Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Thematic (Sector/Industry)

<ul>
<li>Update on the US postage fraud case we reported on earlier: it's far more expansive than previously reported, and last week the judge ordered that the trial begin in August</li>
<li>A new report from the US Congress attacks Temu, SHEIN on two fronts: Xinjiang-made goods and <em>de minimus</em> imports; tighter enforcement or new legislation could soon follow</li>
<li>It's unclear how the postage fraud case and growing Congressional concerns will play out; worst-case, both could dramatically undermine the direct-to-US consumer business model</li>
</ul>


Update on the US postage fraud case we reported on earlier: it's far more expansive than previously reported, and last week the judge ordered that the trial begin in August
A new report from the US Congress attacks Temu, SHEIN on two fronts: Xinjiang-made goods and de minimus imports; tighter enforcement or new legislation could soon follow
It's unclear how the postage fraud case and growing Congressional concerns will play out; worst-case, both could dramatically undermine the direct-to-US consumer business model


New Developments in Postage Fraud Case and US Congress Could Create Big Obstacles for Temu, SHEIN

<ul>
<li>The scale of fraud in a new US federal criminal complaint – US$60M of fake postage – mirrors the recent dramatic growth of Chinese e-commerce platforms that target US consumers</li>
<li>The case also highlights the importance of securing cheap last-mile US distribution for the Chinese e-commerce platforms selling inexpensive goods directly to US consumers</li>
<li>It’s unclear which of the Chinese platforms benefited from the scheme, but the incident should refocus investors’ attention on logistics as a critical piece of their business models </li>
</ul>


The scale of fraud in a new US federal criminal complaint – US$60M of fake postage – mirrors the recent dramatic growth of Chinese e-commerce platforms that target US consumers
The case also highlights the importance of securing cheap last-mile US distribution for the Chinese e-commerce platforms selling inexpensive goods directly to US consumers
It’s unclear which of the Chinese platforms benefited from the scheme, but the incident should refocus investors’ attention on logistics as a critical piece of their business models 


The Curious Case of $60M of Bogus US Postage or 'How Can They Can Make Money Exporting $5 Shirts?!'

China New Economy Equity Analyst, Blue Lotus Research Institute

Robert McKay

China New Economy Equity Analyst

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

<ul>
<li>Following a year of pure low-price competition, e-commerce platforms are shifting towards providing better services to customers - the major focus of this upgrade has been logistics. </li>
<li>This shift has has manifested through (1) the opening of Taobao/Tmall's merchant back-end to JD Logistics, (2) the resurgence of O2O, and (3) algorithm weighting tilt towards higher-scoring merchants.</li>
<li>Amid this shift we prefer JD Logistics (2618 HK) followed by ZTO (ZTO US). We are most negative towards S.F. Holding (002352 CH) followed by J&amp;T Express (1519 HK).</li>
</ul>


Following a year of pure low-price competition, e-commerce platforms are shifting towards providing better services to customers - the major focus of this upgrade has been logistics. 
This shift has has manifested through (1) the opening of Taobao/Tmall's merchant back-end to JD Logistics, (2) the resurgence of O2O, and (3) algorithm weighting tilt towards higher-scoring merchants.
Amid this shift we prefer JD Logistics (2618 HK) followed by ZTO (ZTO US). We are most negative towards S.F. Holding (002352 CH) followed by J&amp;T Express (1519 HK).


Major Changes in China's Last-Mile Delivery Market: Who Wins, Who Loses?

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

<ul>
<li>Macro News Update: Weak Household Loan Data in September Highlights Urgency for Consumption Stimulus</li>
<li>Macro News Update : Scholars within China's government system indicates more incremental stimulus policies are on the way.</li>
<li>Macro News Update : Positive read thru on the Ministry of Finance press release(+)</li>
</ul>


Macro News Update: Weak Household Loan Data in September Highlights Urgency for Consumption Stimulus
Macro News Update : Scholars within China's government system indicates more incremental stimulus policies are on the way.
Macro News Update : Positive read thru on the Ministry of Finance press release(+)


[Blue Lotus Daily]:1810 HK/1211HK/LI US/NIO US/XPEV US/MNSO US/ATAT US/002352 CH/2618HK/ZTO US/Macro

