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

Equity Bottom-Up

<ul>
<li>We expect CPNG to report C2Q23 revenue and profit in-line and (31.6%) vs. cons., respectively. CPNG's profit miss is largely due to rapid expansion in Taiwan...</li>
<li>...which we estimate it will impact net profit by up to 40% this year.  AliExpress continues its development in South Korea, Temu, is expected to put pressure on Coupang. </li>
<li>We maintain SELL on Coupang and revise down this year's EPS estimate by 16% and cut our TP to US$ 13.7 to reflect the changes on the profit side.</li>
</ul>


We expect CPNG to report C2Q23 revenue and profit in-line and (31.6%) vs. cons., respectively. CPNG's profit miss is largely due to rapid expansion in Taiwan...
...which we estimate it will impact net profit by up to 40% this year.  AliExpress continues its development in South Korea, Temu, is expected to put pressure on Coupang. 
We maintain SELL on Coupang and revise down this year's EPS estimate by 16% and cut our TP to US$ 13.7 to reflect the changes on the profit side.


[Coupang Inc. (CPNG US, SELL, TP US$13.7) TP Change]: Taiwan Expansion Will Lower the Profit Margin

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Cross Asset Strategy

<ul><li>Medical insurance /Cover Story: China seeks cure for ailing health system</li><li>Collapse /: School gym roof collapse leaves 11 dead in Northeast China</li><li>VCs /: U.S. lawmakers demand venture capital firms provide details of China tech investments</li></ul>

Medical insurance /Cover Story: China seeks cure for ailing health systemCollapse /: School gym roof collapse leaves 11 dead in Northeast ChinaVCs /: U.S. lawmakers demand venture capital firms provide details of China tech investments

CX Daily: China Seeks Cure for Ailing Health System

APAC IPOs & Placements, Aequitas Research

Ethan Aw

APAC 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.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/qiniu-limited" target="_blank" data-smartkarma-citation="entities:39897:1" rel="noopener">Qiniu Limited (1045102D CH)</a> is looking to raise about US$200m in its upcoming Hong Kong IPO.</li>
<li>Qiniu is an intelligent audiovisual service provider. According to iResearch, the firm is the third largest audiovisual platform as a service (PaaS) provider in China in terms of FY22 revenue.</li>
<li>Qiniu’s revenue has primarily been driven by its MPaaS segment over the track record period. However, the firm’s losses are still widening while its balance sheet health deteriorates. </li>
</ul>



Qiniu Limited (1045102D CH) is looking to raise about US$200m in its upcoming Hong Kong IPO.
Qiniu is an intelligent audiovisual service provider. According to iResearch, the firm is the third largest audiovisual platform as a service (PaaS) provider in China in terms of FY22 revenue.
Qiniu’s revenue has primarily been driven by its MPaaS segment over the track record period. However, the firm’s losses are still widening while its balance sheet health deteriorates. 


Qiniu Pre-IPO - Widening Losses and Dwindling Market Share

Thematic (Sector/Industry)

<ul>
<li>Baba: Alibaba's annual report, Chinese media discussions and our thoughts</li>
<li>BGNE/9926HK/9995HK/1801HK/1877HK/LGNE/ZLAB: NHSA issued new rule to protect drug pricing (-)</li>
<li>BEKE: China reinforce the city village reconstruction policy, which is different with Shantytown Renovation project（+)</li>
</ul>


Baba: Alibaba's annual report, Chinese media discussions and our thoughts
BGNE/9926HK/9995HK/1801HK/1877HK/LGNE/ZLAB: NHSA issued new rule to protect drug pricing (-)
BEKE: China reinforce the city village reconstruction policy, which is different with Shantytown Renovation project（+)


China TMT Update-BABA/BGNE/9926HK/9995HK/1801HK/1877HK/LGNE/ZLAB/BEKE-Baba's Annual Report/NHSA Rule

