Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Equity Bottom-Up

Kuaishou Technology operates as a content community and social platform. The Company helps users create, upload and watch short videos on mobile devices. Kuaishou Technology offers services worldwide.

<ul>
<li>Kuaishou reported C4Q24 revenue, IFRS operating profit, and IFRS net income slightly below our estimates and consensus. Margin outperformed.</li>
<li>Advertising and e-commerce revenue growth temporarily slowed from due to Kuaishou’s offering traffic subsidies to the internal merchants, reducing incentive to advertise, but will translate to revenues later;</li>
<li>We cut TP from HK$72 to HK$70 to reflect lowered margin outlook due to AI-related capex and R&amp;D expenses</li>
</ul>


Kuaishou reported C4Q24 revenue, IFRS operating profit, and IFRS net income slightly below our estimates and consensus. Margin outperformed.
Advertising and e-commerce revenue growth temporarily slowed from due to Kuaishou’s offering traffic subsidies to the internal merchants, reducing incentive to advertise, but will translate to revenues later;
We cut TP from HK$72 to HK$70 to reflect lowered margin outlook due to AI-related capex and R&amp;D expenses


[Kuaishou (1024 HK, BUY, TP HK$70) TP Change]: C4Q24 Review: Temporary Setback a Chance to Buy

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

MINISO Group Holding is a value retailer with a focus on offering products that are aesthetically pleasing, good-quality, and affordable.

<ul>
<li>MNSO reported C4Q24 rev.1.6%/2.0%, and non-GAAP EBIT 3.4%/2.0% below our est./cons.. What concerns us more is the quality of the growth;</li>
<li>In our view, MNSO's slow same-store-sales-growth (SSSG), overseas investment, and Yonghui's integration haven't fully reflected in the price;</li>
<li>We cut the TP to US$16 and maintain the SELL rating to reflect slower profit growth. The stock trades at 14x 25E P/E vs. a 12% 3 Yr. NI CAGR</li>
</ul>


MNSO reported C4Q24 rev.1.6%/2.0%, and non-GAAP EBIT 3.4%/2.0% below our est./cons.. What concerns us more is the quality of the growth;
In our view, MNSO's slow same-store-sales-growth (SSSG), overseas investment, and Yonghui's integration haven't fully reflected in the price;
We cut the TP to US$16 and maintain the SELL rating to reflect slower profit growth. The stock trades at 14x 25E P/E vs. a 12% 3 Yr. NI CAGR


[Miniso Group (MNSO US, SELL, TP US$16) TP Change]: C4Q24 Review: Downside Not yet Fully Priced In

Meituan operates as a web based shopping platform for locally found consumer products and retail services. The Company offers deals of the day by selling vouchers on local services and entertainment, dining, delivery, and other services. Meituan provides its services throughout China.

<ul>
<li>Meituan reported C4Q24 revenue in-line, and non-IFRS OP miss 7.9%/1.9% vs. our estimate/consensus, due to extra Opex on purchasing GPU, while core biz profitability improved.</li>
<li>We see membership initiatives and enhancing O2O penetration as the main catalyst in 2025, and the downside risk on competition, social security, and overseas investment are limited.</li>
<li>We rise TP to HK$196 to factor in the promising OP growth trajectory and keep as TOP BUY in China e-commerce.</li>
</ul>


Meituan reported C4Q24 revenue in-line, and non-IFRS OP miss 7.9%/1.9% vs. our estimate/consensus, due to extra Opex on purchasing GPU, while core biz profitability improved.
We see membership initiatives and enhancing O2O penetration as the main catalyst in 2025, and the downside risk on competition, social security, and overseas investment are limited.
We rise TP to HK$196 to factor in the promising OP growth trajectory and keep as TOP BUY in China e-commerce.


[Meituan (3690 HK, BUY, TP HK$196) TP Change]: Sustained Operating Profit Growth in 2025…TOP BUY

PDD Holdings Inc. is a multinational commerce group that owns and operates a portfolio of businesses. The Company focuses on digital economy so that local communities and small businesses can benefit from the increased productivity and new opportunities. PDD Holdings has built a network of sourcing, logistics, and fulfillment capabilities for its underlying businesses.

<ul>
<li>PDD reported C4Q24 top line 1.1%/(6.1%) vs. our est./cons. and non-GAAP operating income (5.4%)/(5.6%) vs. est./cons., </li>
<li>PDD rose to prominence by optimizing the value chain built/inherited by Alibaba/eBay in China and Amazon/eBay in US. </li>
<li>As these two “bonuses” coming to an end, PDD must build its own. While growth shall normalize, China low tier cities and global developing markets shall sustain its growth. </li>
</ul>


PDD reported C4Q24 top line 1.1%/(6.1%) vs. our est./cons. and non-GAAP operating income (5.4%)/(5.6%) vs. est./cons., 
PDD rose to prominence by optimizing the value chain built/inherited by Alibaba/eBay in China and Amazon/eBay in US. 
As these two “bonuses” coming to an end, PDD must build its own. While growth shall normalize, China low tier cities and global developing markets shall sustain its growth. 