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

<ul>
<li>TCOM US: Overseas Travel for National Holiday Grow Faster than Domestic Travel, Potentially Signaling the End of Consumption Downgrading (+)</li>
<li>PDD US: PDD announces another support plan for “quality merchants” (/)</li>
<li>BABA US/JD US/002352 CH: E-commerce players intensify logistics competition in Hong Kong (////-)</li>
</ul>


TCOM US: Overseas Travel for National Holiday Grow Faster than Domestic Travel, Potentially Signaling the End of Consumption Downgrading (+)
PDD US: PDD announces another support plan for “quality merchants” (/)
BABA US/JD US/002352 CH: E-commerce players intensify logistics competition in Hong Kong (////-)


[Blue Lotus Daily-TMT Update]:TCOMUS/PDDUS/BABA/JD/002352CH/700HK/NTES/BILI/002624CH/3888HK/3690HK

Hong Kong

S.F. Holding Co., Ltd operates as a holding company. The Company, through its subsidiaries, provides logistics, order tracking, supply chain management, and warehousing services. S.F. Holding operates worldwide.

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S.F. Holding (6936 HK)

New Developments in Postage Fraud Case and US Congress Could Create Big Obstacles for Temu, SHEIN

We offer an update on a fascinating criminal case set to go to trial next month, plus we outline big risks posed by criticisms of Temu and SHEIN by...

Tracking Traffic

The Curious Case of $60M of Bogus US Postage or 'How Can They Can Make Money Exporting $5 Shirts?!'

Thie story of fake US postage being used to distribute Chinese goods to US consumers isn't just a fascinating story -- it could potentially have...

Tracking Traffic

Major Changes in China's Last-Mile Delivery Market: Who Wins, Who Loses?

E-commerce platforms are prioritizing better customer service through logistics upgrades, with JD Logistics and ZTO as top picks and S.F. Holding...

Blue Lotus Research Institute

[Blue Lotus Daily]:1810 HK/1211HK/LI US/NIO US/XPEV US/MNSO US/ATAT US/002352 CH/2618HK/ZTO US/Macro

Household loan data in China highlights need for consumption stimulus; more incremental policies expected. Positive outlook on Ministry of Finance...

Blue Lotus Research Institute

[Blue Lotus Daily-TMT Update]:TCOMUS/PDDUS/BABA/JD/002352CH/700HK/NTES/BILI/002624CH/3888HK/3690HK

Overseas travel for national holidays on the rise, signaling potential end to consumption downgrading. PDD announces support plan for quality...

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

New Developments in Postage Fraud Case and US Congress Could Create Big Obstacles for Temu, SHEIN

We offer an update on a fascinating criminal case set to go to trial next month, plus we outline big risks posed by criticisms of Temu and SHEIN by...

Tracking Traffic

The Curious Case of $60M of Bogus US Postage or 'How Can They Can Make Money Exporting $5 Shirts?!'

Thie story of fake US postage being used to distribute Chinese goods to US consumers isn't just a fascinating story -- it could potentially have...

Tracking Traffic

Major Changes in China's Last-Mile Delivery Market: Who Wins, Who Loses?

​E-commerce platforms are prioritizing better customer service through logistics upgrades, with JD Logistics and ZTO as top picks and S.F. Holding...

Blue Lotus Research Institute

[Blue Lotus Daily]:1810 HK/1211HK/LI US/NIO US/XPEV US/MNSO US/ATAT US/002352 CH/2618HK/ZTO US/Macro

​Household loan data in China highlights need for consumption stimulus; more incremental policies expected. Positive outlook on Ministry of Finance...

Blue Lotus Research Institute

[Blue Lotus Daily-TMT Update]:TCOMUS/PDDUS/BABA/JD/002352CH/700HK/NTES/BILI/002624CH/3888HK/3690HK

​Overseas travel for national holidays on the rise, signaling potential end to consumption downgrading. PDD announces support plan for quality...

Blue Lotus Research Institute

E-commerce platforms are prioritizing better customer service through logistics upgrades, with JD Logistics and ZTO as top picks and S.F. Holding...

Household loan data in China highlights need for consumption stimulus; more incremental policies expected. Positive outlook on Ministry of Finance...

Overseas travel for national holidays on the rise, signaling potential end to consumption downgrading. PDD announces support plan for quality...