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 update our China online advertising model and forecast that the industry will reach RMB 1,167 bn with 9.3% YoY in 2023, rebounding from 2.7% YoY in 2022.</li>
<li>Bytedance's slowdown, Tencent's Video Account, and some sectors' uneven faster-than-expected recoveries will be three key themes that could generate investment opportunities in 2023.</li>
<li>We recommend BUY Tencent, BABA, PDD, and Meituan within the sector.</li>
</ul>


We update our China online advertising model and forecast that the industry will reach RMB 1,167 bn with 9.3% YoY in 2023, rebounding from 2.7% YoY in 2022.
Bytedance's slowdown, Tencent's Video Account, and some sectors' uneven faster-than-expected recoveries will be three key themes that could generate investment opportunities in 2023.
We recommend BUY Tencent, BABA, PDD, and Meituan within the sector.


China Online Ads Outlook: A Year of Uneven Recovery

<ul>
<li>Douyin eCommerce next important step is Douyin Shopping Mall, an in-app page like Taobao/PDD. </li>
<li>We are conservative about Douyin Shopping Mall’s potential, and we suggest that it could only reach 20% of Douyin eCommerce GMV in the long term.  </li>
<li>We suggest that the slowdown growth of Douyin eCommerce will be positive to BABA mostly, and then followed by PDD and JD. Kuaishou is encountering similar issues with Douyin. </li>
</ul>


Douyin eCommerce next important step is Douyin Shopping Mall, an in-app page like Taobao/PDD. 
We are conservative about Douyin Shopping Mall’s potential, and we suggest that it could only reach 20% of Douyin eCommerce GMV in the long term.  
We suggest that the slowdown growth of Douyin eCommerce will be positive to BABA mostly, and then followed by PDD and JD. Kuaishou is encountering similar issues with Douyin. 


Douyin Shopping Mall Unlikely to Be a Game Changer

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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 Bottom-Up

<ul>
<li>Alibaba’s CEO will lead the cloud business himself, because the retailing business faces headwind.</li>
<li>Tencent will enter the short video market again, because the online game is till stagnant.</li>
<li>Douyin will launch a car-hailing platform, which will compete with Meituan.</li>
</ul>


Alibaba’s CEO will lead the cloud business himself, because the retailing business faces headwind.
Tencent will enter the short video market again, because the online game is till stagnant.
Douyin will launch a car-hailing platform, which will compete with Meituan.


China Internet Weekly (2Jan2023): Alibaba, Tencent, Douyin, Bilibili, Uxin

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.

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>After bouncing more than 60% from a near-all-time low, <a href="https://www.smartkarma.com/entities/alibaba-group" target="_blank" data-smartkarma-citation="entities:28434:1" rel="noopener">Alibaba Group (9988 HK)</a>’s progress seems to have ended abruptly with the share-price holding flat for almost a month in December-2022.</li>
<li>Meanwhile, the company's cash cows, Taobao and Tmall are losing market share. Rapidly rising COVID infections create new headwinds that could affect business performance for at least two more quarters.</li>
<li>With the shares trading near the top end of the new downward trend channel, we are short Alibaba as earnings are expected to miss consensus estimates in the next two-quarters.</li>
</ul>


After bouncing more than 60% from a near-all-time low, Alibaba Group (9988 HK)’s progress seems to have ended abruptly with the share-price holding flat for almost a month in December-2022.
Meanwhile, the company's cash cows, Taobao and Tmall are losing market share. Rapidly rising COVID infections create new headwinds that could affect business performance for at least two more quarters.
With the shares trading near the top end of the new downward trend channel, we are short Alibaba as earnings are expected to miss consensus estimates in the next two-quarters.


Alibaba – Cash Cows in Trouble & Rapidly Rising COVID Creates New Headwinds

Xin Yu, CFA

<ul>
<li>December GMV was below expectations, due to elevated case counts after the relaxation of the covid restriction</li>
<li>With high return rate and more merchant supports, gap between GMV growth and CRM growth remained large in 4Q. </li>
<li>Long-Term wise, Alibaba will continue losing market share while PDD's market share may potentially surpass JD. </li>
</ul>


December GMV was below expectations, due to elevated case counts after the relaxation of the covid restriction
With high return rate and more merchant supports, gap between GMV growth and CRM growth remained large in 4Q. 
Long-Term wise, Alibaba will continue losing market share while PDD's market share may potentially surpass JD. 


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)

China Online Ads Outlook: A Year of Uneven Recovery

We update our China online advertising model and conclude that Bytedance's slowdown, Tencent's Video Account, and some sectors' uneven recoveries...

Blue Lotus Research Institute

Douyin Shopping Mall Unlikely to Be a Game Changer

Douyin's eCommerce has long been seen as a game changer, but we don't think it will continue this year. The slowdown growth of Douyin eCommerce...

Blue Lotus Research Institute

China Internet Weekly (2Jan2023): Alibaba, Tencent, Douyin, Bilibili, Uxin

Alibaba’s CEO will lead the cloud business himself. Tencent will enter the short video market again. Douyin will launch a car-hailing platform.

Ming Lu

Alibaba – Cash Cows in Trouble & Rapidly Rising COVID Creates New Headwinds

Alibaba's cash cows, Taobao and Tmall are losing market share. Rapidly rising COVID infections create new headwinds that could affect business...

Oshadhi Kumarasiri

Alibaba 4Q Ecommerce Outlook

Alibaba 4Q GMV growth was below expectations. Gap between CRM growth and GMV growth will remain large due to high return rate and more support to...

Xin Yu, CFA

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