Research Reports

  • TCOM: 2020 Is A Challenging Year; The OTA Sector Is Taking Time To Recover; TCOM Is Likely To Deliver Better 2Q20, But Still Under Pressure
    2020-09-23

    TCOM: 2020 Is A Challenging Year; The OTA Sector Is Taking Time To Recover; TCOM Is Likely To Deliver Better 2Q20, But Still Under Pressure

    TCOM will report 2Q20 results on September 24th after the market closes followed by an 8pm EST conference call. We continue to be cautious on the travel/OTA sector as COVID-19 is still lingering. The outbreak has significantly impacted TCOM’s business in 2Q20 as well as 3Q20. Beijing, after being hit by COVID-19 in June, started to allow traffic; and on July 20th, the Ministry of Transportation (MoT) also allowed cross-provincial package tours and “air tickets + hotels” business, while the package tour business is not encouraged. In terms of international travel, more foreign carriers started to resume service to Shanghai with limited traffic. Based on our data and model, we expect TCOM’s 2Q20 revenue to be better than consensus at RMB2,332M (73.2% Y/Y decline) as well our model at RMB2,28……

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  • BILI: Adding Solid Game Ecosystem To Its Platform While Solidifying UGC Business; Expect Better 2Q20 Results
    2020-08-21

    BILI: Adding Solid Game Ecosystem To Its Platform While Solidifying UGC Business; Expect Better 2Q20 Results

    BILI will report 2Q20 results on August 26th after the markets close followed by a 9pm EST conference call. We are positive into BILI’s 2Q20 performance as well as its 3Q20 outlook. Based on our data and model, we believe BILI’s revenue in 2Q20 is likely to outperform consensus at RMB2,539M (65.1% Y/Y growth) and the high-end of its guidance range of RMB2,500M – RMB2,550M, and our model. From our 2Q20 and July data, we believe BILI is building a game ecosystem by integrating new game launches with game live streaming. While building its game ecosystem, UGC is still BILI’s core. ……

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  • ATHM: Coping With Tough Market To Deliver Good Results In 2Q20; Market Is Still Under Pressure Despite Recovery From The Low In February
    ATHM2020-08-21

    ATHM: Coping With Tough Market To Deliver Good Results In 2Q20; Market Is Still Under Pressure Despite Recovery From The Low In February

    ATHM will report 2Q20 earnings on August 25th before the markets open with an 8am EST conference call. We are positive on ATHM’s 2Q20 earnings. Based on our data and calculations, we believe ATHM’s 2Q20 revenue is likely to be better than consensus at RMB2,279M. China’s auto market showed Y/Y growth in 2Q20. Due to the outbreak of COVID-19 in China, monthly car production and wholesale sales went down sharply in February 2020 but have recovered since March 2020. ……

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  • BZUN: Higher SSS Sales And Additional Clients Drive Positive 2Q20E Performance
    2020-08-20

    BZUN: Higher SSS Sales And Additional Clients Drive Positive 2Q20E Performance

    BZUN will report 2Q20 results on August 21st before the markets open with a 7am EST conference call. We are positive on BZUN’s 2Q20 performance. The COVID-19 pandemic limited offline activities and pushed brands to put more efforts on their online stores. In 2Q20, BZUN added more brands including both domestic and international brands. Based on our data and model, we believe BZUN’s net revenue in 2Q20E is likely to be better than consensus at RMB2,077.0M.  ……

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  • PDD: Expect Strong 2Q Revenue Performance; Higher S&M Spending in 2Q20
    2020-08-18

    PDD: Expect Strong 2Q Revenue Performance; Higher S&M Spending in 2Q20

    PDD will report 2Q20 results on August 21st before the markets open with a 7:30am EST conference call. We are positive on PDD’s performance in 2Q20. In addition to the company’s significant marketing spending and subsidization, the pent-up demand from consumers and merchants participation of “6.18” deals also elevated the sales. On top of that, due to the social functions of its APP, the user engagement or shopping frequency showed continuing upward trends. Per user GMV on PDD is also likely to go up due to more sales of higher ticket value SKUs such as cell phones, computers and apparels.……

