Thursday, November 17, 2022

Company Report China Merchants Securities (HK) Co., Ltd.

Hong Kong Equity Research

Tencent (700 HK) Tommy WONG

+852 3189 6634
Crystal LI, CFA
+852 3189 6122
Cost control and advertising drive 3Q22 beat tommywong@cmschina.com.hk crystalli@cmschina.com.hk
■ 3Q22 revenue -2% yoy, Non-IFRS NI +2% yoy, 7% beat, thanks to
sequential improvement on ad and Fintech plus effective cost control Kaia ZHANG
■ Gaming headwinds likely to continue on macro and licenses; Meituan +852 3189 6176

distribution not a complete surprise kaiazhang@cmschina.com.hk

■ Maintain BUY; TP revised down from HKD459 to HKD430
3Q22 bottom line beat on effective cost control WHAT’S NEW
3Q22 revenue -2%/+5% yoy/qoq (vs. -3%/-1% yoy/qoq in 2Q22) to RMB140bn, 3Q22 results; Forecast/TP revision
inline. Bottom line beat on cost savings/efficiency push with GPM increasing 1 ppt
qoq, and both Non-IFRS OPM and Non-IFRS NPM up 2 ppt qoq, driving Non-
IFRS Net income +2% yoy in 3Q22 (vs. -17% yoy in 2Q22), 7% beat. Cost savings BUY
efforts include selling and marketing expenses, bandwidth/server resources Previous BUY
optimization for video accounts and non-performing segment adjustments.
Price (Nov. 16, 2022) HKD294.4
Mixed performance among segments
12-month Target Price HKD430
3Q22 revenue growth varied between segments, gaming has turned more
(Potential up/downside) (+46.1%)
sluggish with domestic gaming registering -7% yoy compared to -1% yoy for
previous quarter due to macro headwinds and temporary suspension of gaming Previous HKD459
licenses approval. Online advertising on the other hand has made good
sequential growth at 15% qoq, and -5% yoy, substantial improvement from 2Q22’s Price Performance
-18% yoy, thanks to fading of impact from advertisers such as online education,
Tencent HSI index
incremental contribution from Video Account, and gradually better macro vs 2Q22. 0%
Fintech and Business Services maintain at 3% yoy growth (vs 1% yoy in 2Q22),
-20%
supported by payment notably in groceries, dining services, and transportation.
-40%
Distributing Meituan shares as dividend
Tencent announced to distribute c.958mn shares of Meituan (c.15.5% of total -60%
shares), which is c.90% of its total Meituan shareholding, lowering Tencent’s stake
-80%
from 17.2% to 1.7%. Based on Meituan’s closing price of HKD166.4 (closing price
as of Nov. 15, 2022), the market value of this distribution is around HKD159bn (or
~6% implied dividend yield). The distribution of Meituan shares as special dividend Source: Bloomberg
is inline with expectation, and follows its previous divestiture strategy for its JD (JD % 1m 6m 12m
US) holding. In our view, the distribution is consistent with Tencent’s previous 700 HK 15.7 (19.1) (40.1)
HSI 7.9 (11.6) (28.8)
string of divestment action and policy direction. We believe Meituan’s cooperation
with Tencent will continue just like with JD. Moreover, we note that c.83% of Sector: Technology, Media & Telecom
Meituan’s traffic is from its own app (per QuestMobile), as such we are not Hang Seng Index (Nov. 16, 2022) 18,256
concerned about negative impacts on Meituan’s fundamentals. MSCI China (Nov. 16, 2022) 60
Key Data
Maintain BUY; with TP revised down from HKD459 to HKD430
52-week range (HKD) 199 - 494
We maintain positive on Tencent’s core competitive advantages and market
Market cap (HKD bn) 2,820.7
position, and looking forward gradual recovery in the medium term. We revised
Avg. daily volume (mn) 37.92
FY22E/23E/24E revenue by -2%/-6%/-6% and Non-IFRS NPM by +0.8ppt/
FY22E Non-IFRS diluted EPS (HKD) 14
+0.9ppt/+0.9ppt, on more toned down growth rate on gaming, but more optimistic
Shareholding Structure
on margin improvement outlook driven by continued cost control measures. We
Naspers Ltd 28.9%
revised down SOTP-TP from HKD459 to HKD430 (Figure 11), mainly impacted by Ma Hua Teng 8.4%
FX. New TP implies 31x/25x FY22/23E P/E. Key risks: 1) Macro/Consumption; 2) No. of shares outstanding (mn) 9,612
Regulation, 3) Competition. Free float 62.7%
Sources: Bloomberg, CMS (HK) research
Financials
RMB mn FY20 FY21 FY22E FY23E FY24E
Related Research
1. Tencent (700 HK) - 2Q22 beat on efficiency
Revenue 482,064 560,118 554,663 612,499 687,048
improvement (BUY) (2022/08/18)
Growth 28% 16% -1% 10% 12% 2. Tencent (700 HK) - Potential divestiture of key
Non-IFRS NP to shareholders 122,742 123,788 112,372 138,818 166,013 investment (BUY) (2022/08/16)
Growth 30% 1% -9% 24% 20% 3. Tencent (700 HK) - Sequentially stable 1Q
despite advertising plunge (BUY) (2022/05/19)
Non-IFRS diluted EPS (HKD) 14.8 15.5 14.0 17.2 20.5 4. Tencent (700 HK) - Shifts to low gear to find
P/E (x) 20.0 19.0 21.0 17.1 14.3 sustainable growth (BUY) (2022/03/24)
ROE 21% 16% 13% 16% 16%
Note: Closing price as of Nov. 16, 2022; Sources: Bloomberg, Company, CMS (HK) estimates

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 Thursday, November 17, 2022

Focus Charts
Figure 1: Revenue by segment Figure 2: Segment gross margin
VAS
FinTech and Business Services, and Others
Online advertising
(RMB bn) Online advertising
other VAS (%) FinTech, Business service and Others
28% Moblie game 60
900 30% 54 52 52
PC game 52 51
750 yoy 25% 50 50
51
16% 20% 47
600 40
12% 46 42
10% 15%
450 30 34 35
10% 32
27 29
300 20
5%
-1%
150 0% 10

0 -5% 0

Sources: Company, CMS (HK) estimates Sources: Company, CMS (HK) estimates

Figure 3: Non-IFRS net profit to shareholders Figure 4: SOTP valuation

HKD 430
Non-IFRS net profit to shareholders, LHS yoy growth, RHS 500 71
(% ) 400 112
(RMB bn) 73
200 40 44
166 300
130
139 30 200
150
123 124 20 100
112
100 10 0

