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 reported C2Q24 revenue, IFRS operating profit, and IFRS net income in-line, in-line, and 5.7% vs.  our estimates; and in-line, 9.0% and 14% vs. the consensus. </li>
<li>The bright spot was strong growth in its advertising and stabilization in the regulation-affected live streaming. Our BUY case of AI empowering mid-sized traffic platforms is intact;</li>
<li>We cut TP to HK$75 to reflect the sustained damage of weak consumption. The stock is trading at only 8.5x PE for 2025.</li>
</ul>


Kuaishou reported C2Q24 revenue, IFRS operating profit, and IFRS net income in-line, in-line, and 5.7% vs.  our estimates; and in-line, 9.0% and 14% vs. the consensus. 
The bright spot was strong growth in its advertising and stabilization in the regulation-affected live streaming. Our BUY case of AI empowering mid-sized traffic platforms is intact;
We cut TP to HK$75 to reflect the sustained damage of weak consumption. The stock is trading at only 8.5x PE for 2025.


[Kuaishou (1024 HK ,BUY, TP HK$75) TP Change]: Temporary Setback from Weak Macro…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>Kuaishou announced 2Q24 results: total revenue was up by 12% YoY to RMB31.0bn, largely in line with consensus estimate; adjusted net profit grew by 74% YoY to RMB4.7bn, 8% ahead of consensus estimate thanks to better-thanexpected cost optimization and opex control.</li><li>E-commerce GMV growth (+15% YoY) in 2Q24 was slower than consensus expectation amid soft consumption sentiment and intense competition, and we expect the pressure to continue in 2H24E.</li><li>Nonetheless, we remain upbeat on Kuaishou’s FY24 earnings growth outlook on its solid online marketing business and margin expansion. </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>

Kuaishou announced 2Q24 results: total revenue was up by 12% YoY to RMB31.0bn, largely in line with consensus estimate; adjusted net profit grew by 74% YoY to RMB4.7bn, 8% ahead of consensus estimate thanks to better-thanexpected cost optimization and opex control.E-commerce GMV growth (+15% YoY) in 2Q24 was slower than consensus expectation amid soft consumption sentiment and intense competition, and we expect the pressure to continue in 2H24E.Nonetheless, we remain upbeat on Kuaishou’s FY24 earnings growth outlook on its solid online marketing business and margin expansion. 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.

Kuaishou (1024 HK) - Intact Earnings Growth Outlook

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>The gross margin improved 5 pp (percentage points) YoY and the operating margin improved 7 pp YoY in 2Q24.</li>
<li>In 2Q24, total revenue grew by 12% YoY, with the main business up by 22% YoY.</li>
<li>Three cross-sectional comparisons reach similar stock upsides about 100%. Buy.</li>
</ul>


The gross margin improved 5 pp (percentage points) YoY and the operating margin improved 7 pp YoY in 2Q24.
In 2Q24, total revenue grew by 12% YoY, with the main business up by 22% YoY.
Three cross-sectional comparisons reach similar stock upsides about 100%. Buy.


KS / Kuaishou (1024 HK): 2Q24, Significant Margin Improvement and 100% Stock Upside

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Equity Capital Markets

Midea Group Co Ltd A / Equity Capital Markets

<ul>
<li>Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.</li>
<li>On the IPO front, <a href="https://www.smartkarma.com/entities/brainbees-solutions" target="_blank" data-smartkarma-citation="entities:36115:1" rel="noopener">BrainBees</a> contiued along <a href="https://www.smartkarma.com/entities/ola-electric-mobility-pvt-ltd" target="_blank" data-smartkarma-citation="entities:40618:1" rel="noopener">Ola Electric</a>'s path, ensuring that India's ECM wave will continue, for now.</li>
<li>Once again there was only one placement this week, that too in India, just like the week before.</li>
</ul>


Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
On the IPO front, BrainBees contiued along Ola Electric's path, ensuring that India's ECM wave will continue, for now.
Once again there was only one placement this week, that too in India, just like the week before.


