reports
- Tian Hou
ZTO: Positive On 4Q23 Performance And 2024 Outlook As China’s Economy ...
ZTO will report 4Q23 results on March 19th after the market closes followed by a 7:30pm ET conference call. We are positive about its 4Q23 performance. While ZTO’s business is highly correlated with China's e-commerce business, which ZTO always outpaces, the company is also maintaining its high market share. We are also positive about ZTO’s long-term position as there has been new e-commerce players in China’s market, which presents increasing demand for logistics services. In addition, 2023 is ...
- Tian Hou
PDD: Positive On 4Q23 Performance Driven By Growth From Temu
We are positive about PDD’s performance in 4Q23 driven by Temu. Temu’s business model is agency business, like that of VipShop’s (VIPS, $17.22, Not Rated) business model. Under such a model, we estimate that 30% of Temu’s GMV becomes its international revenue. Temu GMV has been growing and continues to grow rapidly. We estimate the Q/Q growth to be around 40% in 4Q23 with approximately two-thirds of GMV coming from the US market. Its recent expansion in Japan and Korea is also ramping up rapidly...
- Tian Hou
BEKE Positive On BEKE’s 4Q23 Earnings, But China’s Property Market Rem...
BEKE will report 4Q23 results on March 14th before the markets open with an 8am ET conference call. We are positive on the company’s 4Q23 earnings but neutral on 1Q24 and its long-term outlook. Based on our data and assumptions, BEKE revenue is likely to increase 13.9% Y/Y to RMB19.07B in 4Q23E, slightly better than consensus at RMB18.8B. However, 1Q24 consensus revenue seems to be aggressive.
- Tian Hou
WB: Economic Recovery In China In 2024 Is Likely to Benefit WB; Steady...
WB will report 4Q23 results on March 14th before the markets open with a 7am ET conference call. We are neutral on WB’s 4Q23 revenue performance, but the margin is likely to be better as spending is not aggressive. China's economy in 2023 showed unexpected slow growth, which is likely to be reflected in WB’s 4Q23 earnings. However, it also provides a low comparison base for 2024. WB is likely to benefit from such a situation. China's economy has its resilience, and it is on its way to gradual r...
- Tian Hou
NTES: Expect Strong 4Q23 Performance Driven By New And Existing Games ...
NTES will report 4Q23 results on February 29th before the markets open with a 7am ET conference call. We are positive on NTES’s 4Q23 performance. The positive performance, we believe, is driven by the better performance from both domestic and international markets. Internationally, over the last two years, NTES has developed 22 overseas game studios. We expect NTES to have more overseas studios set up in 2024. Domestically, we believe existing PC games contributed more to the bottom line in 4Q23...
- Tian Hou
BIDU: Investments In AI and AI Cloud To Fuel Future Growth; Positive O...
We are positive about BIDU’s AI performance in 4Q23, and its advertising business is in line with China's economy. China’s economy did not show better growth in 2023 after the government ceased all Covid restrictions. While there were some improvements in the economy in 4Q23, the recovery was still below expectations. As a result, advertising growth may not grow as well as expected in 4Q23. However, BIDU continues to invest in AI with Ernie 4.0, which was launched in October 2023. We are positiv...
- Tian Hou
BABA: Adjusting To Cope With Weaker Business Environment; Recovering A...
BABA will report FY3Q24 results on February 7th before the markets open with a 7:30am ET conference call. We believe BABA’s FY3Q24E performance is likely to be in line, but we are positive for the 2024 outlook. While China's economy in 2023 showed unexpected slow growth, it also provided a low base for 2024. China's economy has its resilience, and it is gradually on its way to recovery. As the e-commerce sector is representative of China's economy, BABA’s performance also showed such recovery. S...
- Tian Hou
ATHM: Higher EV Car Sales Positive For ATHM’s 4Q23 Performance Along W...
ATHM will report 4Q23 results on February 6th before the markets open with a 7am ET conference call. We are positive about ATHM’s 4Q23 performance. The auto market in China appears to be improving, as China's passenger car retail sales in 2023 rose 5.6% from the previous year to 21.7 million units, according to the China Passenger Car Market Information Association. That's up from 1.9% in 2022 when China was under strict Covid policies. Among that, the cumulative sales of new energy vehicles (EV...
- Tian Hou
NTES: Strong Content Producer Generates Steady Growth And Cash Flow Po...
NTES will report 3Q23 results on November 16th with a conference call at 7am ET. We are positive on NTES’s 3Q23 mobile game performance as the company released several new games, which we expect to contribute to revenue in 3Q23 and 4Q23. More importantly, we are expecting NTES to make more improvement on its margins as the company continues to downsize its Cloud Music business to optimize the model, in addition to getting rid of lower margin contribution from WoW. Higher growth in topline and im...
- Tian Hou
ZTO: Positive On ZTO’s Long Term Position In China’s Logistic Market
ZTO will report 3Q23 results on November 16th after the market closes followed by a 7:30pm ET conference call. We are neutral on its 3Q23 performance as ZTO’s performance is highly correlated with China e-commerce business, which is still in a weak growth phase. However, we are positive on ZTO’s long term position as China’s e-commerce business is adding more major players such as ByteDance, Kuaishou, and XiaoHongShu. All the new players need logistics services, and ZTO is one of the best choice...
