Equity Research·Company Research·Other Internet Service Kanzhun Limited (BZ) 2024Q1 review: revenue and profit beat, with [Table_Author] 27 May 2024 continued growth in paid enterprise customers Research Analyst Buy (Maintain) Ruibin Chen (852) 3982 3212 Forecast & Valuation 2023A 2024E 2025E 2026E chenrobin@dwzq.com.hk Revenue (RMB mn) 5,952 7,788 9,625 11,523 Growth (YoY %) 32% 31% 24% 20% P[Traicbel eP_ePrifcoQrmuoatnec] e Non-GAAP Net profit (RMB mn) 2,156 2,766 3,419 4,052 Growth (YoY %) 170% 28% 24% 1 ...

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company's performance in Q1 2024 was slightly below expectations due to one-time opening costs associated with the Versace hotel, with net revenue reaching HKD 6.92 billion, aligning closely with Bloomberg's consensus estimate of HKD 6.85 billion, and recovering to 68.2% of Q1 2019 levels [2][1] - The company's adjusted EBITDA for Q1 2024 was HKD 860 million, recovering to 80.4% of the same period in 2019, but slightly below the consensus estimate of HKD 910 million due to the one-time opening cost of HKD 58 million for the Versace hotel [2][1] - The "One SJM" strategy has proven effective, with total gaming revenue in Q1 2024 reaching HKD 6.89 billion, recovering to 66.2% of Q1 2019 levels [2][1] - The company aims to maintain a market share target of 5% for the Grand Lisboa, with current market share at 2.0% in Q1 2024, up 0.3 percentage points from the previous quarter [2][1] - Daily operating expenses for Q1 2024 averaged HKD 20.4 million, a 5.5% increase from the previous quarter, primarily due to the one-time opening costs and the addition of 20-30 marketing personnel [2][1] Financial Forecasts and Valuation - The revenue forecast for 2024-2026 has been revised upwards to HKD 29.14 billion, HKD 30.68 billion, and HKD 32.04 billion respectively, with adjusted EBITDA forecasts of HKD 4.05 billion, HKD 4.67 billion, and HKD 4.97 billion [2][1] - The current stock price corresponds to EV/EBITDA multiples of 11.3, 9.8, and 9.3 for 2024, 2025, and 2026 respectively, with a target price set at HKD 3.6 [2][1]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company's performance in Q1 2024 was slightly below expectations, primarily due to one-time opening costs associated with the Versace hotel. The net revenue for Q1 2024 was HKD 6.92 billion, aligning closely with Bloomberg's consensus estimate of HKD 6.85 billion, and recovering to 68.2% of Q1 2019 levels. Gaming and non-gaming net revenues were HKD 6.46 billion and HKD 460 million, respectively, recovering to 76.3% and 250.5% of the same period in 2019 [1] - The "One SJM" strategy has proven effective, with gaming revenue accelerating recovery. Total gaming revenue for Q1 2024 reached HKD 6.89 billion, recovering to 66.2% of Q1 2019 levels. VIP and mass market gaming revenues were HKD 650 million and HKD 6.25 billion, respectively, recovering to 16.4% and 96.4% of the same period in 2019 [1] - The company maintains a market share target of 5% for the Grand Lisboa, with a current market share of 2.0% in Q1 2024, which increased to 2.2% in April 2024. The company plans to enhance accessibility and increase marketing personnel to achieve this target [1] Summary by Sections Financial Performance - For 2023A, total revenue was HKD 21,623.2 million, with projections of HKD 29,138.4 million for 2024E, HKD 30,675.9 million for 2025E, and HKD 32,042.5 million for 2026E. The year-on-year growth rates are 223.8% for 2023A and 34.8% for 2024E [2] - Adjusted EBITDA for 2023A was HKD 1,928.0 million, with projections of HKD 4,050.0 million for 2024E, HKD 4,672.2 million for 2025E, and HKD 4,969.0 million for 2026E, reflecting a year-on-year growth of 110.1% in 2024E [2] - The diluted earnings per share for 2023A was -0.28 HKD, with projections of 0.07 HKD for 2024E, 0.19 HKD for 2025E, and 0.26 HKD for 2026E [2] Operational Insights - The average daily operating expenses for Q1 2024 were approximately HKD 20.4 million, a 5.5% increase from the previous quarter, mainly due to one-time opening costs and the addition of 20-30 marketing personnel [1] - The company expects that once the Grand Lisboa achieves its target market share, the average daily operating expenses will approach HKD 8 million [1] Valuation Metrics - The current stock price corresponds to an EV/Adjusted EBITDA of 11.34 for 2024E, 9.83 for 2025E, and 9.25 for 2026E. The target price is set at HKD 3.6, maintaining a "Buy" rating [1]

