China/Asia TMT

Shawn Yang

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

Thematic (Sector/Industry)

<ul>
<li>We anticipate that the major swing factor of global e-commerce platform is the global expansion of Chinese e-commerce companies, including Shein, Temu, AliExpress, and TikTok Shop (or ‘STAT’).</li>
<li>The Japanese market is a good example. We upgraded Mercari to BUY because we believe that its second-hand eCommerce model addresses the issue of product supply.</li>
<li>We downgraded Z-Holdings to SELL as its B2C model lacks an advantage in product supply and has already lost market share.</li>
</ul>


We anticipate that the major swing factor of global e-commerce platform is the global expansion of Chinese e-commerce companies, including Shein, Temu, AliExpress, and TikTok Shop (or ‘STAT’).
The Japanese market is a good example. We upgraded Mercari to BUY because we believe that its second-hand eCommerce model addresses the issue of product supply.
We downgraded Z-Holdings to SELL as its B2C model lacks an advantage in product supply and has already lost market share.


[Blue Lotus Japanese E-Commerce Sector Update]: Facing the Competition from Chinese ECommerce STAT

<ul>
<li>PDD/ BABA/ CPNG/ SE: Temu launches in South Korea (+/-/-/-)</li>
<li>BEKE: Comments on the rumors of lowering existing mortgage interest rates and loosening home purchase restrictions of 1st tier cities(/)</li>
<li>1211HK/TSLA/XPEV/LI/NIO: NDRC introduces measures to increase car consumption ( + )</li>
</ul>


PDD/ BABA/ CPNG/ SE: Temu launches in South Korea (+/-/-/-)
BEKE: Comments on the rumors of lowering existing mortgage interest rates and loosening home purchase restrictions of 1st tier cities(/)
1211HK/TSLA/XPEV/LI/NIO: NDRC introduces measures to increase car consumption ( + )


China TMT Update-PDD/BABA/CPNG/SE/BEKE/1211HK/TSLA/XPEV/LI/NIO-Temu Launches in South Korea

Greater China Equity Long/Short Analyst

Eric Chen

Equity Bottom-Up

<ul>
<li>We think the tailwinds of China’s consumption downgrade for PDD are overblown, while TEMU will be more of a drag than a support for bottom-line in quarters ahead.</li>
<li>2Q results to be announced next month will finally validate our thesis on the company’s earnings risk which we flagged back in last December.  </li>
<li>The markets have been pricing in a sharp slowdown after a short-lived euphoria around its seemingly strong 1Q results, yet downside surprises could still catch investors off guard. Stay neutral.</li>
</ul>


We think the tailwinds of China’s consumption downgrade for PDD are overblown, while TEMU will be more of a drag than a support for bottom-line in quarters ahead.
2Q results to be announced next month will finally validate our thesis on the company’s earnings risk which we flagged back in last December.  
The markets have been pricing in a sharp slowdown after a short-lived euphoria around its seemingly strong 1Q results, yet downside surprises could still catch investors off guard. Stay neutral.


Pinduoduo (PDD US): Resetting Expectations

<ul>
<li>Boss Zhipin: Boss Zhipin MAU growth rate is higher than peers’, but still hard to monetize this year.</li>
<li>PDD/3690.HK: PDD launches local life services portal (+ / -)</li>
<li>NTES/700HK: The Rise of "Gaming with Influencers" on Douyin (+/-)</li>
</ul>


Boss Zhipin: Boss Zhipin MAU growth rate is higher than peers’, but still hard to monetize this year.
PDD/3690.HK: PDD launches local life services portal (+ / -)
NTES/700HK: The Rise of "Gaming with Influencers" on Douyin (+/-)


China TMT Update-BZ/PDD/3690/NTES/700/Douyin-PDD Launches Local Life Services Portal

<ul>
<li>BABA/VIPS/JD/PDD/3690.HK: Online retail sales growth steady in June NBS data (+)</li>
<li>700HK/SE:Tencent's FPS game "Arena Breakout" international version was launched on July 14th (+/-)</li>
<li>XPEV : Xpeng denies planning of PHEV pipelines  ( / )</li>
</ul>


BABA/VIPS/JD/PDD/3690.HK: Online retail sales growth steady in June NBS data (+)
700HK/SE:Tencent's FPS game "Arena Breakout" international version was launched on July 14th (+/-)
XPEV : Xpeng denies planning of PHEV pipelines  ( / )


China TMT Update-BABA/VIPS/JD/PDD/3690.HK/700HK/SE/XPEV-Online Retail Sales Growth；"Arena Breakout"；

China

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.

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PDD Holdings (PDD US)

[Blue Lotus Japanese E-Commerce Sector Update]: Facing the Competition from Chinese ECommerce STAT

We anticipate that the major swing factor of global e-commerce platform is the global expansion of Chinese e-commerce companies, including Shein,...

Blue Lotus Research Institute

China TMT Update-PDD/BABA/CPNG/SE/BEKE/1211HK/TSLA/XPEV/LI/NIO-Temu Launches in South Korea

PDD/BABA/CPNG/SE: Temu launches in South Korea;BEKE: Comments on the rumors of and loosening home purchase restrictions;1211HK/TSLA/XPEV/LI/NIO:...

Blue Lotus Research Institute

Pinduoduo (PDD US): Resetting Expectations

The tailwinds of China’s consumption downgrade for PDD are overblown. While markets are pricing in a drastic deceleration of PDD's earnings growth,...

Eric Chen

China TMT Update-BZ/PDD/3690/NTES/700/Douyin-PDD Launches Local Life Services Portal

Boss Zhipin: Boss Zhipin MAU growth rate is higher than peers’; PDD/3690.HK: PDD launches local life services portal; NTES/700HK: The Rise of...

Blue Lotus Research Institute

China TMT Update-BABA/VIPS/JD/PDD/3690.HK/700HK/SE/XPEV-Online Retail Sales Growth；"Arena Breakout"；

BABA/VIPS/JD/PDD/3690.HK: Online retail sales growth steady in June NBS data (+)/700HK/SE:Tencent's FPS game "Arena Breakout" international version...

Blue Lotus Research Institute

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