Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet 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>Kuaishou (KS) reported C1Q25 rev., non-IFRS op. profit, and IFRS net income in line, in line, and 5.9% vs. our est.; </li>
<li>We see both BILI and KS as mid-sized platforms with more flexibility to grow both domestically and internationally, by monetization and technology;</li>
<li>We raised our TP from HK$70 to HK$73 to reflect better outlook in entertainment live streaming and Kling-AI related revenue. Traded at cheap valuation, </li>
</ul>


Kuaishou (KS) reported C1Q25 rev., non-IFRS op. profit, and IFRS net income in line, in line, and 5.9% vs. our est.; 
We see both BILI and KS as mid-sized platforms with more flexibility to grow both domestically and internationally, by monetization and technology;
We raised our TP from HK$70 to HK$73 to reflect better outlook in entertainment live streaming and Kling-AI related revenue. Traded at cheap valuation, 


[Kuaishou (1024 HK, BUY, TP HK$73) TP Change]: C1Q25 Review: Mid-Sized Has Better Chance to Grow

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>KS performance was just fine in 1Q25, but KS stock is undervalued.</li>
<li>In 1Q25, revenue grew by 11% YoY and the operating margin was flat with 1Q24.</li>
<li>We believe KS just moved part of e-commerce revenue from online marketing to live streaming.</li>
</ul>


KS performance was just fine in 1Q25, but KS stock is undervalued.
In 1Q25, revenue grew by 11% YoY and the operating margin was flat with 1Q24.
We believe KS just moved part of e-commerce revenue from online marketing to live streaming.


Kuaishou (1024 HK): 1Q25, Just Stable, But Undervalued Stable

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>There are no constituent changes for the Hang Seng Internet &amp; IT Index (HSIII) in June but there will be float and capping changes.</li>
<li>Estimated one-way turnover is 5.95% and that leads to a round-trip trade of HK$3.2bn (US$410m). There are a few stocks with over 0.5x ADV to trade from passive trackers.</li>
<li>The inflows to <a href="https://www.smartkarma.com/entities/netease-inc" target="_blank" data-smartkarma-citation="entities:29030:1" rel="noopener">NetEase (9999 HK)</a> and <a href="https://www.smartkarma.com/entities/baidu-inc-a55ca720-5968-48f0-8194-ac94390d065c" target="_blank" data-smartkarma-citation="entities:32212:1" rel="noopener">Baidu (9888 HK)</a> and the outflows from <a href="https://www.smartkarma.com/entities/kuaishou-technology" target="_blank" data-smartkarma-citation="entities:29725:1" rel="noopener">Kuaishou Technology (1024 HK)</a> and <a href="https://www.smartkarma.com/entities/bilibili-inc-83a27302-cd7d-4e6a-a1de-bcf93eb022c3" target="_blank" data-smartkarma-citation="entities:32215:1" rel="noopener">Bilibili (9626 HK)</a> will add to the flows from other indices.</li>
</ul>


There are no constituent changes for the Hang Seng Internet &amp; IT Index (HSIII) in June but there will be float and capping changes.
Estimated one-way turnover is 5.95% and that leads to a round-trip trade of HK$3.2bn (US$410m). There are a few stocks with over 0.5x ADV to trade from passive trackers.
The inflows to NetEase (9999 HK) and Baidu (9888 HK) and the outflows from Kuaishou Technology (1024 HK) and Bilibili (9626 HK) will add to the flows from other indices.


Hang Seng Internet & IT Index (HSIII) Rebalance: Float & Capping Changes

<ul>
<li>Kuaishou reported C4Q24 revenue, IFRS operating profit, and IFRS net income slightly below our estimates and consensus. Margin outperformed.</li>
<li>Advertising and e-commerce revenue growth temporarily slowed from due to Kuaishou’s offering traffic subsidies to the internal merchants, reducing incentive to advertise, but will translate to revenues later;</li>
<li>We cut TP from HK$72 to HK$70 to reflect lowered margin outlook due to AI-related capex and R&amp;D expenses</li>
</ul>