0
50
-10

0 -20

Sources: Company, CMS (HK) estimates Sources: Company, CMS (HK) estimates

Figure 5: P/E range of Tencent Figure 6: P/S range of Tencent

P/E Avg (31.7x) +1SD (38.5x) P/S Avg (7.5x) +1SD (9.2x)
+2SD (45.4x) -1SD (24.8x) -2SD (17.9x) +2SD (10.8x) -1SD (5.9x) -2SD (4.2x)
55.0 13.0

11.0
45.0

9.0
35.0
7.0
25.0
5.0

15.0 3.0

Sources: Company, Bloomberg, CMS (HK) estimates Sources: Company, Bloomberg, CMS (HK) estimates

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 Thursday, November 17, 2022

Figure 7: Tencent’s 3Q22 results

Actual vs
Actual vs CMSe
consensus
2Q22 3Q22 2Q22 3Q22
RMB mn 3Q21 2Q22 3Q22 3Q22E % diff 3Q22E % diff
yoy yoy qoq qoq
Total revenue 142,368 134,034 140,093 -3% -2% -1% 5% 144,254 -3% 141,405 -1%
VAS 75,203 71,683 72,727 0% -3% -1% 1% 76,231 -5%
Online gaming 44,900 42,500 42,900 -1% -4% -3% 1% 46,553 -8%
Domestic 33,600 31,800 31,200 -1% -7% -4% -2% 35,613 -12%
International 11,300 10,700 11,700 -1% 4% 1% 9% 10,940 7%
SNS services 30,303 29,183 29,827 1% -2% 0% 2% 29,678 1%
Online advertising 22,495 18,638 21,443 -18% -5% 4% 15% 19,620 9%
FinTech and Business Services, and
44,670 43,713 45,923 1% 3% -2% 5% 48,403 -5%
Others
Gross profit 62,747 57,867 61,983 -8% -1% 1% 7% 63,098 -2% 60,856 2%
Interest income 1,703 1,945 2,328 19% 37% 12% 20% 3,001 -22%
Other gains, net 22,984 4,420 20,886 -79% -9% -66% 373% 4,328 383%
Selling and marketing expenses (10,435) (7,932) (7,124) -21% -32% -2% -10% (8,655) -18%
General and administrative
(23,862) (26,233) (26,480) 16% 11% -2% 1% (26,333) 1%
expenses
Operating profit 53,137 30,067 51,593 -43% -3% -19% 72% 35,439 46% 35,411 46%
Non-IFRS operating profit 40,828 36,667 40,907 -14% 0% 0% 12% 38,858 5%
Finance costs, net (1,942) (1,809) (1,950) -7% 0% -7% 8% (3,048) -36%
Share of losses of associates and
(5,668) (4,460) (3,697) 16% -35% -29% -17% 0 n.a.
JV
Income before tax 45,527 23,798 45,946 -49% 1% -18% 93% 32,391 42% 31,460 46%
Income tax (5,452) (4,568) (7,104) 25% 30% -13% 56% (5,829) 22%
Minority interest 565 611 (1,101) 40% n.a. 91% n.a. 1,121 n.a.
Net income to shareholders 39,510 18,619 39,943 -56% 1% -20% 115% 25,442 57% 25,191 59%
Non-IFRS net income to
31,751 28,139 32,254 -17% 2% 10% 15% 30,731 5% 30,156 7%
shareholders

OCF 40,900 35,700 41,000 12% 0% 6% 15%

FCF 24,100 22,500 27,600 30% 15% 48% 23%
Total cash 255,825 293,684 293,516
ST debt 26,276 30,535 20,340
LT debt 289,352 305,809 322,544
Net cash (debt) (59,803) (42,660) (49,368)
Total equity 931,376 803,881 818,406
Net cash/equity -6% -5% -6%

Weixin & WeChat MAU (mn) 1,263 1,299 1,309 4% 4% 1% 1%

Fee-based VAS registered
235 235 229 2% -3% -2% -3%
subscriptions (mn)

Margin analysis (%)

Gross margin 44.1 43.2 44.2 -2.2ppt 0.2ppt 1.0ppt 1.1ppt 43.7 0.5ppt 43.0 1.2ppt
VAS 53.0 50.6 51.7 -2.3ppt -1.3ppt 0.2ppt 1.0ppt 50.7 0.9ppt
Online advertising 46.4 40.6 46.3 -8.2ppt -0.1ppt 3.9ppt 5.7ppt 42.5 3.8ppt
FinTech and Business Services, -
27.9 32.0 31.5 1.0ppt 3.6ppt 1.2ppt -0.5ppt 33.2
and Others 1.7ppt
Non-IFRS operating margin 28.7 27.4 29.2 -3.6ppt 0.5ppt 0.4ppt 1.8ppt 26.9 2.3ppt
Non-IFRS net margin 22.3 21.0 23.0 -3.6ppt 0.7ppt 2.1ppt 2.0ppt 21.3 1.7ppt 21.3 1.7ppt
Sources: Company, Bloomberg, CMS (HK) estimates

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 Thursday, November 17, 2022