Investment Rating - The report maintains a "Buy" rating for Wynn Macau (1128.HK) [1] Core Views - The company's performance in Q1 2024 exceeded expectations, with strong recovery in mass gaming revenue [1][3] - The management indicates that the momentum in mass gaming business remains robust since Q2 2024 [3] Financial Performance Summary - For Q1 2024, the company achieved gaming revenue of $1 billion, recovering to 68.9% of the level from Q1 2019 [2] - VIP and mass gaming revenue reached $180 million and $820 million respectively, recovering to 23.2% and 122.6% of Q1 2019 levels [2] - The adjusted property EBITDAR for Q1 2024 was $340 million, exceeding Bloomberg consensus by approximately 10% [3] - The adjusted property EBITDAR margin improved from 30.9% in Q1 2019 to 34.0% in Q1 2024 [3] Earnings Forecast and Valuation - The revenue forecast for 2024-2026 has been raised to HKD 31.08 billion, HKD 33.88 billion, and HKD 35.84 billion respectively [3] - The adjusted property EBITDAR forecast for the same period is updated to HKD 9.68 billion, HKD 10.67 billion, and HKD 11.32 billion [3] - The current stock price corresponds to EV/Adjusted Property EBITDAR multiples of 8.6, 7.8, and 7.3 for 2024-2026 [3] Operational Insights - The average daily operating cost in Q1 2024 was $2.63 million, down approximately 17.8% from $3.20 million in Q1 2019 [3] - The company expects average daily operating costs to fluctuate around $2.6 million in the future [3] - Capital expenditures for 2024-2025 are projected to be between $350 million and $500 million [3]

Investment Rating - The report maintains a "Buy" rating for the company [1] Core Views - The company's total gaming revenue for Q1 2024 reached USD 1.19 billion, recovering to 74.7% of the level seen in Q1 2019. The Macau properties generated total gaming revenue of USD 1.01 billion, recovering to 72.1% of the same period in 2019 [2][3] - The company has actively adjusted its customer acquisition strategy by integrating the sales teams of its two Macau properties, which has led to improved performance. In March 2024, both properties achieved record high betting amounts, and the company's market share continued to increase in April 2024 [2] - The company plans to introduce RFID gaming tables in Q2 2024, with full implementation expected by Q2 2025, which is anticipated to boost overall gaming revenue [2] Financial Performance and Forecast - For Q1 2024, the company reported net revenue of USD 1.11 billion, aligning with Bloomberg consensus estimates, and recovering to 81.5% of Q1 2019 levels. Gaming and non-gaming net revenues were USD 0.91 billion and USD 0.20 billion, respectively [3] - The adjusted property EBITDA for Q1 2024 was USD 0.30 billion, also meeting expectations, and recovering to 72.2% of the same period in 2019. After standardizing for win rates, the adjusted property EBITDA increased to USD 0.33 billion, recovering to 87.3% of Q1 2019 levels [3] - The company expects daily operating expenses to rise to approximately USD 3 million in 2024, with capital expenditures projected at USD 420 million, including USD 50 million for a new project in Sri Lanka [3] Earnings Forecast and Valuation - The company’s net income forecasts for 2024-2026 have been adjusted to HKD 37.94 billion, HKD 40.87 billion, and HKD 42.74 billion, respectively. The adjusted property EBITDA forecasts are HKD 10.58 billion, HKD 12.26 billion, and HKD 13.06 billion for the same period [3] - The current stock price corresponds to EV/EBITDA multiples of 5.9, 5.1, and 4.8 for 2024, 2025, and 2026, respectively. The target price is set at HKD 7.6, maintaining the "Buy" rating [3]