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  • VIPS: Pandemic Pushing Non-Essential Goods From Offline To Online; Post Pandemic Cautiousness Sustaining Such Move; Expect VIPS To Deliver Better 2Q20 Results
    VIPS2020-08-18

    VIPS: Pandemic Pushing Non-Essential Goods From Offline To Online; Post Pandemic Cautiousness Sustaining Such Move; Expect VIPS To Deliver Better 2Q20 Results

    VIPS will report 2Q20 results on August 19th before the markets open with a conference call at 7:30am EST. Based on our data and calculations, we believe VIPS’s 2Q20 revenue is likely to be better than consensus at RMB23,789M (4.6% Y/Y growth) and high end of its guidance (RMB22.7B – RMB23.8B). For 3Q20, we expect VIPS to continue to benefit from high demand of e-commerce as offline traffic is significantly reduced even after the pandemic due to cautiousness, which not only drives users to shop online but also to stay online.   ……

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  • IQ: User Growth Slowdown Post Hike In 1Q20 During COVID-19; Ad Market Is Also Slowing Down
    2020-08-10

    IQ: User Growth Slowdown Post Hike In 1Q20 During COVID-19; Ad Market Is Also Slowing Down

    IQ will report 1Q20 results on August 13th after the markets close followed by an 8pm EST conference call.  We are cautious on IQ’s performance in the near-term. Based on our data and calculations, we believe IQ’s total revenue in 2Q20 is likely to be slightly below consensus expectation at RMB7,318M as the users are likely to be down in 2Q20 post its hike in 1Q20 during COVID-19. ……

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  • ZTO: Significant Parcel Volume Y/Y Growth Offset By Price Competition; Expect In Line 2Q20
    2020-08-08

    ZTO: Significant Parcel Volume Y/Y Growth Offset By Price Competition; Expect In Line 2Q20

    ZTO will report 2Q20 results on August 12th after the markets close followed by a 9pm EST conference call. Based on our data and model, we believe ZTO parcel volume is likely to grow 48.0% Y/Y in 2Q20E. However, as the price competition has intensified in China’s express area, we believe its revenue is likely to grow at a lower rate and in line with consensus at RMB 6,295M (16.1% Y/Y growth). ……

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  • YY: Better Monetization From BIGO; Some Level Of Uncertainties In BIGO’s Overseas Expansion, But Still A Growth Story
    2020-08-08

    YY: Better Monetization From BIGO; Some Level Of Uncertainties In BIGO’s Overseas Expansion, But Still A Growth Story

    YY will report 2Q20 results on August 12th after the markets close followed by a 9pm EST conference call.  Based on our data and model, we believe YY’s 2Q20 revenue is likely to be higher than the high end of YY’s guidance range of RMB5,000M – RMB5,150M and higher than consensus at RMB5,143M. YY will not consolidate HUYA’s financials starting from 2Q20, as Tencent (700.HK, HK$527.50, Not Rated) now has 50.1% voting power in Huya (HUYA, $26.66, Not Rated) on a fully-diluted basis. Bigo Live and Likee were banned in India since June 30, 2020, and the company needs to monitor the US market in the next few months. For YY group, YY Live contributes margins while Bigo contributes topline growth and user growth. It is still a growth story.……

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  • TME: Continued Improvement To Its Business With New Initiatives; Expect At Least In Line 2Q20
    2020-08-07

    TME: Continued Improvement To Its Business With New Initiatives; Expect At Least In Line 2Q20

    TME will report 2Q20 results on August 10th after the close of the markets followed by an 8pm EST conference call. Based on our data, we estimate that total revenue is likely to be at least in line with consensus at RMB6,848M. In 2Q20, the music subscription business continued to experience high growth in terms of paying members and flat ARPU; social entertainment showed recovery in ARPU and stable users. QQ music released a new version with live broadcasting functions on June 8, 2020; and until the end of 2Q20, music apps including QQ music, Kugou music and Kuwo music were all equipped with live broadcasting, long form audio and videos. For long form audio and videos, the company is in the phase of focusing on acquiring users in 2020.……

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  • JOBS: Expect JOBS To Recover Along With The Recovery Of The Underlying Economy In China; Job Postings Rebounded in June
    2020-08-07

