Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy 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

Thematic (Sector/Industry)

<ul>
<li>Given Trump’s overhaul of US economy and world trade, US interest rate may stay high and Renminbi might depreciate further, both negative for our sectors from a foreign investor perspective;</li>
<li>We expect China to respond strongly to Trump Tariff 2.0, which will necessitate bigger stimulus, leading to a scenario of a policy overdose;</li>
<li>We look for: (1) high dividend yield, (2) US-dollar exposure, (3) policy overdose in stock selection. We add TRIP and ATAT to our DMC and reiterate our MMC  portfolios</li>
</ul>


Given Trump’s overhaul of US economy and world trade, US interest rate may stay high and Renminbi might depreciate further, both negative for our sectors from a foreign investor perspective;
We expect China to respond strongly to Trump Tariff 2.0, which will necessitate bigger stimulus, leading to a scenario of a policy overdose;
We look for: (1) high dividend yield, (2) US-dollar exposure, (3) policy overdose in stock selection. We add TRIP and ATAT to our DMC and reiterate our MMC  portfolios


Invest in China Growth Equity in High-Rate Environment

Global Mobility/Transport, Equity Long-Short

Mohshin Aziz

Equity Bottom-Up

Contemporary Amperex Technology (CATL) / Equity Bottom-Up

<ul>
<li>CATL announced its 1Q24 net profit of CNY9.2B (+19% YoY), which straight out blew past market expectations </li>
<li>The fear of ever-declining battery prices is overstated, as CATL has clearly shown it can take lower margins and boost ROEs via higher inventory turnover and high utilisation rates  </li>
<li>Our fair value of CNY253 <strong>(+27% UPSIDE)</strong> is derived by 23x 2024 PE ratio, which is 1SD below its historical mean. CATL is currently trading at exceptionally low valuations </li>
</ul>


CATL announced its 1Q24 net profit of CNY9.2B (+19% YoY), which straight out blew past market expectations 
The fear of ever-declining battery prices is overstated, as CATL has clearly shown it can take lower margins and boost ROEs via higher inventory turnover and high utilisation rates  
Our fair value of CNY253 (+27% UPSIDE) is derived by 23x 2024 PE ratio, which is 1SD below its historical mean. CATL is currently trading at exceptionally low valuations 


Contemporary Amperex Technology (300750 CH) 1Q24 Better than Expected

<ul>
<li>2Q24 results were decent, with 13% YoY growth in net income to CNY12.4 billion, but share price continues to drift down as market fears western nations resistance to Chinese EVs </li>
<li>Operationally, things are just fine , CATL will add 153GWh capacity in 2H24 across China, Europe, and the U.S.A. - and they are finding solution around the 2026 new tariffs  </li>
<li>Our fair value of CNY253 (+43% UPSIDE) is derived by 23x 2024 PE ratio, which is 1SD below its historical mean. CATL is currently trading at exceptionally low valuations</li>
</ul>


2Q24 results were decent, with 13% YoY growth in net income to CNY12.4 billion, but share price continues to drift down as market fears western nations resistance to Chinese EVs 
Operationally, things are just fine , CATL will add 153GWh capacity in 2H24 across China, Europe, and the U.S.A. - and they are finding solution around the 2026 new tariffs  
Our fair value of CNY253 (+43% UPSIDE) is derived by 23x 2024 PE ratio, which is 1SD below its historical mean. CATL is currently trading at exceptionally low valuations


Contemporary Amperex Technology (300750 CH): Cheap Valuations on Negative Sentiments

Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

<ul>
<li>In this analysis, we review allocations in Contemporary Amperex Technology among 3 sets of active China managers.  MSCI China Funds, China A-Share Funds and Greater China Funds. </li>
<li>We find that exposure in Contemporary Amperex Technology has risen to peak levels across all 3 investor sets, making it one of the largest overweight positions in China.</li>
<li>Outside of dedicated China, we also see ownership growth among Global Emerging Market and Asia Ex-Japan active strategies.</li>
</ul>


In this analysis, we review allocations in Contemporary Amperex Technology among 3 sets of active China managers.  MSCI China Funds, China A-Share Funds and Greater China Funds. 
We find that exposure in Contemporary Amperex Technology has risen to peak levels across all 3 investor sets, making it one of the largest overweight positions in China.
Outside of dedicated China, we also see ownership growth among Global Emerging Market and Asia Ex-Japan active strategies.