Kuaishou reported C4Q24 revenue, IFRS operating profit, and IFRS net income slightly below our estimates and consensus. Margin outperformed.
Advertising and e-commerce revenue growth temporarily slowed from due to Kuaishou’s offering traffic subsidies to the internal merchants, reducing incentive to advertise, but will translate to revenues later;
We cut TP from HK$72 to HK$70 to reflect lowered margin outlook due to AI-related capex and R&amp;D expenses


[Kuaishou (1024 HK, BUY, TP HK$70) TP Change]: C4Q24 Review: Temporary Setback a Chance to Buy

<ul>
<li>Kuaishou (KS)’ operating margin improved to 10% in 2024 versus 4% in 2023.</li>
<li>Online marketing revenue increased by 20% and GMV increased by 17% in 2024.</li>
<li>We conclude an upside of 104% for the next twelve months.</li>
</ul>


Kuaishou (KS)’ operating margin improved to 10% in 2024 versus 4% in 2023.
Online marketing revenue increased by 20% and GMV increased by 17% in 2024.
We conclude an upside of 104% for the next twelve months.


Kuaishou (1024 HK): FY2024 Result, Op Margin to 10% from 4%, Price to Be Double

China

Kuaishou Technology operates as a content community and social platform. The Company helps users create, upload and watch short videos on mobile devices. Kuaishou Technology offers services worldwide.

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Kuaishou Technology (1024 HK)

[Kuaishou (1024 HK, BUY, TP HK$73) TP Change]: C1Q25 Review: Mid-Sized Has Better Chance to Grow

Kuaishou's strong financials and growth potential lead to raised target price by analysts, highlighting opportunities in live streaming and AI...

Blue Lotus Research Institute

Kuaishou (1024 HK): 1Q25, Just Stable, But Undervalued Stable

KS performance was just fine in 1Q25, but KS stock is undervalued. In 1Q25, revenue grew by 11% YoY and the operating margin was flat with 1Q24.

Ming Lu

Hang Seng Internet & IT Index (HSIII) Rebalance: Float & Capping Changes

No constituent changes for the HSIII in June but there will be float and capping changes. Estimated one-way turnover is 5.95% leading to a round...

Brian Freitas

[Kuaishou (1024 HK, BUY, TP HK$70) TP Change]: C4Q24 Review: Temporary Setback a Chance to Buy

Kuaishou's revenue and profit slightly below estimates, margin outperformed. Slowdown in advertising and e-commerce revenue growth due to traffic...

Blue Lotus Research Institute

Kuaishou (1024 HK): FY2024 Result, Op Margin to 10% from 4%, Price to Be Double

The operating margin improved to 10% in 2024 versus 4% in 2023. Online marketing revenue increased by 20% and GMV increased by 17% in 2024. We...

Ming Lu

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Kuaishou (1024 HK, BUY, TP HK$73) TP Change]: C1Q25 Review: Mid-Sized Has Better Chance to Grow

​Kuaishou's strong financials and growth potential lead to raised target price by analysts, highlighting opportunities in live streaming and AI...

Blue Lotus Research Institute

Kuaishou (1024 HK): 1Q25, Just Stable, But Undervalued Stable

KS performance was just fine in 1Q25, but KS stock is undervalued. In 1Q25, revenue grew by 11% YoY and the operating margin was flat with 1Q24.

Ming Lu

Hang Seng Internet & IT Index (HSIII) Rebalance: Float & Capping Changes

No constituent changes for the HSIII in June but there will be float and capping changes. Estimated one-way turnover is 5.95% leading to a round...

Brian Freitas

[Kuaishou (1024 HK, BUY, TP HK$70) TP Change]: C4Q24 Review: Temporary Setback a Chance to Buy

​Kuaishou's revenue and profit slightly below estimates, margin outperformed. Slowdown in advertising and e-commerce revenue growth due to traffic...

Blue Lotus Research Institute

Kuaishou (1024 HK): FY2024 Result, Op Margin to 10% from 4%, Price to Be Double

The operating margin improved to 10% in 2024 versus 4% in 2023. Online marketing revenue increased by 20% and GMV increased by 17% in 2024. We...

Ming Lu

Kuaishou's strong financials and growth potential lead to raised target price by analysts, highlighting opportunities in live streaming and AI...

Kuaishou's revenue and profit slightly below estimates, margin outperformed. Slowdown in advertising and e-commerce revenue growth due to traffic...