Blue Lotus Research Institute

Andy Fu

China growth and global non-US Internet equities

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>During the upcoming Dragon Boat Festival, both flight and railway traffic seems sluggish, indicating a cooled-down enthusiasm for long-distance trips due to budget constraints.</li>
<li>Data points to booming short-distance travel with self-driving as the major means, helped by lower price;</li>
<li>Benefiting from hotel booking and catering, Meituan is the biggest beneficiary of such consumption downgrade.</li>
</ul>


During the upcoming Dragon Boat Festival, both flight and railway traffic seems sluggish, indicating a cooled-down enthusiasm for long-distance trips due to budget constraints.
Data points to booming short-distance travel with self-driving as the major means, helped by lower price;
Benefiting from hotel booking and catering, Meituan is the biggest beneficiary of such consumption downgrade.


Meituan Is the Biggest Beneficiary of China's Domestic Travel Recovery

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>SOUTHBOUND was again a net buyer for HK$18.6bn on strong two-way volumes. The top three net buys of the week were SOE banks. Some may be Central Huijin.</li>
<li>Some of this may be driven by the dividend w/h tax cancellation on H divs and by significant H-share discounts, but high-div CNOOC was the biggest net sell.</li>
<li>No end to the inflows, and HK valuations are not at a place where they would hamper continued flows. Alibaba making HK a Primary will spur more inflows over time.</li>
</ul>


SOUTHBOUND was again a net buyer for HK$18.6bn on strong two-way volumes. The top three net buys of the week were SOE banks. Some may be Central Huijin.
Some of this may be driven by the dividend w/h tax cancellation on H divs and by significant H-share discounts, but high-div CNOOC was the biggest net sell.
No end to the inflows, and HK valuations are not at a place where they would hamper continued flows. Alibaba making HK a Primary will spur more inflows over time.


HK Connect SOUTHBOUND Flows (To 24 May 2024); Strong Bank Buying and Tech Selling Continues

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

<ul>
<li>We notice a pickup in consumer acceptance of instrashopping, as result of COVID-cultivated behavior. We notice similar business model worked outside of China (Coupang) for densely populated urban upper-middle-class customers;</li>
<li>Meituan's launch of membership is a wise step towards strengthening user stickiness and emphasizing transaction soundness over impulsive buying. Meituan's portfolio in food, dining, hotel &amp; travel offer unparalleled value;</li>
<li>We see Meituan's success in Hong Kong honed a replicable business model targeting single and low priced segment. Consolation on a global scale now seems a possibility.</li>
</ul>


We notice a pickup in consumer acceptance of instrashopping, as result of COVID-cultivated behavior. We notice similar business model worked outside of China (Coupang) for densely populated urban upper-middle-class customers;
Meituan's launch of membership is a wise step towards strengthening user stickiness and emphasizing transaction soundness over impulsive buying. Meituan's portfolio in food, dining, hotel &amp; travel offer unparalleled value;
We see Meituan's success in Hong Kong honed a replicable business model targeting single and low priced segment. Consolation on a global scale now seems a possibility.


Meituan (3690 HK): Out of the Woods and Light a Fire

<ul>
<li>Shareholders of <a href="https://www.smartkarma.com/entities/prosus-nv" target="_blank" data-smartkarma-citation="entities:28104:1" rel="noopener">Prosus NV (PRX NA)</a> and <a href="https://www.smartkarma.com/entities/naspers-ltd" target="_blank" data-smartkarma-citation="entities:21085:1" rel="noopener">Naspers (NPN SJ)</a> approved AGM agenda items late last week to enable the two Capitalisation Issues and Naspers' Share Consolidation to move forward.</li>
<li>What Will Happen: Prosus will issue new N shares to its shareholders and Naspers will reject them. Naspers will issue new shares to its shareholders, and Prosus will reject them.</li>
<li>Naspers will own ~42.9% of Prosus, Prosus will own 0.02% of Naspers. Sales of Tencent shares will continue. Share Buybacks too. But the ouroboros will have spit out its tail. </li>
</ul>


Shareholders of Prosus NV (PRX NA) and Naspers (NPN SJ) approved AGM agenda items late last week to enable the two Capitalisation Issues and Naspers' Share Consolidation to move forward.
What Will Happen: Prosus will issue new N shares to its shareholders and Naspers will reject them. Naspers will issue new shares to its shareholders, and Prosus will reject them.
Naspers will own ~42.9% of Prosus, Prosus will own 0.02% of Naspers. Sales of Tencent shares will continue. Share Buybacks too. But the ouroboros will have spit out its tail. 