Investment Rating - The report maintains a "Buy" rating for MGM China (2282.HK) [1] Core Views - The company's total gaming revenue for Q1 2024 reached HKD 9.45 billion, recovering to 140.8% of the same period in 2019, with VIP and mass market revenues at HKD 1.50 billion and HKD 7.95 billion respectively, recovering to 55.8% and 197.6% of 2019 levels [2][3] - The company's overall market share increased from 9.1% in Q1 2019 to 17.0% in Q1 2024, with a slight month-on-month increase in market share noted in March and April 2024 [2] - The adjusted property EBITDA for Q1 2024 was HKD 2.51 billion, exceeding Bloomberg consensus estimates by approximately 14%, and the EBITDA margin improved to 30.3% [3] Summary by Sections Revenue and Profit Forecast - Total revenue for 2023 is projected at HKD 24.68 billion, with a significant increase to HKD 33.40 billion in 2024, representing a year-on-year growth of 369% [2] - The adjusted property EBITDA is expected to rise from HKD 7.24 billion in 2023 to HKD 9.85 billion in 2024, reflecting a 117% increase [2] - The report forecasts earnings per share to increase from HKD 0.69 in 2023 to HKD 1.50 in 2024 [2] Business Expansion - MGM China is focusing on expanding its non-gaming business, including the addition of villas and suites in Macau and new dining services that have been well-received by consumers [3] - The company is collaborating with renowned director Zhang Yimou to create a resident show titled "MGM 2049" and is constructing a world-class museum in Macau to enhance cultural experiences for consumers [3] Market Position and Strategy - The management believes that the introduction of smart gaming tables by other operators will not significantly impact MGM China's competitive advantage, as the company has been utilizing smart tables since 2016 and has accumulated substantial consumer data [3] - The report projects that the company's adjusted property EBITDA margin will remain high, between 27% and 30%, throughout 2024 [3]

Investment Rating - The report maintains a "Buy" rating for Sands China Limited with a target price of HKD 30.7 [4] Core Views - Sands China achieved total gaming revenue of USD 1.71 billion in Q1 2024, recovering to 73.2% of the same period in 2019 [2] - The company's net revenue for Q1 2024 was USD 1.81 billion, slightly below Bloomberg consensus of USD 1.86 billion, with a quarter-on-quarter decline of 2.8% [3] - Adjusted property EBITDA for Q1 2024 was USD 610 million, also below Bloomberg consensus of USD 640 million, with a quarter-on-quarter decline of 6.7% [3] - The report anticipates that the renovation of the Londoner Phase II and the Galaxy Macau will impact the company's performance in 2024 [3] Financial Forecasts - The projected total revenue for Sands China is USD 7.95 billion in 2024, USD 8.52 billion in 2025, and USD 9.02 billion in 2026, reflecting year-on-year growth rates of 307.1%, 21.7%, and 7.1% respectively [2][4] - Adjusted property EBITDA is expected to be USD 2.77 billion in 2024, USD 3.03 billion in 2025, and USD 3.30 billion in 2026 [4] - The earnings per share (EPS) forecast is USD 0.18 for 2024, USD 0.22 for 2025, and USD 0.26 for 2026 [4] Market Data - The closing price of Sands China shares is HKD 18.88, with a one-year low of HKD 18.54 and a high of HKD 31.45 [5] - The company has a market capitalization of HKD 152.8 billion [5]

Investment Rating - The report assigns an "Accumulate" rating to the company, indicating a positive outlook for investment [44]. Core Insights - The company is a leading global digital MRO distributor, expected to leverage its first-mover advantage and scale effects to continuously capture market share [44][39]. - The MRO industry has a vast market potential, with the company positioned to address traditional procurement pain points through its digital procurement model [44][39]. - The competitive landscape of the MRO market is fragmented, allowing the company to benefit from its scale and operational efficiencies [44][39]. Summary by Sections 1. Digital MRO Procurement - Digital MRO procurement effectively helps clients reduce costs and improve efficiency, with the potential to save approximately 15-20% on procurement costs and 70% of procurement time [44][39]. - The global MRO market is projected to grow at a CAGR of approximately 2.45% from 2023 to 2032, indicating significant market opportunities [44][39]. 2. Company Overview - The company is recognized as a global leader in full-category digital MRO distribution, with a strong balance sheet and robust growth in performance and profitability [44][39]. - The company has over 30 million MRO products and serves more than 4.5 million customers globally, showcasing its extensive reach and product variety [21][39]. 3. Competitive Landscape - The MRO market is highly fragmented, with the company holding only about 3% of the global market share, indicating room for growth [44][39]. - The company has a strong competitive edge in product variety, quality, pricing, and logistics, which enhances customer retention and attracts new clients [21][39]. 4. Financial Forecast and Valuation - The company is expected to achieve revenue growth of 4.4% in 2024, 6.1% in 2025, and 7.0% in 2026, reaching revenues of $17,194 million, $18,239 million, and $19,539 million respectively [33][44]. - The projected net profit for the same years is $1,870 million, $2,050 million, and $2,260 million, with corresponding P/E ratios of 26.7, 24.3, and 22.1 [33][44].