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Event-Driven

<ul>
<li>As of 24 July, there could be one set of changes for the <a href="https://www.smartkarma.com/entities/ishares-china-large-cap-etf" target="_blank" data-smartkarma-citation="entities:766:1" rel="noopener">iShares China Large-Cap (FXI) (FXI US)</a> in September.</li>
<li>There should be less than 1x ADV to buy on <a href="https://www.smartkarma.com/entities/zte-corp-h" target="_blank" data-smartkarma-citation="entities:6922:1" rel="noopener">ZTE Corp H (763 HK)</a> while there will be nearly 2x ADV to sell on <a href="https://www.smartkarma.com/entities/anhui-conch-cement-co-ltd" target="_blank" data-smartkarma-citation="entities:159:1" rel="noopener">Anhui Conch Cement (914 HK)</a>. </li>
<li>Short interest has been inching higher on <a href="https://www.smartkarma.com/entities/zte-corp-h" target="_blank" data-smartkarma-citation="entities:6922:1" rel="noopener">ZTE Corp H (763 HK)</a> while it is barely moving on <a href="https://www.smartkarma.com/entities/anhui-conch-cement-co-ltd" target="_blank" data-smartkarma-citation="entities:159:1" rel="noopener">Anhui Conch Cement (914 HK)</a> as the stock trades near its lows.</li>
</ul>


As of 24 July, there could be one set of changes for the iShares China Large-Cap (FXI) (FXI US) in September.
There should be less than 1x ADV to buy on ZTE Corp H (763 HK) while there will be nearly 2x ADV to sell on Anhui Conch Cement (914 HK). 
Short interest has been inching higher on ZTE Corp H (763 HK) while it is barely moving on Anhui Conch Cement (914 HK) as the stock trades near its lows.


FXI Rebalance Preview: One Potential Change in September

China

Alibaba Group Holding Limited provides online sales services. The Company provides internet infrastructure, electronic commerce, online financial, and internet content services through its subsidiaries. Alibaba Group Holding offers its products and services worldwide.

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Alibaba Group Holding (9988 HK)

[Coupang Inc. (CPNG US, SELL, TP US$13.7) TP Change]: Taiwan Expansion Will Lower the Profit Margin

We expect CPNG to report C2Q23 revenue and profit in-line and (31.6%) vs. cons., respectively. CPNG's profit miss is largely due to rapid expansion...

Blue Lotus Research Institute

CX Daily: China Seeks Cure for Ailing Health System

Medical insurance /Cover Story: China seeks cure for ailing health system Collapse /: School gym roof collapse leaves 11 dead in Northeast...

Caixin Global

China TMT Update-BABA/BGNE/9926HK/9995HK/1801HK/1877HK/LGNE/ZLAB/BEKE-Baba's Annual Report/NHSA Rule

Baba: Alibaba's annual report;BGNE/9926HK/9995HK/1801HK/1877HK/LGNE/ZLAB: NHSA issued new rule to protect drug pricing;BEKE: China reinforce the...

Blue Lotus Research Institute

FXI Rebalance Preview: One Potential Change in September

There could be one change for the FXI in September. The impact will be higher on the delete and there are plenty of shorts on both stocks. The AH...

Brian Freitas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Coupang Inc. (CPNG US, SELL, TP US$13.7) TP Change]: Taiwan Expansion Will Lower the Profit Margin

We expect CPNG to report C2Q23 revenue and profit in-line and (31.6%) vs. cons., respectively. CPNG's profit miss is largely due to rapid expansion...

Blue Lotus Research Institute

CX Daily: China Seeks Cure for Ailing Health System

Medical insurance /Cover Story: China seeks cure for ailing health system Collapse /: School gym roof collapse leaves 11 dead in Northeast...

Caixin Global

Qiniu Pre-IPO - Widening Losses and Dwindling Market Share

Qiniu Limited (1045102D CH) is looking to raise about US$200m in its upcoming Hong Kong IPO. Its revenue has primarily been driven by its MPaaS...

Ethan Aw

China TMT Update-BABA/BGNE/9926HK/9995HK/1801HK/1877HK/LGNE/ZLAB/BEKE-Baba's Annual Report/NHSA Rule

Baba: Alibaba's annual report;BGNE/9926HK/9995HK/1801HK/1877HK/LGNE/ZLAB: NHSA issued new rule to protect drug pricing;BEKE: China reinforce the...

Blue Lotus Research Institute

FXI Rebalance Preview: One Potential Change in September

There could be one change for the FXI in September. The impact will be higher on the delete and there are plenty of shorts on both stocks. The AH...

Brian Freitas