ECM Weekly (19th Aug 2024) - Midea, China Res, WeRide, FirstCry, ACME, Gadgil, 99 Speed, Hind Zinc

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>As expected, <a href="https://www.smartkarma.com/entities/asm-pacific-technology-ltd" target="_blank" data-smartkarma-citation="entities:15061:1" rel="noopener">ASM Pacific Technology (522 HK)</a> will replace <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technol" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technol (1833 HK)</a> in the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index (HSTECH INDEX)</a> at the close on 6 September.</li>
<li>Estimated one-way turnover at the rebalance is 3.2% resulting in a round-trip trade of HK$6.5bn. Passives need to buy over 7x ADV in <a href="https://www.smartkarma.com/entities/asm-pacific-technology-ltd" target="_blank" data-smartkarma-citation="entities:15061:1" rel="noopener">ASM Pacific Technology (522 HK)</a>. </li>
<li>Positioning appears light in both stocks. Expect <a href="https://www.smartkarma.com/entities/asm-pacific-technology-ltd" target="_blank" data-smartkarma-citation="entities:15061:1" rel="noopener">ASM Pacific Technology (522 HK)</a> to move up and <a href="https://www.smartkarma.com/entities/ping-an-healthcare-and-technol" target="_blank" data-smartkarma-citation="entities:27008:1" rel="noopener">Ping An Healthcare and Technol (1833 HK)</a> to move lower near-term.</li>
</ul>


As expected, ASM Pacific Technology (522 HK) will replace Ping An Healthcare and Technol (1833 HK) in the Hang Seng TECH Index (HSTECH INDEX) at the close on 6 September.
Estimated one-way turnover at the rebalance is 3.2% resulting in a round-trip trade of HK$6.5bn. Passives need to buy over 7x ADV in ASM Pacific Technology (522 HK). 
Positioning appears light in both stocks. Expect ASM Pacific Technology (522 HK) to move up and Ping An Healthcare and Technol (1833 HK) to move lower near-term.


HSTECH Index Rebalance: ASMPT (522 HK) Replaces Ping An Healthcare (1833 HK)

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$75) TP Change]: Temporary Setback from Weak Macro…Reiterate BUY

Kuaishou reports in-line revenue and profit, strong growth in advertising, and stable live streaming despite regulation impact.

Blue Lotus Research Institute

Kuaishou (1024 HK) - Intact Earnings Growth Outlook

Kuaishou announced 2Q24 results: total revenue was up by 12% YoY to RMB31.0bn, largely in line with consensus estimate; adjusted net profit grew by...

CMB International

KS / Kuaishou (1024 HK): 2Q24, Significant Margin Improvement and 100% Stock Upside

The gross margin improved 5 pp (percentage points) YoY and the operating margin improved 7 pp YoY in 2Q24. In 2Q24, total revenue grew by 12% YoY,...

Ming Lu

ECM Weekly (19th Aug 2024) - Midea, China Res, WeRide, FirstCry, ACME, Gadgil, 99 Speed, Hind Zinc

Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.

Sumeet Singh

HSTECH Index Rebalance: ASMPT (522 HK) Replaces Ping An Healthcare (1833 HK)

ASMPT will replace Ping An Healthcare in the HSTECH at the close on 6 Sep. Changes were expected but positioning appears light. With 6.5% of float...

Brian Freitas

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[Kuaishou (1024 HK ,BUY, TP HK$75) TP Change]: Temporary Setback from Weak Macro…Reiterate BUY

​Kuaishou reports in-line revenue and profit, strong growth in advertising, and stable live streaming despite regulation impact.

Blue Lotus Research Institute

Kuaishou (1024 HK) - Intact Earnings Growth Outlook

Kuaishou announced 2Q24 results: total revenue was up by 12% YoY to RMB31.0bn, largely in line with consensus estimate; adjusted net profit grew by...

CMB International

KS / Kuaishou (1024 HK): 2Q24, Significant Margin Improvement and 100% Stock Upside

The gross margin improved 5 pp (percentage points) YoY and the operating margin improved 7 pp YoY in 2Q24. In 2Q24, total revenue grew by 12% YoY,...

Ming Lu

ECM Weekly (19th Aug 2024) - Midea, China Res, WeRide, FirstCry, ACME, Gadgil, 99 Speed, Hind Zinc

Aequitas Research's weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.

Sumeet Singh

HSTECH Index Rebalance: ASMPT (522 HK) Replaces Ping An Healthcare (1833 HK)

ASMPT will replace Ping An Healthcare in the HSTECH at the close on 6 Sep. Changes were expected but positioning appears light. With 6.5% of float...

Brian Freitas

Kuaishou reports in-line revenue and profit, strong growth in advertising, and stable live streaming despite regulation impact.