Kanzhun and JOYY are preferred picks; watch for earnings estimate upgrades and AI, gaming, and shareholder-return catalysts
AI summary card
Kanzhun and JOYY are preferred picks; watch for earnings estimate upgrades and AI, gaming, and shareholder-return catalysts
JPMorgan views Kanzhun's recruitment market share expansion and JOYY's strong BIGO Ads growth as the most attractive opportunities; NetEase, Kuaishou, Bilibili, and KE Holdings still need key catalysts to deliver share price outperformance.
- Kanzhun is expected to deliver 15% year-over-year revenue growth in 2Q26 and trades at 12x 2026E P/E; blue-collar business expansion and World Cup marketing could drive upward revisions to second-half revenue estimates.
- JOYY's BIGO Ads is expected to grow 48% year over year in 2Q26, with 39% projected revenue CAGR in 2027–2028, alongside potential annual shareholder returns of approximately 15%.
- NetEase needs another blockbuster game for near-term share price outperformance; Sea of Remnants may perform below investor expectations, while the August 21 launch of the FWJ Freemium mobile game is a near-term catalyst.
- Kuaishou's core advertising and live-streaming businesses face macroeconomic and competitive pressure, but the market's implied valuation for Kling AI is low; ARR growth, a rebound in core businesses, or substantial shareholder returns are key.
- Bilibili has strong prospects for earnings growth and margin expansion, but weak consumption, live-streaming regulation, and a lack of near-term gaming catalysts continue to weigh on valuation.
- KE Holdings trades at a premium valuation relative to China Internet peers; subsequent share price performance will depend on whether real estate sales transaction volumes continue to recover after 2Q.
Report interpretation
Overview
This report previews 2Q26 earnings for China digital entertainment and online vertical Internet companies, covering Kanzhun, NetEase, Kuaishou, JOYY, Bilibili, and KE Holdings. The core view is that, beyond earnings and valuation, near-term excess returns will be determined by catalysts including recruitment market share, advertising growth, generative AI commercialization, new game launches, shareholder returns, and recovery in real estate transactions.
Core views
Kanzhun remains a preferred pick, benefiting from gains in white-collar and blue-collar recruitment market share, differentiated data and algorithm capabilities, and long-term AI monetization potential. JOYY is also a preferred pick, supported by strong BIGO Ads growth in user acquisition, e-commerce, and gaming verticals, together with ongoing shareholder returns. NetEase retains positive long-term prospects for global gaming expansion but needs another blockbuster; Kuaishou has an attractive valuation but requires validation through Kling AI ARR and core business recovery; Bilibili's profit growth, advertising, and gaming cycle warrant attention; and KE Holdings needs continued improvement in real estate transactions to support further upside.
Analysis framework
The assessment is based on the variance between 2Q26 revenue and adjusted net profit forecasts versus market consensus, combined with valuation multiples, segment growth, industry competition, investor feedback, product and marketing catalysts, and medium- to long-term profitability.
Methodology notes
Compare institutional forecasts with market consensus
Potential upside or downside earnings risks are identified by comparing revenue and adjusted net profit forecasts with consensus expectations.
Match earnings multiples with growth prospects
The report compares 2026E P/E multiples with subsequent operating profit or net profit growth to assess valuation attractiveness.
Identify triggers for near-term re-rating
The analysis focuses on earnings guidance, new product or game launches, AI commercialization, marketing activities, shareholder returns, and changes in industry demand.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- Kanzhun Ltd ADR (BZ) / Kanzhun Ltd-H (2076.HK)Preferred pick, OW
- Strengths
- Rising market share in white-collar and blue-collar recruitment; differentiated data and algorithm capabilities; AI has long-term revenue-driver potential; 2Q and second-half revenue may exceed expectations.
- Weaknesses
- The share price has risen since early July, and mobile alternative data cannot fully reflect directly contracted enterprise revenue.
- Comparison
- Trading at 12x 2026E P/E, which is relatively attractive versus approximately 15% operating profit growth in 2027–2028.
- Risks
- World Cup marketing effectiveness falls short of expectations, blue-collar business expansion slows, or recruitment demand weakens.
- JOYY Inc (JOYY)Preferred pick, OW
- Strengths
- Strong BIGO Ads growth in user acquisition, e-commerce, and gaming advertising; strong data and algorithm capabilities; net cash, operating cash flow, and interest income support shareholder returns.
- Weaknesses
- Adjusted net profit forecasts are below market consensus; the share price has materially outperformed KWEB.
- Comparison
- Trading at 14x 2026E P/E; the report forecasts a 39% revenue CAGR for BIGO Ads in 2027–2028.
- Risks
- Pressure on advertising demand or pricing, weaker-than-expected e-commerce advertising expansion, or unsustainable shareholder returns.
- NetEase (NTES) / NetEase (9999.HK)Positive view, OW
- Strengths
- Existing games support revenue; changes to Apple iOS fees may lift gross margin; multiple new game titles and overseas publishing opportunities.
- Weaknesses
- Feedback on Sea of Remnants has been weak, and its complex gameplay may struggle to attract casual players; second-half gaming revenue forecasts face downside risk.
- Comparison
- Relative to the earnings improvement already achieved, near-term excess returns depend more heavily on another blockbuster game.
- Risks
- New game revenue below expectations, slowing growth in legacy games, or weak overseas publishing performance.
