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>A key feature of iPhone 15 is 3nm Bionic chipset with enhanced game supports. </li>
<li>This, however, will not break the tie of Apple vs. Huawei;</li>
<li>We see game engine benefiting from upcoming competition between Apple, Qualcomm, MTK and Huawei, more so though AI.</li>
</ul>


A key feature of iPhone 15 is 3nm Bionic chipset with enhanced game supports. 
This, however, will not break the tie of Apple vs. Huawei;
We see game engine benefiting from upcoming competition between Apple, Qualcomm, MTK and Huawei, more so though AI.


[Blue Lotus Entertainment Sector Update]: Game Cannot Break the Tie of Hardware but AI Can

<ul>
<li>(-) Tencent's new game "SYNCED" has yielded mediocre results, leaving players disappointed.</li>
<li>3690.HK/002352.SH/DADA: Douyin expands food delivery service cities and introduces regional agents (-/+/+)</li>
<li>APPL/UBI.PA/CCOEY/HK700/NTES: The photorealistic rendering technology of the A17 Pro biochip could potentially usher smartphone gaming into the next generation. (+)</li>
</ul>


(-) Tencent's new game "SYNCED" has yielded mediocre results, leaving players disappointed.
3690.HK/002352.SH/DADA: Douyin expands food delivery service cities and introduces regional agents (-/+/+)
APPL/UBI.PA/CCOEY/HK700/NTES: The photorealistic rendering technology of the A17 Pro biochip could potentially usher smartphone gaming into the next generation. (+)


China TMT Update-700.HK/3690/2352.CH/DADA/APPL/UBI/NTES-"SYNCED"/Douyin Expands Food Delivery

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

Equity Bottom-Up

<ul><li>NetEase delivered a mixed set of results in the quarter, with revenues well below expectations, but managed an earnings beat.</li><li>Revenues from the Fantasy Westward Journey Saga continued to increase year over year in the quarter, again impressing the industry with this IP's enduring appeal.</li><li>In the second quarter, Cloud Music's GP margin increased significantly because of the growth of membership services and ongoing cost-cutting initiatives.</li></ul>

NetEase delivered a mixed set of results in the quarter, with revenues well below expectations, but managed an earnings beat.Revenues from the Fantasy Westward Journey Saga continued to increase year over year in the quarter, again impressing the industry with this IP's enduring appeal.In the second quarter, Cloud Music's GP margin increased significantly because of the growth of membership services and ongoing cost-cutting initiatives.

NetEase Inc.: New Gaming Studio Launch & Other Major Drivers

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>China’s online game market revenue grew by 37.5% YoY to RMB28.6bn in Jul 2023, with growth further accelerating (May/Jun: +16.0/23.6% YoY), according to CNG.</li><li>The strong YoY growth was mainly due to the launch of new games and low-base effect.</li><li>Overseas revenue from China’s self-developed games also returned to positive growth track in July (+7.6% YoY), thanks to the solid performance of Tencent’s and NetEase’s overseas mobile games. </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>

China’s online game market revenue grew by 37.5% YoY to RMB28.6bn in Jul 2023, with growth further accelerating (May/Jun: +16.0/23.6% YoY), according to CNG.The strong YoY growth was mainly due to the launch of new games and low-base effect.Overseas revenue from China’s self-developed games also returned to positive growth track in July (+7.6% YoY), thanks to the solid performance of Tencent’s and NetEase’s overseas mobile games. 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.

China Internet – July online game market recap

<ul>
<li>BYD/CATL: Renewed effort of German carmakers in EV positive to Chinese battery makers</li>
<li>700HK: Tencent’s management said “Hunyuan” LLM will be launched within this month(+)</li>
<li>NetEase's "Eggy Party" announced that they reached over 100 mn MAUs and surpassing 100 mn UGC maps. (+)</li>
</ul>


BYD/CATL: Renewed effort of German carmakers in EV positive to Chinese battery makers
700HK: Tencent’s management said “Hunyuan” LLM will be launched within this month(+)
NetEase's "Eggy Party" announced that they reached over 100 mn MAUs and surpassing 100 mn UGC maps. (+)


China TMT Update-BYD/CATL/700HK/NTES-“Hunyuan” LLM Will Be Launched/"Eggy Party" Reached 100 Mn MAUs

China

NetEase, Inc. operates as an leading internet technology company providing online services including content, community, communication, and commerce. The Company develops and operates online games, electronic commerce, internet media, innovative business, and other businesses. NetEase expands its businesses to Japan, North American, and other other international markets.

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NetEase (9999 HK)

[Blue Lotus Entertainment Sector Update]: Game Cannot Break the Tie of Hardware but AI Can

A key feature of iPhone 15 is 3nm Bionic chipset with enhanced game supports.We see game engine benefiting from upcoming competition between Apple,...

Blue Lotus Research Institute

China TMT Update-700.HK/3690/2352.CH/DADA/APPL/UBI/NTES-"SYNCED"/Douyin Expands Food Delivery

Tencent's new game "SYNCED" has yielded mediocre results. 3690.HK/002352.SH/DADA: Douyin expands food delivery service; APPL/UBI.PA/CCOEY/HK700...

Blue Lotus Research Institute

NetEase Inc.: New Gaming Studio Launch & Other Major Drivers

NetEase delivered a mixed set of results in the quarter, with revenues well below expectations, but managed an earnings beat. Revenues from the...

Baptista Research

China Internet – July online game market recap

China’s online game market revenue grew by 37.5% YoY to RMB28.6bn in Jul 2023, with growth further accelerating (May/Jun: +16.0/23.6% YoY),...

CMB International

China TMT Update-BYD/CATL/700HK/NTES-“Hunyuan” LLM Will Be Launched/"Eggy Party" Reached 100 Mn MAUs

German carmakers in EV positive to Chinese battery makers;700HK: “Hunyuan” LLM will be launched within this month(+);NetEase's "Eggy Party"...

Blue Lotus Research Institute

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