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>PDD: PDD reveals ambitious goal in Temu offline conference (+)</li>
<li>BABA/JD/VIPS/3690.HK: 5% YoY rebound in January/February retail data, but slower than expected (-/-/-/+)</li>
<li>TikTok：TikTok is ready to launch search ads, minior impact to Google</li>
</ul>


PDD: PDD reveals ambitious goal in Temu offline conference (+)
BABA/JD/VIPS/3690.HK: 5% YoY rebound in January/February retail data, but slower than expected (-/-/-/+)
TikTok：TikTok is ready to launch search ads, minior impact to Google


China TMT Update(Mar.16): BABA/JD/PDD/VIPS/TikTok - PDD Reveals Ambitious Goal in Temu Conference

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>Two JD.com departments began to try fresh food front-line warehouse again.</li>
<li>Radio and Television Administration plans to clean the content in short video.</li>
<li>Herman Yu, Baidu’s chief strategy officer and formerly CFO, just resigned.</li>
</ul>


Two JD.com departments began to try fresh food front-line warehouse again.
Radio and Television Administration plans to clean the content in short video.
Herman Yu, Baidu’s chief strategy officer and formerly CFO, just resigned.


China Internet Weekly (6Mar2023): JD, Kuaishou, Baidu, Weibo, Vipshop

<ul>
<li>VIPS reported C4Q22 total revenue largely in line. Non-GAAP net profit beat our est. and cons. by 12%, mainly due to gross margin improvement and reduction in G&amp;A cost. </li>
<li>The loyal customers of Super VIP program and strong focus on apparel category make the platform relatively immune to the pricing competition in eCommerce space.  </li>
<li>Despite intensifying competition, VIPS would maintain stable margin while enjoying gradual return of discretionary spending. Upgrade to BUY with TP of US$16.3, which implied 10x P/2023E.</li>
</ul>


VIPS reported C4Q22 total revenue largely in line. Non-GAAP net profit beat our est. and cons. by 12%, mainly due to gross margin improvement and reduction in G&amp;A cost. 
The loyal customers of Super VIP program and strong focus on apparel category make the platform relatively immune to the pricing competition in eCommerce space.  
Despite intensifying competition, VIPS would maintain stable margin while enjoying gradual return of discretionary spending. Upgrade to BUY with TP of US$16.3, which implied 10x P/2023E.


[Vipshop (VIPS US) Rating Change]: UG to BUY for Immunity from Price War

<ul>
<li>Many newcomers are trying to replicate Shein’s path, but none has proven to be successful, as Shein’s moat in supply chain requires longterm down-to-earth work. </li>
<li>PDD’s Temu will be Shein’s biggest challenger because it is pursuing a different model. Instead of penetrating into the supply chain, Temu offers value-for-money, fair quality products from all categories.</li>
<li>Although Shein’s foundation remains solid (ladies’ apparel + developed countries), growth is slowing down. We reiterate BUY to PDD and BABA and SELL to SE and VIPS after studying Shein.</li>
</ul>


Many newcomers are trying to replicate Shein’s path, but none has proven to be successful, as Shein’s moat in supply chain requires longterm down-to-earth work. 
PDD’s Temu will be Shein’s biggest challenger because it is pursuing a different model. Instead of penetrating into the supply chain, Temu offers value-for-money, fair quality products from all categories.
Although Shein’s foundation remains solid (ladies’ apparel + developed countries), growth is slowing down. We reiterate BUY to PDD and BABA and SELL to SE and VIPS after studying Shein.


Shein Deep Dive:Imitators Perish; Differentiators Flourish

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Event-Driven

<ul>
<li>Today PCAOB announced that they had secured complete access to inspect and investigate Chinese Firms for the first time in history.</li>
<li>This was on back of the Aug 2022 agreement between PCAOB, CSRC and MOF, which was followed up with a Hong Kong visit by PCAOB officials over Sep-Nov 2022.</li>
<li>We wrote about this on 14th Dec 2022 and expected the results to be out on Friday (16th Dec), they have come out a day earlier than we expected.</li>
</ul>


Today PCAOB announced that they had secured complete access to inspect and investigate Chinese Firms for the first time in history.
This was on back of the Aug 2022 agreement between PCAOB, CSRC and MOF, which was followed up with a Hong Kong visit by PCAOB officials over Sep-Nov 2022.
We wrote about this on 14th Dec 2022 and expected the results to be out on Friday (16th Dec), they have come out a day earlier than we expected.


China ADRs Delisting - Christmas Came a Day Earlier than We Expected - No Delisting Risk for Now

China

Vipshop Holdings Ltd. retails branded products at discount over the Internet. The Company retails through flash sales, in which limited quantities of an item are sold at deep discount for a specified period of time.

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Vipshop Holdings (VIPS US)

China TMT Update(Mar.16): BABA/JD/PDD/VIPS/TikTok - PDD Reveals Ambitious Goal in Temu Conference

PDD: Temu announced ambitious goal in an open conference; BABA/JD/PDD/VIPS/3690.HK: Positive rebound in January/February retail data, increased...

Blue Lotus Research Institute

China Internet Weekly (6Mar2023): JD, Kuaishou, Baidu, Weibo, Vipshop

JD.com began to try fresh food front-line warehouse again. Radio and Television Administration plans to clean the content in short video. Herman...

Ming Lu

[Vipshop (VIPS US) Rating Change]: UG to BUY for Immunity from Price War

The loyal customers of Super VIP program and strong focus on apparel category make the platform relatively immune to the pricing competition in...

Blue Lotus Research Institute

Shein Deep Dive:Imitators Perish; Differentiators Flourish

A deep dive into Shein, one of the largest fashion retailers in the world. We give a detailed breakdown to some of the key metrics, and reveal...

Blue Lotus Research Institute

China ADRs Delisting - Christmas Came a Day Earlier than We Expected - No Delisting Risk for Now

Today PCAOB announced that they had secured complete access to inspect and investigate Chinese Firms for the first time in history. This removes...

Sumeet Singh

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