Segment results and forecast adjustment

VAS: Gaming and SNS

3Q22 results: Online game revenue -4%/+1% yoy/qoq (vs. -1%/-3% yoy/qoq in 2Q22), with domestic game
revenue -7%/-2% yoy/qoq (vs. -1%/-4% yoy/qoq in 2Q22) and international game revenue +4%/+9% yoy/qoq (vs. -
1%/+1% yoy/qoq in 2Q22), dragged by overall macro headwinds as China online gaming market revenue declined
19% yoy and in which mobile gaming revenue -25% yoy in 3Q22（based on CNG data）, as well as decreased
revenue from existing titles such as Honor of Kings (王者荣耀) and PUBG Mobile influenced by the Minor protection
policy which took effect from Sept 2021, while partly offset by incremental revenues from new domestic games
such as League of Legends: Wild Rift (英雄联盟手游), Return to Empire (重返帝国), and League of Legends
Esports Manager (英雄联盟电竞经理), and robust performance from Valorant. SNS services revenue -2%/+2%
yoy/qoq (vs. +1%/flat yoy/qoq in 2Q22), mainly driven by Video Account live streaming services, and music
subscription services.
Outlook: Looking ahead, we expect online game revenue growth to remain lackluster at -2% yoy in 4Q22E due to
macro headwinds and likely temporary suspension of gaming licenses. We also forecast SNS services revenue to
record 3% yoy decline in 4Q22E. Overall we forecast VAS segment revenue to decrease 2% yoy in 4Q22E. We
revised down Tencent’s VAS segment revenue 3%/6%/6% for FY22/23/24E, on more conservative view for gaming
and SNS services businesses.
Online Advertising
3Q22 results: Online advertising revenue -5%/+15% yoy/qoq (vs. -18%/+4% in 2Q22), as social/media ads
revenue -1%/-27% yoy respectively (vs. -17%/-23% yoy in 2Q22), a sequential improvement as 2Q22 was severely
challenged by lockdowns impacting advertisers’ motivation and incremental contribution by Video Account. Mgmt.
indicated that Video Account’s value proposition to advertisers is that it attracts different addressable market as
compared to other major short video platforms. Also currently Mgmt. has been strategically keeping ad load light to
balance against user experience, as such ad inventory is at a shortage condition while their eCPM is at a premium
to Weixin Moments.
Outlook: Looking ahead, we expect online advertising’s recovery to continue, 4Q22E revenue growth to reach 5%
yoy. We forecast social advertising business to have faster revenue growth of 10% yoy in 4Q22E, driven by macro
recovery and Video Account’s monetization. We revised up our FY22E forecast for advertising segment, mainly due
to a more optimistic view on social advertising’s recovery. However, we revised down FY23/24E advertising
revenue assumption by 4%/11%, mainly due to more conservative view on media ad and competition on social
video ad for longer term.
Fintech and Cloud
3Q22 results: FinTech and business segment revenue +3%/+5% yoy/qoq (vs. +1%/-2% yoy/qoq in 2Q22),
reflecting: 1) FinTech revenue growth’s sequential recovery driven by the recovery of commercial payment activities;
2) Cloud business’ scale back with proactively reduced loss-marking contracts and aims to improve profitability.
Outlook: We forecast FinTech and business services segment to maintain 3% yoy in 4Q22E, driven by FinTech
business’ recovery, but partly offset by Cloud business’ weakness. We revised down FY22/23/24E segment
revenue 3%/6%/6%, mainly on more conservative view for Cloud business.
Group margin and profit
3Q22 results: Non-IFRS OP was RMB40.9bn flat/+12% yoy/qoq (vs. -14%/flat yoy/qoq in 2Q22), Non-IFRS OPM
was 29.2%, +0.5ppt yoy, +1.8ppt qoq. Non-IFRS NP was RMB32.3bn +2%/+15% yoy/qoq (vs. -17%/+10% yoy/qoq
in 2Q22), beat Bloomberg consensus 7%. Non-IFRS NPM was 23.0%, +0.7ppt yoy, +2.0ppt yoy. We believe the
margin beat is mainly attributable to company’s effective cost control, such as selling expenses, server cost, and
headcount cost etc.
Outlook: We forecast Non-IFRS NP to grow 6% yoy in 4Q22E, with Non-IFRS NPM +1ppt yoy, a sequential
improvement driven by continued cost control measurements. On Group level, we revised up FY22/23/24E Non-
IFRS NPM 0.8ppt/0.9ppt/0.9ppt.

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Figure 8: Earnings revision summary

Revised Previous Change
RMB mn FY22E FY23E FY24E FY22E FY23E FY24E FY22E FY23E FY24E
Revenue 554,663 612,499 687,048 564,730 649,255 737,479 -1.8% -5.7% -6.8%
VAS 287,314 306,170 339,351 295,529 325,117 360,485 -2.8% -5.8% -5.9%
Online gaming 170,889 181,840 199,786 177,200 192,117 211,189 -3.6% -5.3% -5.4%
Domestic 124,903 130,940 141,873 131,150 138,249 149,869 -4.8% -5.3% -5.3%
International 45,985 50,900 57,913 46,049 53,867 61,320 -0.1% -5.5% -5.6%
SNS services 116,426 124,330 139,564 118,329 133,000 149,297 -1.6% -6.5% -6.5%
Online advertising 80,599 93,592 102,154 77,266 97,141 115,362 4.3% -3.7% -11.4%
FinTech and Business Services, and Others 186,749 212,736 245,543 191,935 226,997 261,632 -2.7% -6.3% -6.1%
Gross profit 241,012 276,074 314,157 243,913 288,721 333,290 -1.2% -4.4% -5.7%
Operating profit 157,263 167,291 200,325 139,561 166,433 206,494 12.7% 0.5% -3.0%
Non-IFRS Operating profit 154,648 179,405 213,185 152,265 182,212 219,909 1.6% -1.5% -3.1%
Net income (to shareholders) 109,048 124,708 151,157 94,105 123,322 155,993 15.9% 1.1% -3.1%
Non-IFRS net income (to shareholders) 112,372 138,818 166,013 109,931 141,115 171,422 2.2% -1.6% -3.2%
Margins & key ratios (%)
Gross margin 43.5 45.1 45.7 43.2 44.5 45.2 0.3ppt 0.6ppt 0.5ppt
VAS 51.1 52.0 52.4 50.7 51.1 51.5 0.5ppt 0.9ppt 0.9ppt
Online advertising 42.5 46.6 50.0 41.4 46.6 50.0 1.1ppt 0.0ppt 0.0ppt
FinTech and Business Services, and Others 32.1 34.4 34.7 32.4 34.1 34.4 -0.4ppt 0.3ppt 0.3ppt
Non-IFRS operating margin 27.9 29.3 31.0 27.0 28.1 29.8 0.9ppt 1.2ppt 1.2ppt
Non-IFRS net margin 20.3 22.7 24.2 19.5 21.7 23.2 0.8ppt 0.9ppt 0.9ppt
yoy (%)
Revenue (1.0) 10.4 12.2 0.8 15.0 13.6 -1.8ppt -4.5ppt -1.4ppt
VAS (1.5) 6.6 10.8 1.4 10.0 10.9 -2.8ppt -3.4ppt 0.0ppt
Mobile game (inclu part in SNS) (2.7) 6.5 12.0 0.2 10.3 12.0 -3.0ppt -3.8ppt 0.0ppt
PC game 1.8 1.7 3.0 3.6 3.0 3.0 -1.8ppt -1.3ppt 0.0ppt
Non-game SNS (0.7) 9.5 12.7 2.3 13.4 12.7 -3.0ppt -4.0ppt 0.0ppt
Online advertising (9.1) 16.1 9.1 (12.9) 25.7 18.8 3.8ppt -9.6ppt -9.6ppt
FinTech and Business Services, and Others 3.8 13.9 15.4 6.7 18.3 15.3 -2.9ppt -4.4ppt 0.2ppt
Non-IFRS net income (to shareholders) (9.2) 23.5 19.6 (11.2) 28.7 21.5 2.0ppt -5.1ppt -1.9ppt
Sources: Company, CMS (HK) estimates

