Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet 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

Equity Bottom-Up

<ul>
<li>PDD reported C2Q24 top line, non-GAAP operating income and GAAP net income (3.9%), (1.2%) and (4.4%) below our estimates, and (2.9%), 12% and 16% above consensus. </li>
<li>We believe PDD's upgrade in its ecosystem and infrastructure is long overdue. Such investment would support its growth, especially in overseas. </li>
<li>Trading at 6.4x 2025 PE, we believe PDD is undervalued. We reiterate BUY and place it as TOP PICK of China's e-commerce sector.</li>
</ul>


PDD reported C2Q24 top line, non-GAAP operating income and GAAP net income (3.9%), (1.2%) and (4.4%) below our estimates, and (2.9%), 12% and 16% above consensus. 
We believe PDD's upgrade in its ecosystem and infrastructure is long overdue. Such investment would support its growth, especially in overseas. 
Trading at 6.4x 2025 PE, we believe PDD is undervalued. We reiterate BUY and place it as TOP PICK of China's e-commerce sector.


[Pinduoduo (PDD US, BUY, TP US$160) TP Change]: Investment Means Continued High Growth

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>PDD Holdings (PDD) announced (26 Aug) 2Q24 results: revenue was up 86% YoY (2Q23: 66%; 1Q24: 131%) to RMB97.1bn, 3% shy of Bloomberg consensus estimates.</li><li>Both online marketing services and others and transaction services fees were 3% short of consensus, which in our view can be attributed to intensified industry competition, but should be partly anticipated.</li><li>Non-GAAP net profit increased by 126% YoY to RMB34.4bn, 14% ahead of consensus.</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

PDD Holdings (PDD) announced (26 Aug) 2Q24 results: revenue was up 86% YoY (2Q23: 66%; 1Q24: 131%) to RMB97.1bn, 3% shy of Bloomberg consensus estimates.Both online marketing services and others and transaction services fees were 3% short of consensus, which in our view can be attributed to intensified industry competition, but should be partly anticipated.Non-GAAP net profit increased by 126% YoY to RMB34.4bn, 14% ahead of consensus.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

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.

<ul>
<li>The stock plunged today after the announcement of excellent performance for 2Q24.</li>
<li>In 2Q24, revenue grew by 86% YoY and the operating margin improved 10 percentage points YoY.</li>
<li>We believe investors should buy, as it is just a tactic from major stock sellers.</li>
</ul>


The stock plunged today after the announcement of excellent performance for 2Q24.
In 2Q24, revenue grew by 86% YoY and the operating margin improved 10 percentage points YoY.
We believe investors should buy, as it is just a tactic from major stock sellers.


PDD (PDD US): Stock Plunged After Excellent 2Q24 Result – Your Time to Buy

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>Ownership levels among Asia Ex-Japan funds hit record highs as funds continue to add exposure.</li>
<li>13% of the funds in our analysis opened new positions over the last 6-months, with average weights increasing by 0.57%</li>
<li>New positions added by Invesco Asia Opportunities (4.3%), LO Funds High Conviction (3.6%) and Allianz Asian Equity (2.9%) over the period.</li>
</ul>


Ownership levels among Asia Ex-Japan funds hit record highs as funds continue to add exposure.
13% of the funds in our analysis opened new positions over the last 6-months, with average weights increasing by 0.57%
New positions added by Invesco Asia Opportunities (4.3%), LO Funds High Conviction (3.6%) and Allianz Asian Equity (2.9%) over the period.


Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Capital Markets

<ul>
<li>A recent report shows apparent gains by Temu against US "dollar" store chains</li>
<li>In this insight we introduce the "dollar" store concept and share our experiences</li>
<li>We conclude that Temu &amp; SHEIN don't likely view some categories as priorities</li>
</ul>


A recent report shows apparent gains by Temu against US "dollar" store chains
In this insight we introduce the "dollar" store concept and share our experiences
We conclude that Temu &amp; SHEIN don't likely view some categories as priorities


Temu Versus Dollar Tree: More Online & Offline Adventures in Pursuit of Ultra-Cheap Stuff

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)

[Pinduoduo (PDD US, BUY, TP US$160) TP Change]: Investment Means Continued High Growth

PDD's recent financials missed estimates but investment in infrastructure and growth potential make it an undervalued top pick in China's e...

Blue Lotus Research Institute