- Kuaishou Technology (1024.HK)Attractive valuation, OW
- Strengths
- Low implied valuation for core profit; upside potential for Kling AI overseas ARR growth; Kling's recent external financing valuation was high.
- Weaknesses
- Second-half advertising revenue may be weighed down by a high base, weak e-commerce growth, and declining ROI for AI short-drama advertising; core live streaming and advertising are affected by macro conditions.
- Comparison
- A market capitalization of approximately US$22 billion implies 7.5x 2026 core profit and assigns no value to Kling AI.
- Risks
- Intensifying competition and declining pricing in AI video generation, Kling monetization below expectations, or weak advertising and live-streaming demand.
- Bilibili (BILI) / Bilibili (9626.HK)Positive view, OW
- Strengths
- Advertising is expected to sustain growth above 20%; user engagement time is rising; a new game cycle begins in 4Q26; substantial room for margin expansion.
- Weaknesses
- Near-term advertising and live-streaming revenue are affected by consumer sentiment and regulatory uncertainty; near-term catalysts are limited; 2026E valuation is relatively high versus peers.
- Comparison
- Trading at approximately 17x 2026E P/E but around 12x 2027E P/E; the report supports the valuation with a 37% profit CAGR in 2027–2028.
- Risks
- Weaker advertiser budgets, regulation of the live-streaming industry, delays or weak performance of new games, or concerns over major shareholder selling.
- KE Holdings (BEKE) / KE Holdings-H (2423.HK)Positive view, OW
- Strengths
- Market share gains in primary and secondary home transactions; cost optimization supports profitability; investors recognize shareholder returns.
- Weaknesses
- Valuation is relatively high versus China Internet peers; revenue is still expected to decline year over year; adjusted net profit forecasts are below consensus.
- Comparison
- Trading at 18x 2026E P/E and requiring a sustained recovery in real estate sales volumes to support further re-rating.
- Risks
- An unsustainable rebound in real estate transactions, weakening market demand, or intensifying competition in real estate transaction services.
Key data
- Kanzhun 2Q26 revenue growth forecast+15% year over yearNear the high end of company guidance and 1% above market consensus.
- Kanzhun 2026E P/E12xThe report considers this attractive relative to approximately 15% operating profit growth in 2027–2028.
- NetEase 2Q26 revenue and adjusted net profit growth forecasts+7% year over year; +12% year over yearRespectively 1% and 4% above market consensus.
- Kuaishou 2Q26 revenue and adjusted net profit growth forecasts+1% year over year; -30% year over yearBoth are broadly in line with market consensus.
- Kuaishou implied core business valuation7.5x 2026 core profitBased on a market capitalization of approximately US$22 billion, the report believes the market assigns zero implied valuation to Kling AI.
- JOYY BIGO Ads 2Q26 revenue forecastUS$129 million, +48% year over yearExpected to be driven jointly by user acquisition, e-commerce, and gaming advertising.
- JOYY BIGO Ads 2027–2028 revenue CAGR forecast39%Expected to drive consolidated net profit and operating profit growth over the same period.
- JOYY annual shareholder return potentialApproximately 15%Comprising an approximately 9% dividend yield and 6% buybacks.
- Bilibili 2027–2028 profit CAGR forecast37%Advertising growth, the new game cycle, and margin expansion are the main drivers.
- Bilibili long-term operating margin target15%–20%Operating margin was 7% in 1Q26.
- KE Holdings 2Q26 revenue and adjusted net profit growth forecasts-8% year over year; +25% year over yearRevenue is in line with consensus, while adjusted net profit is 6% below consensus.
Impact & implications
For near-term positioning, the report favors Kanzhun and JOYY, which offer room for upward earnings revisions, structural market share growth, and clear cash returns. While the other names have valuation or long-term fundamental support, investors should focus on whether their respective catalysts materialize: new game performance at NetEase, Kling AI ARR and advertising recovery at Kuaishou, advertising and gaming momentum at Bilibili, and the sustainability of real estate transactions at KE Holdings.
Risks
- China's macroeconomic consumption and recruitment demand may be weaker than expected, affecting advertising, live streaming, recruitment, and gaming businesses.
- Intensifying competition in generative AI video may reduce the pricing and commercialization efficiency of products such as Kling.
- Delays in new game launches, unfavorable user feedback, or revenue below expectations.
- Lower advertising ROI and regulatory changes may weigh on short-video and live-streaming monetization.
- An unsustained recovery in real estate sales may affect KE Holdings' transaction volume and valuation.
- Failure to deliver shareholder returns, revenue guidance, or earnings forecasts may trigger valuation de-rating.
What to watch
- Kanzhun's post-earnings revenue guidance, blue-collar business expansion, and World Cup marketing conversion after its August 25 2Q results.
- NetEase's August 20 earnings, the August 21 launch of the FWJ Freemium mobile game, and Sea of Remnants' overseas performance.
- Advertising trends, Kling AI ARR, and overseas monetization progress following Kuaishou's August 19 earnings.
- BIGO Ads revenue, guidance, and execution of buybacks and dividends in JOYY's August 26 earnings.
- Advertising growth, live-streaming performance, and the pace of 4Q new game launches following Bilibili's August 27 earnings.
- KE Holdings' August 21 earnings and management's assessment of 3Q real estate transaction momentum.