Figure 9: CMS forecasts vs. consensus

CMS
Consensus Diff %
forecasts
RMB mn FY22E FY23E FY24E FY22E FY23E FY24E FY22E FY23E FY24E
Revenue 554,663 612,499 687,048 560,252 627,202 703,373 -1.0% -2.3% -2.3%
Gross Profit 241,012 276,074 314,157 239,099 272,243 308,211 0.8% 1.4% 1.9%
GM (%) 43.5 45.1 45.7 42.7 43.4 43.8 0.8pp 1.7pp 1.9pp
Operating profit 157,263 167,291 200,325 144,334 172,116 191,559 9.0% -2.8% 4.6%
OPM (%) 28.4 27.3 29.2 25.8 27.4 27.2 2.6pp -0.1pp 1.9pp
NP to shareholders 109,048 124,708 151,157 102,558 129,370 148,783 6.3% -3.6% 1.6%
Diluted EPS (RMB) 11.2 12.8 15.5 10.6 13.3 15.3 5.9% -3.7% 1.4%
Non-IFRS NP to shareholders 112,372 138,818 166,013 116,514 139,720 164,500 -3.6% -0.6% 0.9%
Non-IFRS NPM (%) 20.3 22.7 24.2 20.8 22.3 23.4 -0.5pp 0.4pp 0.8pp
Note: Data as of Nov 17, 2022; Sources: Bloomberg, Company, CMS (HK) estimates

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Figure 10: Tencent’s key game pipeline

Licensed Relsease
EN Name CN Name Country/Regions Version Type Latest update
(Y/N) Date(tentative)
Domestic games
The Fingertip Lord 指尖领主 China Mobile Y 2022.7 SLG
Arena Breakout 暗区突围 China Mobile Y 2022.7 FPS
LOL Esports Manager 英雄联盟电竞经理 China Mobile Y 2022.7 SLG
Cat Match 小猫爱消除 China Mobile Y 2022.8 PZL
Doraemon Story of
哆啦 A 梦牧场物语 China Console Y 2022.9 SRPG
Seasons
GRIS 格莉斯的旅程 China Mobile Y 2022.9 AVG
Beats of soul 劲乐幻想 China Mobile Y 4Q22E MUG
Tom Clancy's The
全境封锁 2 China PC Y 2H22E TPS Testing
Division 2
Handmade planet 手工星球 China Mobile Y TBA AVG

Health Defender 健康保卫战 China Mobile Y TBA TDG

Once Upon a Time in
从前有座灵剑山 China Mobile Y TBA RPG Testing
Lingjian Mountain
Undawn 黎明觉醒 China Mobile Y TBA MMORPG Testing
Our Planet 我们的星球 China Mobile N TBA Sandbox Testing overseas
Roco Kingdom 洛克王国手游 China Mobile N TBA MMORPG
Overseas games
V Rising 夜族崛起 Global PC 2022.5 RPG
Chimeraland 妄想山海 Japan Mobile 2022.7 MMORPG
Western and Mobile
Tower of Fantasy 幻塔国际版 2022.8 RPG
Japan and PC
Warhammer40,000： PC and
战锤 40K：暗潮 Global 2022.9 STG
Darktide Console
Avatar: Reckoning 阿凡达:重返潘多拉 Global Mobile 2H22E MMORPG Testing
NIKKE：The Goddess
NIKKE：胜利女神 Japan and Korea Mobile 2H22E RPG Testing
of Victory
Vampire: The 吸血鬼：恶夜猎杀- PC and
Masquerade – Global 2H22E STG Testing
血猎 Console
Bloodhunt
PC and
Metal：Hellsinger 金属：地狱歌手 Global 2H22E FPS Testing
Console
Code: To Jin Yong 代号：致金庸 Global Mobile TBA RPG
Honor of Kings 王者荣耀国际版 Global Mobile TBA MOBA Testing in Mexico
SYNCED: Off-Planet 重生边缘 Global PC TBA TPS Testing
North America
Don't Starve: Newhome 饥荒：新家园 Mobile TBA AVG Testing
and Indonesia
Sources: Company, Qimai, Sohu.com, Sina.com, CMS (HK)

