China/Asia TMT

Shawn Yang

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

Thematic (Sector/Industry)

<ul>
<li>Boss Zhipin: Boss Zhipin MAU growth rate is higher than peers’, but still hard to monetize this year.</li>
<li>PDD/3690.HK: PDD launches local life services portal (+ / -)</li>
<li>NTES/700HK: The Rise of "Gaming with Influencers" on Douyin (+/-)</li>
</ul>


Boss Zhipin: Boss Zhipin MAU growth rate is higher than peers’, but still hard to monetize this year.
PDD/3690.HK: PDD launches local life services portal (+ / -)
NTES/700HK: The Rise of "Gaming with Influencers" on Douyin (+/-)


China TMT Update-BZ/PDD/3690/NTES/700/Douyin-PDD Launches Local Life Services Portal

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyzed the latest HK SFC report for aggregate short position as of Jun 30th.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short changes in Luye Pharma, Baba, Li Auto.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Jun 30th.
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short changes in Luye Pharma, Baba, Li Auto.


HK Short Interest Weekly: Luye Pharma, Baba, Li Auto

Equity Bottom-Up

<ul>
<li>Three risks in the short term: 1) Decreased gross billings from former legacies due to macro. 2) Lifecycle issues with new games. 3) Market over-optimism regarding new games and AI.</li>
<li>NetEase still has some positive catalysts in the long term, including: 1) New games and content expansions. 2) Overseas game publishing. 3) Continual improvement in margins.</li>
<li>We expect NetEase's revenue in 2Q23 to be slightly lower than the consensus estimates of 2.5%, with a 13.3% beat in profits. Cut TP to $102, but maintain BUY rating.</li>
</ul>


Three risks in the short term: 1) Decreased gross billings from former legacies due to macro. 2) Lifecycle issues with new games. 3) Market over-optimism regarding new games and AI.
NetEase still has some positive catalysts in the long term, including: 1) New games and content expansions. 2) Overseas game publishing. 3) Continual improvement in margins.
We expect NetEase's revenue in 2Q23 to be slightly lower than the consensus estimates of 2.5%, with a 13.3% beat in profits. Cut TP to $102, but maintain BUY rating.


[NetEase(NTES US, BUY, TP US$102) TP Change]: Cut TP to $102 Due to More Near-Term Downside Risks

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

TSMC (Taiwan Semiconductor Manufacturing) / Technical Analysis

TSMC (Taiwan Semiconductor Manufacturing)

<ul>
<li>Global equities (MSCI ACWI) continue to hold above $93 on ACWI-US, a level that, since January, we had anticipated would cap upside in 2023. </li>
<li>While ACWI-US remains below $96-$97 (a target we discussed was possible in our April 18, 2023 Int’l Macro Vision), we could easily see $93 act as support moving forward.</li>
<li>Therefore, we are bullish on global equities as long as ACWI-US is above $93, targeting $110.29. This is the measured move price target following the inverse head-and-shoulders breakout.</li>
</ul>


Global equities (MSCI ACWI) continue to hold above $93 on ACWI-US, a level that, since January, we had anticipated would cap upside in 2023. 
While ACWI-US remains below $96-$97 (a target we discussed was possible in our April 18, 2023 Int’l Macro Vision), we could easily see $93 act as support moving forward.
Therefore, we are bullish on global equities as long as ACWI-US is above $93, targeting $110.29. This is the measured move price target following the inverse head-and-shoulders breakout.


MSCI ACWI-US Bullish Above $93; EURO STOXX 50 Holding At Uptrend; Buys in Discretionary, Tech, Svcs.

<ul>
<li>We suggest that both Tencent and NetEase will launch blockbuster new games in their pipelines during this year's summer vacation, with NetEase slightly surpassing Tencent.  </li>
<li>Although iQIYI, Kuaishou, and BILI each have new games, their contributions are relatively small, so we maintain a SELL rating for these three companies;</li>
<li>Investors can also pay attention to Nexon and Netmarble, two Korean game companies that are expected to benefit from the launch of new games;  </li>
</ul>


We suggest that both Tencent and NetEase will launch blockbuster new games in their pipelines during this year's summer vacation, with NetEase slightly surpassing Tencent.  
Although iQIYI, Kuaishou, and BILI each have new games, their contributions are relatively small, so we maintain a SELL rating for these three companies;
Investors can also pay attention to Nexon and Netmarble, two Korean game companies that are expected to benefit from the launch of new games;  


Blue Lotus Entertainment Sector Update: Tencent, NetEase and Kingsoft Have Strong Pipeline

China

NetEase, Inc. is an Internet technology company that develops applications, services and other Internet technologies in China. The Company's core businesses consist of email service, web portal and online entertainment, including online gaming services. NetEase also offers online advertising, search, mobile applications and e-commerce.

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NetEase Inc (NTES US)

China TMT Update-BZ/PDD/3690/NTES/700/Douyin-PDD Launches Local Life Services Portal

Boss Zhipin: Boss Zhipin MAU growth rate is higher than peers’; PDD/3690.HK: PDD launches local life services portal; NTES/700HK: The Rise of...

Blue Lotus Research Institute

HK Short Interest Weekly: Luye Pharma, Baba, Li Auto

We analyzed the latest HK SFC report for aggregate short position as of Jun 30th and highlight short interest changes in Luye Pharma, Baba, Li Auto.

Ke Yan, CFA, FRM

[NetEase(NTES US, BUY, TP US$102) TP Change]: Cut TP to $102 Due to More Near-Term Downside Risks

NetEase faces three risks in the short term: 1) Decreased gross billings from former legacies due to macro. 2) Lifecycle issues with new games; 3)...

Blue Lotus Research Institute

MSCI ACWI-US Bullish Above $93; EURO STOXX 50 Holding At Uptrend; Buys in Discretionary, Tech, Svcs.

MSCI $ACWI Bullish Above $93, inverse head-and-shoulders breakout targets $110; EURO $STOXX 50 Holding At the Uptrend; Buys in Consumer...

Vermilion Research

Blue Lotus Entertainment Sector Update: Tencent, NetEase and Kingsoft Have Strong Pipeline

We suggest that both Tencent and NetEase will launch blockbuster new games in their pipelines during this year's summer vacation, with NetEase...

Blue Lotus Research Institute

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