Investment Rating - The report maintains a "Buy" rating for China Aircraft Leasing (1848.HK) with a target price of HKD 4.3 [2][5] Core Views - The company's revenue for 2023 met expectations, achieving HKD 4.76 billion, a year-on-year increase of 14.2%, driven by an increase in the number of aircraft leased from 97 to 113 [1][2] - The net profit attributable to shareholders for 2023 was HKD 28 million, significantly lower than the expected HKD 440 million, primarily due to higher interest expenses and a provision for impairment on shareholder loans [2] - The aircraft market is expected to experience a supply-demand imbalance, leading to an increase in aircraft values and rental yields, with the company holding a significant number of popular narrow-body aircraft [2][5] Financial Projections - Revenue projections for 2024-2026 are adjusted to HKD 5.15 billion, HKD 5.33 billion, and HKD 5.47 billion respectively, with net profit attributable to shareholders forecasted at HKD 230 million, HKD 500 million, and HKD 800 million [2][5] - The company's price-to-book (P/B) ratios for 2024-2026 are projected to be 0.57, 0.52, and 0.47 respectively [2][5] Market Position - The company has a total of 113 Airbus orders, with nearly half already leased out, indicating a strong market position and demand for its aircraft [2][5] - The report highlights that over 90% of the company's aircraft are popular narrow-body models, which are expected to see continued demand in the market [2][5]

Investment Rating - The report initiates coverage on Beijing UBOX Online Technology with a "Buy" rating [2] Core Investment Thesis - Beijing UBOX is a leading operator of vending machines in China, with a network of 61,888 UBOX vending machine locations across 157 cities and 28 provinces as of June 30, 2023 [3] - The company's revenue for 2020-2022 was RMB19.0/26.8/25.2bn, with a CAGR of 15% from 2020 to 2022 [3] - The penetration rate of vending machines in China is expected to increase from 8.8% in 2022 to 15.6% in 2027, with the retail market size projected to grow from RMB289bn in 2022 to RMB739bn in 2027, a five-year CAGR of 20.7% [3] - The company is expanding rapidly in high-tier cities, with the number of machines in first-tier/new first-tier/second-tier cities expected to increase to 27,000/29,000/28,000 respectively by the end of 2024 [3] - Revenue for 2023-2025 is forecasted to be RMB27.6/40.9/49.9bn, with net profit attributable to shareholders expected to be RMB-1.5/0.3/1.8bn [3] Financial Forecasts & Valuation - Revenue for 2023-2025 is projected to be RMB2,761.85/4,090.24/4,994.10mn, with YoY growth of 9.63%/48.10%/22.10% [3] - Net profit for 2023-2025 is forecasted to be RMB-150.82/26.15/184.19mn, with YoY growth of 46.99%/117.33%/604.47% [3] - EPS for 2023-2025 is expected to be RMB-0.19/0.03/0.24 [3] - P/E ratios for 2023-2025 are projected at -68.44/394.80/56.04 [3] Market Data & Company Overview - The company's closing price as of the report date is HKD14.60, with a 52-week range of HKD11.84-22.80 [5] - Market capitalization is HKD11,385.59mn, with a P/B ratio of 9.48 [5] - The company has a total of 61,888 vending machine locations, with 87.3% concentrated in first-tier, new first-tier, and second-tier cities [3] - The company's revenue for 2020-2022 was RMB19.0/26.8/25.2bn, with significant fluctuations due to the pandemic and changes in consumer demand [3] Industry Analysis - The vending machine market in China is expected to grow significantly, with the retail market size projected to increase from RMB289bn in 2022 to RMB739bn in 2027, a five-year CAGR of 20.7% [3] - The market is currently fragmented, with the top five participants holding a 17.0% market share based on total commodity turnover in 2022 [3] - Leading companies are expected to achieve growth surpassing the industry through mergers and acquisitions [3] Business Model & Expansion Strategy - The company operates a comprehensive service platform for unmanned retail, leveraging digitalization and operational capabilities to create value for various participants [3] - The company is focusing on expanding in high-tier cities, with plans to increase the number of machines in first-tier/new first-tier/second-tier cities to 27,000/29,000/28,000 by the end of 2024 [3] - The company is also targeting third-tier and below cities through cooperation with operators and platform empowerment, with the number of machines expected to increase from 7,881 in June 2023 to 16,000 by the end of 2024 [3]