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Figure 11: Tencent’s SOTP valuation under Base, Bear and Bull cases
Valuation Multiple Seg as % of group valuation Valuation
RMB bn Valuation basis
metrics Bear Base Bull Bear Base Bull Bear Base Bull
Core businesses
Online games FY23E EV/EBITDA RMB95.8bn 7.0 12.0 17.0 27.9% 30.2% 33.0% 671 1,150 1,629
SNS (excl. mobile games) FY23E EV/EBITDA RMB39.1bn 5.0 10.0 15.0 8.1% 10.3% 11.9% 195 391 586
Online advertising FY23E EV/EBITDA RMB36.1bn 10.0 18.0 23.0 15.0% 17.1% 16.8% 361 650 831
FinTech and Cloud FY23E EV/EBITDA RMB55.2bn 10.0 18.0 23.0 22.9% 26.1% 25.7% 552 993 1,269
Subtotal (A) 1,779 3,184 4,315
Investees
Listed investees
RMB bn Mkt cap % Stake Stake value Mkt cap % Stake Stake value
Key companies Consumer
Meituan (3690 HK) 911.3 17.2% 156.7 Nio (NIO US) 124.9 17.2% 21.5
Pinduoduo (PDD US) 606.3 15.5% 94.0 Beike Zhaofang (BEKE US) 133.2 6.5% 8.6
Sea (SE US) 234.3 18.6% 43.6 Tongcheng Elong (0780 HK) 33.5 21.8% 7.3
Kuaishou (1024 HK) 206.0 11.8% 24.4 Vipshop (VIPS US) 40.1 9.8% 3.9
JD.com (JD US) 593.0 2.3% 13.6 Yonghui (601933 CH) 28.9 5.3% 1.5
Bilibili (BILI US) 43.9 11.2% 4.9 Miniso Group (MNSO US) 21.9 5.4% 1.2
Gaming Technology
Activision Blizzard (ATVI US) 413.0 5.0% 20.7 China Unicom (0762 HK) 103.5 5.2% 5.4
Netmarble (251270 KS) 23.3 17.5% 4.1 Kingsoft (3888 HK) 32.6 7.8% 2.5
Ubisoft (UBI FP) 24.6 10.0% 2.5 NavInfo (002405 CH) 29.1 4.4% 1.3
Douyu (Doyu US) 2.7 38.0% 1.0 Fujian Boss Software (300525 CH) 13.2 8.3% 1.1
iDreamSky (1119 HK) 5.6 17.5% 1.0 DHC Software (002065 CH) 19.7 4.9% 1.0
Archosaur Games (9990 HK) 3.1 17.0% 0.5 Yeaika (9923 HK) 8.7 3.9% 0.3
Media Weimob (2013 HK) 11.9 3.3% 0.4
Universal Music Group (UMG NA) 280.6 20.0% 56.1 Finance
Snap (SNAP US) 126.8 14.7% 18.7 Futu Securities (FUTU US) 52.5 21.0% 11.1
Spotify (SPOT US) 113.1 8.7% 9.9 Zhongan (6060 HK) 25.6 7.8% 2.0
Warner Music (WMG US) 102.9 1.6% 1.6
Kadokawa (9468 JP) 18.2 6.9% 1.2
Maoyan (1896 HK) 7.7 13.8% 1.1
Zhihu (ZH US) 6.0 12.8% 0.8
Listed holdings, marked to market, subtotal 525
Unlisted holdings carrying value reported by company 340
Discount rate for unlisted investments 50%
Total valuation of investees (B) 695
Net cash, add (C) 1
Minority interest/NCI, minus (D) 71
Total valuation (RMB mn) (A+B+C-D) 2,404 3,809 4,940

No. of ordinary share (mn) 9,733

Value per share (RMB) 247 391 508
HKD/CNY 1.10
Value per share (HKD) 272 430 558

Current traded value multiple Target value implied multiple Bear Base Bull
Non-IFRS NP FY22E PE multiple (x) 20.6 Non-IFRS NP FY22E PE multiple (x) 19.4 30.7 39.9
Forward multiple with total valuation net of investees (x) 15.0 Forward multiple with total valuation net of investees (x) 13.8 25.1 34.3

Non-IFRS NP FY23E PE multiple (x) 16.8 Non-IFRS NP FY23E PE multiple (x) 15.8 25.1 32.5
Forward multiple with total valuation net of investees (x) 12.2 Forward multiple with total valuation net of investees (x) 11.2 20.5 27.9

Sources: Company, Bloomberg, CMS (HK) estimates

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 Thursday, November 17, 2022