Prosus/Naspers - The ουροβóρος Is Dead! Long Live The Ouroboros!

China/Asia TMT

Shawn Yang

<ul>
<li>We upgrade Meituan to BUY as (1) its recent subsidy campaign vs. Douyin has achieved some  successes, and (2) its food delivery margin may have further upside; </li>
<li>We suggest that Douyin’s local service market share reaches a high level, especially when compared with its eCommerce market share; </li>
<li>Our C1Q23 top/bottom line are in-line/25.5% vs. cons. Raise TP to HK$ 165, which implies 4x PS/12x PE/1x PS for delivery/in-store/new initiatives.</li>
</ul>


We upgrade Meituan to BUY as (1) its recent subsidy campaign vs. Douyin has achieved some  successes, and (2) its food delivery margin may have further upside; 
We suggest that Douyin’s local service market share reaches a high level, especially when compared with its eCommerce market share; 
Our C1Q23 top/bottom line are in-line/25.5% vs. cons. Raise TP to HK$ 165, which implies 4x PS/12x PE/1x PS for delivery/in-store/new initiatives.


[Meituan (3690 HK) Rating Change]: Meituan’s Counterstrike Is Effective, Upgrade to BUY

China

Meituan operates as a web based shopping platform for locally found consumer products and retail services. The Company offers deals of the day by selling vouchers on local services and entertainment, dining, delivery, and other services. Meituan provides its services throughout China.

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Meituan (3690 HK)

Meituan Is the Biggest Beneficiary of China's Domestic Travel Recovery

Consumer enthusiasm for long-distance trips during the Dragon Boat Festival has cooled. Short-distance tours are popular, benefiting low-cost...

Blue Lotus Research Institute

HK Connect SOUTHBOUND Flows (To 24 May 2024); Strong Bank Buying and Tech Selling Continues

SOUTHBOUND flows continue to be strong. This week saw nearly HK$8bn bought on Banks and banks were top inflows. Some of this may be National Team...

Travis Lundy

Meituan (3690 HK): Out of the Woods and Light a Fire

Meituan plans to launch a comprehensive membership program as it extends instrashopping from grocery to daily goods, positive for its profit...

Blue Lotus Research Institute

Prosus/Naspers - The ουροβóρος Is Dead! Long Live The Ouroboros!

The Prosus/Naspers Ouroboros is Dead. Long live the Prosus/Naspers Ouroboros. Prosus is an Accretion Engine. Know it. Use it.

Travis Lundy

[Meituan (3690 HK) Rating Change]: Meituan’s Counterstrike Is Effective, Upgrade to BUY

We upgrade Meituan to BUY as (1) its recent subsidy campaign vs. Douyin has achieved some successes, and (2) its food delivery margin may have...

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Meituan Is the Biggest Beneficiary of China's Domestic Travel Recovery

​Consumer enthusiasm for long-distance trips during the Dragon Boat Festival has cooled. Short-distance tours are popular, benefiting low-cost...

Blue Lotus Research Institute

HK Connect SOUTHBOUND Flows (To 24 May 2024); Strong Bank Buying and Tech Selling Continues

SOUTHBOUND flows continue to be strong. This week saw nearly HK$8bn bought on Banks and banks were top inflows. Some of this may be National Team...

Travis Lundy

Meituan (3690 HK): Out of the Woods and Light a Fire

​Meituan plans to launch a comprehensive membership program as it extends instrashopping from grocery to daily goods, positive for its profit...

Blue Lotus Research Institute

Prosus/Naspers - The ουροβóρος Is Dead! Long Live The Ouroboros!

The Prosus/Naspers Ouroboros is Dead. Long live the Prosus/Naspers Ouroboros. Prosus is an Accretion Engine. Know it. Use it.

Travis Lundy

[Meituan (3690 HK) Rating Change]: Meituan’s Counterstrike Is Effective, Upgrade to BUY

We upgrade Meituan to BUY as (1) its recent subsidy campaign vs. Douyin has achieved some successes, and (2) its food delivery margin may have...

Blue Lotus Research Institute

Consumer enthusiasm for long-distance trips during the Dragon Boat Festival has cooled. Short-distance tours are popular, benefiting low-cost...

Meituan plans to launch a comprehensive membership program as it extends instrashopping from grocery to daily goods, positive for its profit...