    JOBS: Expect JOBS To Recover Along With The Recovery Of The Underlying Economy In China; Job Postings Rebounded in June

    JOBS will report 2Q20 results on August 10th after the markets close followed by a 9pm EST conference call. Based on our data and calculations, we believe 51Job’s revenue in 2Q20 is likely to be within its guidance range of RMB775M – RMB825M. Overall, we believe the worst time caused by the COVID-19 is behind us, and JOBS is on the trend of recovery along with the underlying economy.……

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  • BIDU: Ad Environment Is Still Challenging For The Near-Term; 2020 Is An Investment Year For BIDU
    BIDU2020-08-06

    BIDU: Ad Environment Is Still Challenging For The Near-Term; 2020 Is An Investment Year For BIDU

    BIDU will report 2Q20results on August 13th after the markets close followed by a 9:15pm EST conference call. We are cautious on China’sadvertising market in the near term. We believe the ad environment in2020 may be challenging for the company. In 2Q20, some of the traditionale-commerce advertising shifted away from traditional platforms to livestreaming to market their products. In 3Q20, the seasonal popular sectors oftravel, education and business services did not pick up normal growth. Thesemarket factors put pressure on BIDU. ……

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  • NTES: The Growth Momentum of Games Continues In 2Q20; Growth Likely To Be Maintained On Strong Game Pipeline
    NTES2020-08-03

    NTES: The Growth Momentum of Games Continues In 2Q20; Growth Likely To Be Maintained On Strong Game Pipeline

    NTES will report 2Q20 results on August 13th before the markets open with a call at 7:30am EST. We are positive on NTES’s fundamentals as the company continues to focus on game developments. On a short terms basis, since the game business was very strong in 1Q20 with 14.1% Y/Y growth, higher than prior quarters, we believe 2Q20 is likely to be lower than 1Q as most of the students studied at home so they have less leisure time. However, the company released the list of its 2020 game pipeline on May 20th; with that, we believe the game business is likely to be strong throughout the year of 2020. ……

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  • T. H. Data Flash - DouYu – June & 2Q20: All Operational Metrics Continue To Be Strong In 2Q20; Cooperation With Tencent To Release New Game Streamings
    2020-07-22

    T. H. Data Flash - DouYu – June & 2Q20: All Operational Metrics Continue To Be Strong In 2Q20; Cooperation With Tencent To Release New Game Streamings

    We are positive into DOYU’s 2Q20 performance as our data showed continuous high growth in operational metrics. Cooperating with Tencent (700.HK. HK$539.00, Not Rated), Douyu launched live streaming activities for DNF and Brawl Stars in June 2020. In addition, the company held tournaments for major online games in 2Q20, which we believe is likely to be positive to its MAUs and paying members. Based on our data and model, we believe Douyu’s revenue is likely to be higher than the consensus at RMB2,434M (30% Y/Y growth).……

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  • Meituan Dianping – June & 2Q20: Higher Rate Of Restaurant Online Migration Accelerated By The Outbreaks And Full Recovery In Online Deliveries And Orders
    2020-07-20

    Meituan Dianping – June & 2Q20: Higher Rate Of Restaurant Online Migration Accelerated By The Outbreaks And Full Recovery In Online Deliveries And Orders

    We are positive into Meituan’s 2Q20 performance. The outbreak in early 2020 and subsequent cluster outbreaks have accelerated the restaurants’ online migration. Year-to-date, the restaurant online adoption rate was 20% higher than that at the end of 2019, which in turn led to 100% recovery in online deliveries and orders. In June 2020, Meituan Food Delivery gained market share on both GTV and orders compared with last month, and it had better Y/Y growth in 2Q20 than its peer on both GTV and orders. Based on our data and calculation, Meituan revenue in 2Q20 is likely to be better than consensus at RMB 23.627B (19.8% Y/Y growth).  ……

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  • TAL: Full Scope Of Course Offerings And Higher Attendees Driving Better FY1Q21 Results
    2020-07-17

    TAL: Full Scope Of Course Offerings And Higher Attendees Driving Better FY1Q21 Results