Valuation comparison
EV/EBITDA P/S P/OCF
Bloomberg CMS Mkt cap P/E (x) PEG* ROE (%) 2021-2023E CAGR
Company Ccy Price CMS TP (X) (x) (x)
Ticker Rating (USD bn)
FY22E FY23E FY22E FY23E FY22E FY22E FY22E FY22E FY23E Sales EPS EBITDA
Platform
Tencent 700 HK HKD BUY 294.4 430.0 360.5 13.3 10.9 21.0 17.1 3.9 4.3 17.0 13.5 15.7 4.6 5.3 7.5
Alibaba BABA US USD BUY 78.2 142.0 206.9 5.9 5.5 9.5 10.4 n.a. 1.6 10.3 15.2 13.1 8.8 n.a. n.a.
Meituan 3690 HK HKD BUY 162.3 261.0 128.4 n.a. 49.9 n.a. n.a. n.a. 3.8 n.a. n.a. 8.4 24.9 n.a. n.a.
Baidu BIDU US USD NR 94.8 n.a. 32.7 6.2 5.3 12.4 10.6 2.1 1.9 8.7 6.1 7.5 6.0 5.9 23.7
Alphabet GOOGL US USD NR 98.9 n.a. 1,280.3 10.9 9.9 18.1 16.0 1.3 5.4 13.0 25.1 25.7 6.7 13.8 19.2
Facebook FB US USD NR 113.2 n.a. 300.2 5.7 6.0 11.3 13.0 n.a. 2.6 6.5 19.4 17.9 6.5 n.a. n.a.
Naver 035420 KS KRW NR 189,500.0 n.a. 23.3 18.0 16.1 32.6 24.5 n.a. 3.8 21.8 4.0 5.1 16.0 n.a. 3.2
China Mean 7.9 15.5 13.2 12.3 3.0 2.6 11.7 12.5 11.6 10.6 5.6 15.6
Global Mean 11.5 10.7 20.7 17.8 1.3 3.9 13.8 16.2 16.2 9.7 13.8 11.2
Cloud
Chinasoft 354 HK HKD BUY 6.8 10.0 2.6 9.0 9.0 13.2 11.2 1.1 0.8 47.2 10.7 11.5 21.7 11.7 4.5
Tencent 700 HK HKD BUY 294.4 430.0 360.5 13.3 10.9 21.0 17.1 3.9 4.3 17.0 13.5 15.7 4.6 5.3 7.5
Alibaba BABA US USD BUY 78.2 142.0 206.9 5.9 5.5 9.5 10.4 n.a. 1.6 10.3 15.2 13.1 8.8 n.a. n.a.
Kingsoft 3888 HK HKD BUY 26.4 34.0 4.6 10.9 8.7 n.a. n.a. n.a. 4.4 n.a. n.a. 2.1 19.1 n.a 26.5
Kingdee 268 HK HKD NR 15.0 n.a. 6.6 n.a. n.a. n.a. n.a. n.a. 9.4 n.a. n.a. n.a. 22.7 n.a. n.a.
Mingyuan Cloud 909 HK HKD NR 6.3 n.a. 1.6 n.a. n.a. n.a. n.a. n.a. 5.3 n.a. n.a. n.a. 6.0 n.a. n.a.
KC Cloud KC US USD NR 3.2 n.a. 0.8 n.a. n.a. n.a. n.a. n.a. 0.6 n.a. n.a. n.a. 8.9 n.a. n.a.
Microsoft MSFT US USD NR 241.7 n.a. 1,802.0 19.5 17.4 27.3 25.0 n.a. n.a. 22.3 42.9 36.7 n.a. n.a. n.a.
Alphabet GOOGL US USD NR 98.9 n.a. 1,280.3 10.9 9.9 18.1 16.0 1.3 5.4 13.0 25.1 25.7 6.7 13.8 19.2
Amazon AMZN US USD NR 97.1 n.a. 990.8 15.2 12.9 49.0 29.9 n.a. 1.9 19.8 0.0 12.7 15.3 0.8 17.7
Salesforce CRM US USD NR 155.1 n.a. 155.1 35.0 15.8 n.a. 32.6 n.a. 6.5 28.6 0.9 7.9 n.a. n.a. n.a.
Oracle ORCL US USD NR 79.9 n.a. 215.4 22.2 11.8 35.5 16.2 n.a. 5.6 25.0 n.a. n.a. n.a. n.a. n.a.
VMware VMW US USD NR 115.3 n.a. 49.0 17.4 11.4 29.8 17.9 n.a. 4.2 12.4 32.2 n.a. n.a. n.a. n.a.
Dropbox DBX US USD NR 22.4 n.a. 8.1 10.4 10.0 14.3 13.6 1.3 3.5 9.9 n.a. n.a. 11.4 10.9 38.9
China Mean 9.8 8.5 14.6 12.9 2.5 3.8 24.8 13.1 10.6 13.1 8.5 12.8
Global Mean 18.6 12.7 29.0 21.6 1.3 4.5 18.7 20.2 20.8 11.1 8.5 25.3
Social network & pan-entertainment
Tencent 700 HK HKD BUY 294.4 430.0 360.5 13.3 10.9 21.0 17.1 3.9 4.3 17.0 13.5 15.7 4.6 5.3 7.5
Bilibili BILI US USD BUY 15.5 31.0 6.2 n.a. n.a. n.a. n.a. n.a. 1.8 n.a. n.a. n.a. 20.8 n.a. n.a.
China Literature 772 HK HKD HOLD 28.5 68.0 3.7 14.5 11.4 19.9 16.5 1.4 3.2 16.4 6.4 7.9 3.4 14.5 n.a.
Kuaishou 1024 HK HKD NR 52.8 n.a. 29.0 n.a. 45.4 n.a. n.a. n.a. 2.2 n.a. n.a. n.a. 16.3 n.a. n.a.
Tencent Music TME US USD NR 22.6 n.a. 9.9 10.0 8.9 14.9 13.6 n.a. 2.5 20.7 6.8 6.6 n.a. n.a. 17.0
Weibo WB US USD NR 14.8 n.a. 3.5 5.5 4.7 6.7 6.0 n.a. 1.8 10.3 9.0 11.5 1.5 n.a. n.a.
iQiyi IQ US USD NR 2.9 n.a. 2.5 8.8 10.5 n.a. 20.2 n.a. 0.6 n.a. 4.1 8.7 n.a. n.a. n.a.
YY YY US USD NR 29.9 n.a. 2.1 n.a. n.a. 14.9 12.3 0.4 0.9 10.3 1.2 2.6 4.5 41.2 95.9
Momo MOMO US USD NR 5.8 n.a. 1.1 0.3 0.3 4.7 4.4 n.a. 0.6 4.6 13.1 13.0 n.a. n.a. n.a.
Huya HUYA US USD NR 2.8 n.a. 0.7 8.2 11.4 n.a. n.a. n.a. 0.5 n.a. n.a. n.a. n.a. n.a. n.a.
Douyu DOYU US USD NR 1.2 n.a. 0.4 21.2 n.a. n.a. 33.9 n.a. 0.4 n.a. n.a. n.a. n.a. n.a. n.a.
Meta FB US USD NR 113.2 n.a. 300.2 5.7 6.0 11.3 13.0 n.a. 2.6 6.5 19.4 17.9 6.5 n.a. n.a.
Netflix NFLX US USD NR 306.0 n.a. 136.2 23.4 20.9 27.0 25.7 n.a. 4.3 n.a. 24.8 21.1 12.0 4.7 6.7
Snapchat SNAP US USD NR 11.1 n.a. 17.9 n.a. 28.2 n.a. n.a. n.a. 3.9 n.a. n.a. n.a. 15.8 n.a. n.a.
Spotify SPOT US USD NR 82.5 n.a. 15.9 n.a. n.a. n.a. n.a. n.a. 1.3 n.a. n.a. n.a. 15.0 n.a. n.a.
China Mean 10.2 12.9 13.7 15.5 1.9 1.7 13.2 7.7 9.4 10.3 20.3 40.1
Global Mean 14.5 18.4 19.2 19.4 n.a. 3.1 6.5 22.1 19.5 12.3 4.7 6.7

