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>3690HK: Surplus Meituan delivery riders could improve margins beginning in 1Q23 (+)</li>
<li>PDD: Temu temporarily suspended inventory intake at Guangzhou warehouse because of  shortage in labor and warehouse storage capacity (-)</li>
<li>BABA：Taobao is testing “price comparison” feature, which might impact its take rate（-）</li>
</ul>


3690HK: Surplus Meituan delivery riders could improve margins beginning in 1Q23 (+)
PDD: Temu temporarily suspended inventory intake at Guangzhou warehouse because of  shortage in labor and warehouse storage capacity (-)
BABA：Taobao is testing “price comparison” feature, which might impact its take rate（-）


China TMT Update(Mar.23): 3690HK/PDD/BABA - Surplus Meituan Delivery Riders Could Improve Margins

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/onewo-space-tech" target="_blank" data-smartkarma-citation="entities:36204:1" rel="noopener">Onewo (2602 HK)</a> (OST) had raised around US$730m in its Hong Kong IPO in Sep 2022. Its six-month lockup is set to expire soon.</li>
<li>OST is a property management service provider in China, primarily owned by <a href="https://www.smartkarma.com/entities/china-vanke-co-ltd-h" target="_blank" data-smartkarma-citation="entities:18368:1" rel="noopener">China Vanke (H) (2202 HK)</a>. </li>
<li>In this note, we will talk about the lock-up dynamics and updates since our last note.</li>
</ul>



Onewo (2602 HK) (OST) had raised around US$730m in its Hong Kong IPO in Sep 2022. Its six-month lockup is set to expire soon.
OST is a property management service provider in China, primarily owned by China Vanke (H) (2202 HK). 
In this note, we will talk about the lock-up dynamics and updates since our last note.


Onewo Space-Tech IPO Lock-Up - Company, Parent and Cornerstones Could Eventually Sell

APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC IPOs & Placements

Equity Capital Markets

Growatt Technology / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/growatt-new-energy-technology" target="_blank" data-smartkarma-citation="entities:36103:1" rel="noopener">Growatt Technology (1833969D CH)</a> is looking to raise about US$1bn in its upcoming Hong Kong IPO. </li>
<li>Growatt Technology is a global distributed energy solution provider, specializing in sustainable energy generation, storage and consumption, as well as energy digitalization. </li>
<li>In our previous notes, we looked at the company’s past performance, peer comparison and shared our thoughts on valuation. In this note, we will talk about its refiling updates.</li>
</ul>



Growatt Technology (1833969D CH) is looking to raise about US$1bn in its upcoming Hong Kong IPO. 
Growatt Technology is a global distributed energy solution provider, specializing in sustainable energy generation, storage and consumption, as well as energy digitalization. 
In our previous notes, we looked at the company’s past performance, peer comparison and shared our thoughts on valuation. In this note, we will talk about its refiling updates.


Growatt Technology Pre-IPO - Refiling Updates - Still Running Strong

Equity Bottom-Up

<ul>
<li>PDD reported C4Q22 total revenue and non-GAAP net income (5.1%) and 8.4% higher than cons. Topline miss mainly comes from the deceleration of online marketplace services. </li>
<li>We expect that PDD’s domestic eCommerce will experience slowdown in growth.  Temu is likely to grow GMV rapidly with high losses from branding and subsidies.</li>
<li>PDD still outpaces its peers including JD, BABA and Shein, in both domestic and oversea markets. Maintain BUY rating on PDD with TP of US$95, which implies 24x P/2023E.</li>
</ul>


PDD reported C4Q22 total revenue and non-GAAP net income (5.1%) and 8.4% higher than cons. Topline miss mainly comes from the deceleration of online marketplace services. 
We expect that PDD’s domestic eCommerce will experience slowdown in growth.  Temu is likely to grow GMV rapidly with high losses from branding and subsidies.
PDD still outpaces its peers including JD, BABA and Shein, in both domestic and oversea markets. Maintain BUY rating on PDD with TP of US$95, which implies 24x P/2023E.


[PDD US]: Slowing Growth but Still Best-In-Class, Cut TP Maintain BUY.

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

<ul>
<li>With the impact of cost-cutting and monetisation wearing out, consensus looks overly aggressive to expect revenue and OP CAGRs of 24% and 35% respectively over the next two years.</li>
<li>Based on <a href="https://www.smartkarma.com/entities/pinduoduo-inc" target="_blank" data-smartkarma-citation="entities:27250:1" rel="noopener">Pinduoduo (PDD US)</a>’s revenue and cost trends discussed below, we think the steady state OP margin could be substantially lower than consensus.</li>
<li>Expecting consensus to downgrade expectations, we don’t think it is worthwhile paying up to 45.0x FY+2 OP (on our steady-state OP margin) for Pinduoduo at its current EV of $80.5bn.</li>
</ul>


With the impact of cost-cutting and monetisation wearing out, consensus looks overly aggressive to expect revenue and OP CAGRs of 24% and 35% respectively over the next two years.
Based on Pinduoduo (PDD US)’s revenue and cost trends discussed below, we think the steady state OP margin could be substantially lower than consensus.
Expecting consensus to downgrade expectations, we don’t think it is worthwhile paying up to 45.0x FY+2 OP (on our steady-state OP margin) for Pinduoduo at its current EV of $80.5bn.


Pinduoduo: Cost Cutting Wearing Out, Margins Heading Towards Our Steady State Target of 6-7%

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)

China TMT Update(Mar.23): 3690HK/PDD/BABA - Surplus Meituan Delivery Riders Could Improve Margins

3690HK: Surplus Meituan delivery riders could improve margins (+); PDD: Temu temporarily suspended inventory intake at Guangzhou warehouse(-);...

Blue Lotus Research Institute

Onewo Space-Tech IPO Lock-Up - Company, Parent and Cornerstones Could Eventually Sell

Onewo (2602 HK) (OST) had raised around US$730m in its Hong Kong IPO in Sep 2022. Its six-month lockup is set to expire soon.

Sumeet Singh

Growatt Technology Pre-IPO - Refiling Updates - Still Running Strong

Growatt Technology (1833969D CH) is looking to raise about US$1bn in its upcoming Hong Kong IPO. In this note, we will talk about its refiling...

Ethan Aw

[PDD US]: Slowing Growth but Still Best-In-Class, Cut TP Maintain BUY.

We expect that PDD’s domestic eCommerce will experience slowdown in growth. Temu is likely to grow GMV rapidly with high losses from branding and...

Blue Lotus Research Institute

Pinduoduo: Cost Cutting Wearing Out, Margins Heading Towards Our Steady State Target of 6-7%

Expecting consensus to downgrade expectations substantially over the next few years, we don’t think it is worthwhile paying up to 45.0x FY+2 OP (on...

Oshadhi Kumarasiri

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