimated round-trip trade of US$300m.</li>
</ul>


The WisdomTree Emerging Markets ex-State-Owned Enterprises Index measures the performance of emerging markets stocks that are not state-owned enterprises.
The changes at the October rebalance were announced after market close on 4 October with implementation scheduled at the close on 16 October.
There are 154 adds and 80 deletes for the index with an estimated round-trip trade of US$300m.


WisdomTree Emerging Markets Ex-State-Owned Enterprises Index Rebalance: US$300m Round-Trip Trade

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>In 2Q24, KE’s revenue grew by 20% YoY despite the weak property market.</li>
<li>We believe property developers and personal landlords need KE more than the prosperous time.</li>
<li>We believe the stock has an upside of 148% for the end of 2025. Buy.</li>
</ul>


In 2Q24, KE’s revenue grew by 20% YoY despite the weak property market.
We believe property developers and personal landlords need KE more than the prosperous time.
We believe the stock has an upside of 148% for the end of 2025. Buy.


KE (BEKE US): Why Earning Money in Weak Market

<ul>
<li>China Literature’s revenue increased by 28% YoY in 1H24, because four novel copyrights for movies brought box office hits.</li>
<li>KE revenue increased by 20% YoY in 2Q24 compared with a 19% YoY decrease in 1Q24, as government policies supported existing home transaction.</li>
<li>Alibaba announced that it will recruit 1,000 fresh graduates for tech positions in 2025.</li>
</ul>


China Literature’s revenue increased by 28% YoY in 1H24, because four novel copyrights for movies brought box office hits.
KE revenue increased by 20% YoY in 2Q24 compared with a 19% YoY decrease in 1Q24, as government policies supported existing home transaction.
Alibaba announced that it will recruit 1,000 fresh graduates for tech positions in 2025.


China Consumption Weekly (19Aug2024): China Literature, BEKE, Alibaba, JD, JD Health, Tencent Music

<ul>
<li>KE Holdings (BEKE) reported C2Q24 revenue 12%/9% higher than our estimates/consensus, and non-GAAP NI 19%/49% higher than our estimates/consensus, due to market share gain and take rate hike.</li>
<li>We particularly like its business scalability, as its agent efficiency kept stable despite growing connected agents.</li>
<li>We maintain the stock as BUY rating and raise TP to US$24 to reflect the better growth outlook from market share gains.</li>
</ul>


KE Holdings (BEKE) reported C2Q24 revenue 12%/9% higher than our estimates/consensus, and non-GAAP NI 19%/49% higher than our estimates/consensus, due to market share gain and take rate hike.
We particularly like its business scalability, as its agent efficiency kept stable despite growing connected agents.
We maintain the stock as BUY rating and raise TP to US$24 to reflect the better growth outlook from market share gains.


[KE Holdings Inc. (BEKE US, BUY, TP US$24) TP Change]: Market Share Gain Is the Main Catalyst

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.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

KE Holdings (BEKE US)

[KE Holdings Inc. (BEKE US, BUY, TP US$25) TP Change]: C3Q24 Review: C4Q24 Rebound but What’s Next?

Beike (BEKE) reports in-line revenue but lower operating profit, with a strong rebound in home transaction volumes leading to increased revenue....

Blue Lotus Research Institute

WisdomTree Emerging Markets Ex-State-Owned Enterprises Index Rebalance: US$300m Round-Trip Trade

There are 154 adds/80 deletes for the WisdomTree Emerging Markets ex-State-Owned Enterprises Index. Round-trip trade is US$300m. There have been...

Brian Freitas

KE (BEKE US): Why Earning Money in Weak Market

We believe property developers and personal landlords need KE more than the prosperous time. We also believe the stock has an upside of 148% for...

Ming Lu

China Consumption Weekly (19Aug2024): China Literature, BEKE, Alibaba, JD, JD Health, Tencent Music

China Literature’s revenue increased by 28% YoY in 1H24. KE revenue increased by 20% YoY in 2Q24. Alibaba announced that it will recruit 1,000...

Ming Lu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[KE Holdings Inc. (BEKE US, BUY, TP US$25) TP Change]: C3Q24 Review: C4Q24 Rebound but What’s Next?

​Beike (BEKE) reports in-line revenue but lower operating profit, with a strong rebound in home transaction volumes leading to increased revenue....

Blue Lotus Research Institute

WisdomTree Emerging Markets Ex-State-Owned Enterprises Index Rebalance: US$300m Round-Trip Trade

There are 154 adds/80 deletes for the WisdomTree Emerging Markets ex-State-Owned Enterprises Index. Round-trip trade is US$300m. There have been...

Brian Freitas

KE (BEKE US): Why Earning Money in Weak Market

We believe property developers and personal landlords need KE more than the prosperous time. We also believe the stock has an upside of 148% for...

Ming Lu

China Consumption Weekly (19Aug2024): China Literature, BEKE, Alibaba, JD, JD Health, Tencent Music

China Literature’s revenue increased by 28% YoY in 1H24. KE revenue increased by 20% YoY in 2Q24. Alibaba announced that it will recruit 1,000...

Ming Lu

[KE Holdings Inc. (BEKE US, BUY, TP US$24) TP Change]: Market Share Gain Is the Main Catalyst

​KE Holdings (BEKE) outperformed revenue and non-GAAP NI estimates in Q2, showing market share gains and scalability. BUY rating maintained with TP...

Blue Lotus Research Institute

Beike (BEKE) reports in-line revenue but lower operating profit, with a strong rebound in home transaction volumes leading to increased revenue....

KE Holdings (BEKE) outperformed revenue and non-GAAP NI estimates in Q2, showing market share gains and scalability. BUY rating maintained with TP...