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EV/EBITDA P/OCF
Bloomberg CMS Mkt cap P/E (x) PEG* P/S (x) ROE (%) 2021-2023E CAGR
Company Ccy Price CMS TP (X) (x)
Ticker Rating (USD bn)
FY22E FY23E FY22E FY23E FY22E FY22E FY22E FY22E FY23E Sales EPS EBITDA
Online Gaming
Netease NTES US USD BUY 71.3 120.0 46.8 8.4 7.8 14.2 13.9 2.0 3.3 14.4 21.4 18.8 10.8 7.0 15.4
Tencent 700 HK HKD BUY 294.4 430.0 360.5 13.3 10.9 21.0 17.1 3.9 4.3 17.0 13.5 15.7 4.6 5.3 7.5
Bilibili BILI US USD BUY 15.5 31.0 6.2 n.a. n.a. n.a. n.a. n.a. 1.8 n.a. n.a. n.a. 20.8 n.a. n.a.
Kingsoft 3888 HK HKD BUY 26.4 34.0 4.6 10.9 8.7 n.a. n.a. n.a. 4.4 n.a. n.a. 2.1 19.1 n.a 26.5
iDreamSky 1119 HK HKD BUY 4.4 4.4 0.8 24.6 12.5 n.a. n.a. n.a. 1.9 n.a. n.a. 3.4 15.8 n.a. 64.3
XD 2400 HK HKD NR 5.7 n.a. 0.5 5.9 3.2 11.5 6.4 n.a. 2.7 n.a. 18.0 27.7 50.6 n.a. 30.5
Netdragon 777 HK HKD NR 15.1 n.a. 1.0 2.6 2.3 6.5 5.1 0.2 0.9 3.8 14.6 16.7 16.5 25.9 9.9
CMGE 302 HK HKD NR 1.8 n.a. 0.6 7.5 5.2 9.5 6.9 0.9 1.2 10.1 7.4 10.2 8.1 10.1 7.3
IGG 799 HK HKD NR 2.9 n.a. 0.4 n.a. 15.6 n.a. 14.2 n.a. 0.6 n.a. n.a. 5.3 2.5 n.a. n.a.
Archosaur Game 9990 HK HKD NR 4.2 n.a. 0.4 n.a. 2.7 n.a. 23.2 n.a. 3.1 n.a. n.a. 3.8 52.6 n.a. n.a.
SEA SE US USD NR 58.8 n.a. 33.0 n.a. n.a. n.a. n.a. n.a. 2.8 n.a. n.a. n.a. 26.2 n.a. n.a.
Nintendo 7974 JP JPY NR 5,815.0 n.a. 54.2 9.0 10.2 14.1 16.3 n.a. 4.0 23.3 27.0 21.6 n.a. n.a. n.a.
Activision Blizzard ATVI US USD NR 74.4 n.a. 58.2 17.5 13.1 25.1 19.5 4.3 7.3 25.2 12.0 13.2 8.8 5.8 7.0
Electronic Arts EA US USD NR 129.3 n.a. 35.7 23.4 13.2 n.a. 17.7 n.a. 5.7 20.9 11.5 20.2 n.a. n.a. n.a.
Take-Two TTWO US USD NR 100.8 n.a. 16.9 26.8 20.0 44.9 25.2 n.a. 5.4 n.a. n.a. 3.3 n.a. n.a. n.a.
Nexon 3659 JP JPY NR 2,708.0 n.a. 16.8 15.1 11.8 21.6 20.9 n.a. 6.7 22.1 12.9 12.7 13.0 n.a. 14.5
Ncsoft 036570 KS KRW NR 461,000.0 n.a. 7.6 12.0 11.4 19.8 19.5 2.2 3.9 15.1 15.7 14.7 5.3 9.1 20.9
Zynga ZNGA US USD NR 8.2 n.a. 9.3 16.4 14.9 26.0 20.6 n.a. 3.3 15.5 n.a. n.a. 8.4 n.a. 54.2
Netmarble 251270 KS KRW NR 50,900.0 n.a. 3.3 32.5 16.4 n.a. 29.3 n.a. 1.6 (17.8) n.a. 2.6 5.9 n.a. 2.5
China Mean 10.2 7.7 12.9 12.7 1.8 2.5 12.0 16.1 12.2 19.3 11.1 22.1
Global Mean 19.1 13.9 25.3 21.1 3.2 4.5 14.9 15.8 12.6 11.3 7.4 19.8
E-commerce
JD.com JD US USD BUY 53.5 72.0 83.5 14.9 11.5 24.8 18.0 0.7 0.5 20.1 10.5 13.2 17.2 34.1 45.3
Alibaba BABA US USD BUY 78.2 142.0 206.9 5.9 5.5 9.5 10.4 n.a. 1.6 10.3 15.2 13.1 8.8 n.a. n.a.
Meituan 3690 HK HKD BUY 162.3 261.0 128.4 n.a. 49.9 n.a. n.a. n.a. 3.8 n.a. n.a. 8.4 24.9 n.a. n.a.
Pinduoduo PDD US USD NR 67.6 n.a. 85.4 17.8 14.2 21.0 16.8 0.4 4.9 15.0 27.5 25.8 27.4 54.8 99.8
Beike BEKE US USD NR 14.8 n.a. 18.8 41.6 16.6 n.a. 26.4 2.3 2.1 n.a. 2.0 6.2 n.a. 38.7 14.2
Vipshop VIPS US USD NR 8.9 n.a. 5.7 3.3 3.1 6.7 6.4 n.a. 0.4 5.9 14.0 12.8 n.a. n.a. 0.4
Baozun BZUN US USD NR 4.2 n.a. 0.2 6.3 4.3 8.6 4.0 0.2 0.2 5.5 1.1 5.4 5.2 45.2 9.2
Amazon AMZN US USD NR 97.1 n.a. 990.8 15.2 12.9 49.0 29.9 n.a. 1.9 19.8 0.0 12.7 15.3 0.8 17.7
eBay EBAY US USD NR 45.5 n.a. 24.7 8.5 8.7 11.7 11.4 1.6 2.6 8.8 31.5 47.1 0.6 7.5 n.a.
China Mean 15.0 14.6 16.0 14.4 0.9 1.8 12.9 11.6 12.3 16.8 41.4 35.7
Global Mean 11.9 10.8 30.3 20.6 1.6 2.3 14.3 15.8 29.9 7.9 4.2 17.7
Vertical
trip.com TCOM US USD NR 28.8 n.a. 18.5 n.a. 23.3 n.a. 19.9 n.a. 6.6 34.7 0.4 3.9 21.7 n.a. n.a.
Autohome ATHM US USD NR 29.3 n.a. 3.7 2.6 2.2 12.9 12.1 n.a. 3.8 12.2 8.1 8.3 0.6 n.a. n.a.
Tongcheng-Elong 780 HK HKD NR 16.6 n.a. 4.7 27.3 14.1 40.8 21.8 1.1 4.9 34.2 3.8 7.6 9.9 35.6 17.0
Expedia EXPE US USD NR 97.5 n.a. 15.2 6.7 5.8 13.9 10.4 n.a. 1.3 4.0 37.0 40.2 29.2 n.a. 67.8
China Mean 12.2 11.4 22.5 16.1 1.1 4.1 21.3 12.3 15.0 15.4 35.6 42.4
Note: Closing prices as of Nov. 16, 2022 (All markets); For future estimates of NR Co.s, BBG consensus used; Sources: BBG, Company, CMS (HK) estimates

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 Thursday, November 17, 2022

Financial Summary
Profit & Loss Balance Sheet
RMB mn FY20 FY21 FY22E FY23E FY24E RMB mn FY20 FY21 FY22E FY23E FY24E
PPE 59,843 61,914 56,137 59,528 61,052
Revenue 482,064 560,118 554,663 612,499 687,048
Intangible assets 159,437 171,376 184,713 193,784 198,539
Cost of revenue (260,532) (314,174) (313,650) (336,424) (372,891)
Cash and cash equivalents 152,798 167,966 246,970 365,356 545,825
Gross profit 221,532 245,944 241,012 276,074 314,157
Term deposits 100,168 103,304 104,337 105,380 106,434
Interest income 6,957 6,650 9,681 13,125 18,175 Investment in associates & JV 305,258 323,188 316,591 334,192 351,089
Other gains, net 57,131 149,467 42,791 18,375 20,611 Available-for-sale investments 0 0 0 0 0
Selling and marketing (33,758) (40,594) (31,818) (36,750) (41,223) Financial assets at fair value 385,628 453,014 390,102 402,600 415,653

