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

[Unity (U US, BUY, TP US$48.2) Rating Change]: Major Catalysts to Realize Among Industry Recovery

[Unity Software Inc. (U US) Target Price Change]: Maintain BUY for Merger Synergy and Prudent Costs

Unity Software: Native Game Engine Support For Windows & Other Drivers

China/Asia TMT

Shawn Yang

Equity Bottom-Up

<ul>
<li>Unity’s 1Q23 top line was in line with our estimate, and  bottom line was USD 34mn, vs. our est./cons. of USD 4/(3)mn, due to headcount reductions.</li>
<li>We expect it to outperform in coming quarters because: 1) Create solutions are reducing low margin businesses with low churn rate, </li>
<li>2) Growth solutions continue to gain share driven by integrated Mediation platform, 3) announced AI products with accumulated R&amp;D further diversify Unity toolsets.</li>
</ul>


Unity’s 1Q23 top line was in line with our estimate, and  bottom line was USD 34mn, vs. our est./cons. of USD 4/(3)mn, due to headcount reductions.
We expect it to outperform in coming quarters because: 1) Create solutions are reducing low margin businesses with low churn rate, 
2) Growth solutions continue to gain share driven by integrated Mediation platform, 3) announced AI products with accumulated R&amp;D further diversify Unity toolsets.


[Unity Software(U US) 실적 리뷰]: 매출 성장으로 AI 투자가 상쇄되면서 매수 의견 유지