Contemporary Amperex Technology - King of the Overweights

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Contemporary Amperex Technology (CATL) / Event-Driven

<ul>
<li>The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.</li>
<li>Last week saw NORTHBOUND net BUY RMB 0.8bn of A-shares on lower gross volumes. NORTHBOUND bought CATL, China Yangtze Power, and Luxshare. AH Premia bounced, but net volumes are suspect.</li>
<li>There is some question as to whether the NORTHBOUND volumes to the buy side are all foreigners. Some suspect there is national team buying mixed in, as was expected.</li>
</ul>


The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net BUY RMB 0.8bn of A-shares on lower gross volumes. NORTHBOUND bought CATL, China Yangtze Power, and Luxshare. AH Premia bounced, but net volumes are suspect.
There is some question as to whether the NORTHBOUND volumes to the buy side are all foreigners. Some suspect there is national team buying mixed in, as was expected.


Mainland Connect NORTHBOUND Flows (To 24 May 2024): Weak Net Buy, Weak Gross, Idiosyncratic Flows

China

Contemporary Amperex Technology Co., Limited. operates as a battery products manufacturing company. The Company produces and sells power battery materials, energy storage batteries energy storage battery cells, systems, and other products. Contemporary Amperex Technology also provides batteries recycling services.

Contemporary Amperex Technology (CATL) (300750 CH)

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Contemporary Amperex Technology (CATL) (300750 CH)

Invest in China Growth Equity in High-Rate Environment

Trump's policies may lead to high US interest rates and a depreciating Renminbi. As remedy outside of buying high dividend stocks, we propose a...

Blue Lotus Research Institute

Contemporary Amperex Technology (300750 CH) 1Q24 Better than Expected

CATL's 1Q24 net profit exceeded expectations, showing it can maintain profitability despite fears of declining battery prices. Fair value suggests...

Mohshin Aziz

Contemporary Amperex Technology (300750 CH): Cheap Valuations on Negative Sentiments

CATL's 2Q24 results were good and the outlook is equally encouraging. But share price drift downwards due to negative sentiment. Fundamentals...

Mohshin Aziz

Contemporary Amperex Technology - King of the Overweights

Active fund ownership in Contemporary Amperex Technology has risen to peak levels across all 3 investor sets, making it one of the largest...

Steven Holden

Mainland Connect NORTHBOUND Flows (To 24 May 2024): Weak Net Buy, Weak Gross, Idiosyncratic Flows

Weaker volumes, lower nets. NORTHBOUND now clearly buying CATL and Luxshare and finance and utilities. Selling some tech. The question which arises...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Invest in China Growth Equity in High-Rate Environment

​Trump's policies may lead to high US interest rates and a depreciating Renminbi. As remedy outside of buying high dividend stocks, we propose a...

Blue Lotus Research Institute

Contemporary Amperex Technology (300750 CH) 1Q24 Better than Expected

​CATL's 1Q24 net profit exceeded expectations, showing it can maintain profitability despite fears of declining battery prices. Fair value suggests...

Mohshin Aziz

Contemporary Amperex Technology (300750 CH): Cheap Valuations on Negative Sentiments

​CATL's 2Q24 results were good and the outlook is equally encouraging. But share price drift downwards due to negative sentiment. Fundamentals...

Mohshin Aziz

Contemporary Amperex Technology - King of the Overweights

Active fund ownership in Contemporary Amperex Technology has risen to peak levels across all 3 investor sets, making it one of the largest...

Steven Holden

Mainland Connect NORTHBOUND Flows (To 24 May 2024): Weak Net Buy, Weak Gross, Idiosyncratic Flows

Weaker volumes, lower nets. NORTHBOUND now clearly buying CATL and Luxshare and finance and utilities. Selling some tech. The question which arises...

Travis Lundy

Trump's policies may lead to high US interest rates and a depreciating Renminbi. As remedy outside of buying high dividend stocks, we propose a...

CATL's 1Q24 net profit exceeded expectations, showing it can maintain profitability despite fears of declining battery prices. Fair value suggests...

CATL's 2Q24 results were good and the outlook is equally encouraging. But share price drift downwards due to negative sentiment. Fundamentals...