G&A (67,625) (89,847) (104,404) (103,534) (111,396)

Others 170,293 331,602 241,891 254,500 270,751
Total assets 1,333,425 1,612,364 1,540,742 1,715,339 1,949,343
Operating profit 184,237 271,620 157,263 167,291 200,325

Finance costs, net (7,887) (7,114) (9,816) (10,741) (11,538)

Accounts payable 94,030 109,470 106,641 114,384 126,783
Share of losses of associates
3,672 (16,444) (14,437) 0 0 Other payables and accrued
and JV 54,308 60,582 60,582 60,582 60,582
Liabilities
Profit before income tax 180,022 248,062 133,009 156,550 188,788
Bank borrowings 126,387 155,939 171,357 180,140 191,715
Income tax expense (19,897) (20,252) (23,021) (26,911) (31,978) Notes payable 122,057 145,590 181,166 209,551 238,688
Minority interests 278 2,988 940 4,931 5,653 Others 158,600 264,090 161,348 170,619 183,577
Net profit to shareholders 159,847 224,822 109,048 124,708 151,157 Total liabilities 555,382 735,671 681,094 735,276 801,345

Non-IFRS operating profit 149,404 159,539 154,648 179,405 213,185

Share capital 0 0 0 0 0
Non-IFRS NP to shareholders 122,742 123,788 112,372 138,818 166,013
Share premium 48,793 67,330 92,478 116,978 144,459
Treasury shares 0 0 0 0 0
Financial Ratios Shares held for share award
-4,412 -4,843 -4,843 -4,843 -4,843
scheme
FY20 FY21 FY22E FY23E FY24E
Other reserves 121,139 73,901 -54,303 -54,303 -54,303
yoy growth Retained earnings 538,464 669,911 754,982 845,967 980,767
Revenue 28% 16% -1% 10% 12% Total Shareholders' Equity 703,984 806,299 788,314 903,798 1,066,080

Operating profit 55% 47% -42% 6% 20% Non-controlling interests 74,059 70,394 71,334 76,265 81,918
Total Equity 778,043 876,693 859,648 980,063 1,147,998
Non-IFRS net profit 30% 1% -9% 24% 20%
Profitability
Cashflow
ROE 21% 16% 13% 16% 16%
RMB mn FY20 FY21 FY22E FY23E FY24E
Gross margin 46% 44% 43% 45% 46%
CF from operating activities 194,119 175,186 209,953 224,907 271,681
Non-IFRS operating margin 31% 28% 28% 29% 31% Net profit 160,125 227,810 109,988 129,639 156,810
Non-IFRS net margin 25% 22% 20% 23% 24% D&A 50,774 57,670 54,019 66,959 82,718
Per share (RMB) Share-based compensation 12,634 21,625 25,148 24,500 27,482
Impairment provision for
Diluted EPS 16.5 23.2 11.2 12.8 15.5 6,642 16,315 15,829 6,200 6,552
associates
Non-IFRS basic EPS 12.9 13.0 11.8 14.6 17.4 Working capital chg 27,423 891 (11,426) 611 5,120
Non-IFRS diluted EPS 12.7 12.8 11.5 14.3 17.1 Others (63,479) (149,125) 16,396 (3,001) (7,001)

Non-IFRS diluted EPS (HKD) 14.8 15.5 14.0 17.2 20.5

CF from investing activities (181,955) (178,549) (29,762) (109,966) (115,566)
CAPEX & purchase of intangible
BVPS 74.7 85.5 83.4 95.7 112.8 (61,252) (60,461) (77,653) (85,750) (96,187)
assets
DPS 1.4 1.4 3.6 1.7 2.0 Net addition in term deposits (26,992) (573) (1,033) (1,043) (1,054)
Valuation Other investments (93,711) (117,515) 48,924 (23,173) (18,326)

EV/EBITDA (x) 13.9 12.6 13.3 10.9 9.1 CF from financing activities 13,647 21,620 (101,187) 3,445 24,355
Borrowings 44,490 59,790 50,994 37,168 40,712
P/E (x) 20.0 19.0 21.0 17.1 14.3
Dividends (10,339) (12,503) (23,977) (33,723) (16,357)
P/B (x) 3.3 2.8 2.9 2.6 2.2
Others (20,504) (25,667) (128,204) 0 0
Dividend yield (%) 0.54 0.54 1.46 0.71 0.81
Exchange rate changes (6,004) (3,089) 0 0 0
Note: Closing price as of Nov. 16, 2022 Net cash flow 19,807 15,168 79,004 118,386 180,469
Sources: Bloomberg, Company, CMS (HK) estimates

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 Thursday, November 17, 2022

Investment Ratings
Industry Rating Definition
OVERWEIGHT Expect sector to outperform the market over the next 12 months
NEUTRAL Expect sector to perform in-line with the market over the next 12 months
UNDERWEIGHT Expect sector to underperform the market over the next 12 months

Company Rating Definition

BUY Expect stock to generate 10%+ return over the next 12 months
HOLD Expect stock to generate +10% to -10% over the next 12 months
SELL Expect stock to generate loss of 10%+ over the next 12 months

Analyst Disclosure

The analysts primarily responsible for the preparation of all or part of the research report contained herein hereby
certify that: (i) the views expressed in this research report accurately reflect the personal views of each such
analyst about the subject securities and issuers; and (ii) no part of the analyst’s compensation was, is, or will be
directly or indirectly, related to the specific recommendations or views expressed in this research report.

Regulatory Disclosure

Please refer to the important disclosures on our website http://www.newone.com.hk/cmshk/gb/disclosure.html

or http://www.cmschina.com.hk/Research/Disclosure.

Disclaimer

This document is prepared by China Merchants Securities (HK) Co Limited. The information contained herein has
been obtained from or is based on sources believed to be reliable. China Merchant Securities (HK) Co Limited, its
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This document has been prepared without regard to the individual financial circumstances and investment

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 Thursday, November 17, 2022

objectives of the persons who receive it. Use of any information herein shall be at the sole discretion and risk of the
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