- Tian Hou
PDD: Positive On 3Q23 Performance Driven By Growth From International ...
We are positive on PDD’s performance in 3Q23. Since November 2022, PDD has expanded its cross-border business into more than 39 countries - from the US to Europe and to Southeast Asia. Based on a public report, in 3Q23, PDD’s overseas GMV is likely to surpass US$5B. We believe its low-price strategy can enable the company to continue to gain market share overseas. Over the last several years, PDD has transformed its reputation from low quality and low price to low price only, and the quality of ...
- Tian Hou
JD: Neutral On JD’s Short-Term Performance But Positive On 3Q23 Margin...
JD will report 3Q23 results on November 15th before the US markets open with a 7am ET conference call. We are neutral on JD’s short-term performance but remain positive on 3Q23 margins and bottom line. Retail data for 3Q23 show a potential turn in China’s economy, as retail hit the low in July with 2.5% Y/Y growth; however, Y/Y growth recovered to 4.5% in August and 5.5% Y/Y in September. The slower than expected economic recovery has put pressure on e-commerce companies in China. The central go...
- Tian Hou
TME: Neutral On Short-Term Performance As Social Entertainment Busines...
TME will report 3Q23 results on November 14th before the markets open with a 6am ET conference call. Based on our data and model, we believe TME is likely to deliver 3Q23 results slightly better than consensus as the social entertainment business was weak and may continue to be weak for a while. However, we are positive on its long-term development driven by its AI initiatives. On October 26th, Tencent Music released an AI singing avatar and worked with the music studio of the artist Wang Leehom...
- Tian Hou
BEKE: Positive On 3Q23 Earnings But Neutral On Grim Outlook Of China’s...
BEKE will report 3Q23 results on November 8th before the markets open with a 7am ET conference call. We are positive on its 3Q23 earnings, but we are neutral on its long-term outlook. Based on our data and assumptions, BEKE revenue is likely to increase 45.6% Y/Y to RMB17.8B in 3Q23E, slightly better than consensus at RMB17.5B. However, 4Q23 revenue consensus seems to be high as the company may have to lower its monetization rates.
- Tian Hou
WB: Slower Than Expected Economic Recovery In China; Neutral On WB’s 3...
WB will report 3Q23 results on November 9th before the markets open with a 6am ET conference call. We are neutral on WB’s 3Q23 performance. The slower than expected economic recovery has not been able to boost people’s confidence in their economic future. The central government’s economic stimulus did not officially come until August 2023 as decided by the Politburo Meeting on Economy on July 24th. In the last 10 consecutive months, the central bank has been conducting aggressive MLF (medium-ter...
- Tian Hou
ATHM: Neutral On 3Q23 Performance On Muted Auto Industry Data
ATHM will release 3Q23 earnings on November 2nd with a conference call at 8am ET. We are neutral on ATHM’s 3Q23 performance. The auto market in China appears to be stable, as the launch of new vehicle brands decreased 11.3% Y/Y in 3Q23, vs. increase of 33.1% in 2Q23. The slower than expected economic recovery has not been able to boost people’s confidence in their economic future. However, economic recovery is the government’s top priority; therefore, we believe the auto market as well as ATHM a...
- Tian Hou
BABA: Positive On Margins In FY2Q24E; Slower Topline Growth Has Been P...
We are positive on BABA’s FY2Q24E performance. The slower than expected economic recovery has put pressure on BABA and other e-commerce companies in China. The central government’s economic stimulus did not officially come until August 2023 as a decision was made from the Politburo Meeting on Economy on July 24th. In the last 10 consecutive months, the central bank has been conducting aggressive MLF (medium-term lending facility) operations. In September alone, MLF was RMB591B. We believe the ab...
- Tian Hou
BZ: Positive On 3Q23 Performance, Supported By Meaningful Job Listing ...
We are positive about BZ’s performance in 3Q23. Due to the natural recovery of China’s non-State-owned economy as well as State-driven economic stimulus, the job market has started to show some improvement. The improvement in August is more significant than most other months since January 2022. The number of total paid jobs listings on the platform is likely to increase 13.7% Y/Y 3Q23E, up from 11.1% Y/Y growth in 2Q23, as the IT & Internet sector improved substantially.
- Tian Hou
TCOM: Positive On 2Q23 Performance And 2H2023 Outlook On High Demand F...
We are positive on TCOM’s 2Q23 performance and outlook for 2023. While China’s economy has been growing slower than expected, domestic dining and lodging are doing well. Based on data from the State Aviation, air travel volume reached 336% Y/Y (2Q22 low base) and 20.5% Q/Q growth in 2Q23 (Figure 3). As a leading online travel vendor, TCOM is benefiting from the growth.
- Tian Hou
WB: Expect WB To Benefit From Economic Stimulus; Positive On Outlook f...
We are neutral on WB’s 2Q23 performance but positive on the company’s outlook for 2023. The long-awaited economic stimulus policies have started to come out since late July 2023. Recently, China’s central government issued a series of intensive economic stimulus programs to boost confidence and restore economic growth. The programs not only include stimulating capital market, housing market, but also consumer and retail, and many more. Among these programs, AI and data economy are at the center....
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