[PDD Holdings Inc. (PDD US, BUY, TP US$146) Review]: A New PDD Focusing on Low Tier and Non-US

Thematic (Sector/Industry)

<ul>
<li>Our take is JD.com's expansion to O2O/Food Delivery is still measured and constrained. It mainly serves the premium members;</li>
<li>Meituan, PDD' and Beike posted results broadly both in-line/slightly exceed expectations. Meituan and Beike raised AI capex while PDD and JD.com didn't mention;</li>
<li>Game received first official recognition in government's 30 stimulative measures for consumption.  Our TOP PICK is NTES.</li>
</ul>


Our take is JD.com's expansion to O2O/Food Delivery is still measured and constrained. It mainly serves the premium members;
Meituan, PDD' and Beike posted results broadly both in-line/slightly exceed expectations. Meituan and Beike raised AI capex while PDD and JD.com didn't mention;
Game received first official recognition in government's 30 stimulative measures for consumption.  Our TOP PICK is NTES.


[Blue Lotus Non-US Internet Weekly, 12/52]: The Tug of War Between JD and Meituan Intensifies

Blue Lotus Research Institute
China growth and global non-US Internet equities

[Kuaishou (1024 HK, BUY, TP HK$70) TP Change]: C4Q24 Review: Temporary Setback a Chance to Buy

Kuaishou's revenue and profit slightly below estimates, margin outperformed. Slowdown in advertising and e-commerce revenue growth due to traffic...

Blue Lotus Research Institute

[Miniso Group (MNSO US, SELL, TP US$16) TP Change]: C4Q24 Review: Downside Not yet Fully Priced In

MNSO reports lower revenue and EBIT than expected, concerns over growth quality, slow SSSG and overseas investment not fully reflected in stock...

Blue Lotus Research Institute

[Meituan (3690 HK, BUY, TP HK$196) TP Change]: Sustained Operating Profit Growth in 2025…TOP BUY

Meituan's revenue in-line, OP miss due to extra Opex on GPU, but core biz profitability improved. Membership initiatives and O2O penetration seen...

Blue Lotus Research Institute

[PDD Holdings Inc. (PDD US, BUY, TP US$146) Review]: A New PDD Focusing on Low Tier and Non-US

PDD's top line and operating income fall short of expectations as it transitions from optimizing existing value chains to building

Blue Lotus Research Institute

[Blue Lotus Non-US Internet Weekly, 12/52]: The Tug of War Between JD and Meituan Intensifies

JD.com's measured expansion into O2O/Food Delivery targets premium members. Government recognition of gaming in consumption stimulus measures...

Blue Lotus Research Institute

[Kuaishou (1024 HK, BUY, TP HK$70) TP Change]: C4Q24 Review: Temporary Setback a Chance to Buy

​Kuaishou's revenue and profit slightly below estimates, margin outperformed. Slowdown in advertising and e-commerce revenue growth due to traffic...

Blue Lotus Research Institute

[Miniso Group (MNSO US, SELL, TP US$16) TP Change]: C4Q24 Review: Downside Not yet Fully Priced In

​MNSO reports lower revenue and EBIT than expected, concerns over growth quality, slow SSSG and overseas investment not fully reflected in stock...

Blue Lotus Research Institute

[Meituan (3690 HK, BUY, TP HK$196) TP Change]: Sustained Operating Profit Growth in 2025…TOP BUY

​Meituan's revenue in-line, OP miss due to extra Opex on GPU, but core biz profitability improved. Membership initiatives and O2O penetration seen...

Blue Lotus Research Institute

[PDD Holdings Inc. (PDD US, BUY, TP US$146) Review]: A New PDD Focusing on Low Tier and Non-US

​PDD's top line and operating income fall short of expectations as it transitions from optimizing existing value chains to building

Blue Lotus Research Institute

[Blue Lotus Non-US Internet Weekly, 12/52]: The Tug of War Between JD and Meituan Intensifies

​JD.com's measured expansion into O2O/Food Delivery targets premium members. Government recognition of gaming in consumption stimulus measures...

Blue Lotus Research Institute

Kuaishou's revenue and profit slightly below estimates, margin outperformed. Slowdown in advertising and e-commerce revenue growth due to traffic...

MNSO reports lower revenue and EBIT than expected, concerns over growth quality, slow SSSG and overseas investment not fully reflected in stock...

Meituan's revenue in-line, OP miss due to extra Opex on GPU, but core biz profitability improved. Membership initiatives and O2O penetration seen...

PDD's top line and operating income fall short of expectations as it transitions from optimizing existing value chains to building

JD.com's measured expansion into O2O/Food Delivery targets premium members. Government recognition of gaming in consumption stimulus measures...