    TAL will report FY1Q21 results on July 30th before the markets open with an 8am EST conference call. We are positive on FY1Q21 performance. Based on our data and calculations, we believe that TAL’s revenue in FY1Q21E is likely to be higher than consensus at $886.9M driven by higher attendee growth offset by lower growth in course offerings; the different growth profile in attendees and courses is signaling better gross margin. However, the consensus for FY2Q21E at $1,225M, or 34.0% Y/Y growth is high due to: 1) some cities including Beijing and Hubei are still impacted by the outbreak; 2) the base was high as additional number of courses and sessions were pushed into FY2Q20 from FY1Q20 due to teacher’s license tests, April and May holidays in FY1Q20. ……

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  • EDU: Continuing To Do Well In K-12 While Overseas Testing and Consulting Are Experiencing Longer Than Expected Impacts From COVID-19
    EDU2020-07-16

    EDU: Continuing To Do Well In K-12 While Overseas Testing and Consulting Are Experiencing Longer Than Expected Impacts From COVID-19

    EDU will report FY4Q20 results on July 28th before the markets open with an 8am EST conference call. Long term wise, COVID-19 has led to market consolidation by the major players like EDU; the underlying off-school tutoring market is at its very beginning stage of development. We believe the underlying market is approximately $100B in 2020 and the top 47 players only accounted for $8B in revenue in 2019; EDU and TAL accounted for about 6% of the total market. Short term wise, the company reset the growth expectation for its offline tutoring business in FY3Q20, but the negative impact to its overseas testing preparation and consulting business is likely to last into FY1Q21, which has not been fully taken into consideration in consensus. ……

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  • TH Capital - T. H. Data Flash – Huya Inc. – June & 2Q20E: Positive 2Q20 Performance Driven By Busy Schedule For E-Sports Tournaments And New Game Streaming For DNF and Brawl Stars
    2020-07-15

    TH Capital - T. H. Data Flash – Huya Inc. – June & 2Q20E: Positive 2Q20 Performance Driven By Busy Schedule For E-Sports Tournaments And New Game Streaming For DNF and Brawl Stars

    We are positive on HUYA into 2Q20. The company is cooperating with Tencent and launched live streaming activities for DNF and Brawl Stars in June 2020. In addition, the company had a busy schedule for e-sports tournaments. These two factors, we believe, are likely to be positive to its MAUs and paying members. Based on our data and calculations, we believe Huya’s revenue is likely to be better than consensus at RMB2,635M (31.1% Y/Y growth) and our model at RMB2,619M. ……

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  • T. H. Data Flash – Huya Inc. – June & 2Q20E: Positive 2Q20 Performance Driven By Busy Schedule For E-Sports Tournaments And New Game Streaming For DNF and Brawl Stars
    2020-07-15

    T. H. Data Flash – Huya Inc. – June & 2Q20E: Positive 2Q20 Performance Driven By Busy Schedule For E-Sports Tournaments And New Game Streaming For DNF and Brawl Stars

    We are positive on HUYA into 2Q20. The company is cooperating with Tencent and launched live streaming activities for DNF and Brawl Stars in June 2020. In addition, the company had a busy schedule for e-sports tournaments. These two factors, we believe, are likely to be positive to its MAUs and paying members. Based on our data and calculations, we believe Huya’s revenue is likely to be better than consensus at RMB2,635M (31.1% Y/Y growth) and our model at RMB2,619M. ……

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  • T. H. Data Flash – Alibaba Group – May & FY1Q21E: Strong E-Commerce In 2Q20 Fueled By Discounts, Live Streaming And Hungry Consumers; But What’s More Important Is The High Level Issues - What Is Going On In The Market?
    2020-07-10

    T. H. Data Flash – Alibaba Group – May & FY1Q21E: Strong E-Commerce In 2Q20 Fueled By Discounts, Live Streaming And Hungry Consumers; But What’s More Important Is The High Level Issues - What Is Going On In The Market?

    We are positive on BABA’s performance into FY1Q21. Based on our data and model, BABA’s FY1Q21E revenue is likely to be above consensus at RMB147.9B (28.7% Y/Y growth) and our estimate. The strong performance is driven by: 1) Live streaming; 2) Better same store sales on discounts; and 3) For “6.18” sales, the pre-sales started in late May 2020. All of the above plus the pent-up demand from consumers made 2Q20 very special. ……

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