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>Amid demand by consumers for cost effective items, we expect that demand for discounted apparel will sustain into 2024...</li>
<li>We expect high levels of apparel sales continued in December, as VIPS reported double-digit GMV growth for various types of winter related apparel items during 12/12...</li>
<li>China’s cost-conscious spending environment favors VIPS, in our view. We maintain BUY and raise TP to US$ 18.1, implying 7x FY24 non-GAAP P/E.</li>
</ul>


Amid demand by consumers for cost effective items, we expect that demand for discounted apparel will sustain into 2024...
We expect high levels of apparel sales continued in December, as VIPS reported double-digit GMV growth for various types of winter related apparel items during 12/12...
China’s cost-conscious spending environment favors VIPS, in our view. We maintain BUY and raise TP to US$ 18.1, implying 7x FY24 non-GAAP P/E.


[Vipshop (VIPS US, BUY, TP US$18.1) TP Change]: Discount Offerings Remain Hot Given Cold Consumption

Greater China Equity Long/Short Analyst

Eric Chen

<ul>
<li>Over the last decade, VIPShop proved it is the undisputed leader in China’s online discount retail business with the longest streak of profitability and impressive ROE among China internet names.</li>
<li>Investors are misplaced to look to the stock for growth. Rather, it is cash cow in mature business with deep moat and run by disciplined management who cares about shareholders.</li>
<li>Trading at 4.5x our FY23 earnings excluding net cash, it valuation is attractive even compared to depressed sector comps. Expect 20% CAGR of return by 2025 driven by intrinsic value.</li>
</ul>


Over the last decade, VIPShop proved it is the undisputed leader in China’s online discount retail business with the longest streak of profitability and impressive ROE among China internet names.
Investors are misplaced to look to the stock for growth. Rather, it is cash cow in mature business with deep moat and run by disciplined management who cares about shareholders.
Trading at 4.5x our FY23 earnings excluding net cash, it valuation is attractive even compared to depressed sector comps. Expect 20% CAGR of return by 2025 driven by intrinsic value.


VIPShop (VIPS US): Attractive Value Play Underappreciated by Investors Looking for Growth

<ul>
<li>Koolearn’s successful transformation into a live-streaming e-commerce business showcased outstanding entrepreneurship and leadership of its founder Michael Yu, whom we highly respect.</li>
<li>That said, we expect its growth to decelerate materially after hitting RMB18 billion GMV by 2024. We value Koolearn at RMB36 billion (20% downside), drawing reference to VIPShop growth trajectory.</li>
<li>While high-frequency data on live-streaming business will drive near-term stock price (and potentially to the upside), its current valuation doesn’t pay off for long -term investors in our view.</li>
</ul>


Koolearn’s successful transformation into a live-streaming e-commerce business showcased outstanding entrepreneurship and leadership of its founder Michael Yu, whom we highly respect.
That said, we expect its growth to decelerate materially after hitting RMB18 billion GMV by 2024. We value Koolearn at RMB36 billion (20% downside), drawing reference to VIPShop growth trajectory.
While high-frequency data on live-streaming business will drive near-term stock price (and potentially to the upside), its current valuation doesn’t pay off for long -term investors in our view.


Koolearn (1797 HK): Don't Overpay for Growth

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

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.

Event-Driven

<ul>
<li>On 2nd Dec 2021, Securities Exchange Commission (SEC) issued Final amendments to implement the Holding Foreign Companies Accountable Act (HFCAA).</li>
<li>On 24th Mar 2021, SEC had issued Amendments, Seeks Public Comment on HFCAA. This was a follow up on the HFCAA.</li>
<li>In this note, we'll talk about the final amendments and its possible timelines and implications, and a possible trade setup.</li>
</ul>


On 2nd Dec 2021, Securities Exchange Commission (SEC) issued Final amendments to implement the Holding Foreign Companies Accountable Act (HFCAA).
On 24th Mar 2021, SEC had issued Amendments, Seeks Public Comment on HFCAA. This was a follow up on the HFCAA.
In this note, we'll talk about the final amendments and its possible timelines and implications, and a possible trade setup.


China ADRs Delisting - US Tightens and HK Loosens Requirements - Long/Short Basket Trade

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Alibaba Group Holding  / Equity Bottom-Up

<ul>
<li>Nikkei reports that a high ranking CCP official has suggested that the platforms possessing personal data should return around 20-30% of the revenue generated to the common prosperity cause. </li>
<li>We expect big tech to lose competitiveness as the government takes control of the use of personal data. Meanwhile the Chinese economic slowdown is a double blow to big tech. </li>
<li>If remaining investors lose faith and exit, big tech can trade at around 1.0-1.5x price to book in the next few years.</li>
</ul>


Nikkei reports that a high ranking CCP official has suggested that the platforms possessing personal data should return around 20-30% of the revenue generated to the common prosperity cause. 
We expect big tech to lose competitiveness as the government takes control of the use of personal data. Meanwhile the Chinese economic slowdown is a double blow to big tech. 
If remaining investors lose faith and exit, big tech can trade at around 1.0-1.5x price to book in the next few years.


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.

Price Gauge
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Vipshop Holdings (VIPS US)

[Vipshop (VIPS US, BUY, TP US$18.1) TP Change]: Discount Offerings Remain Hot Given Cold Consumption

Consumer demand for discounted apparel is expected to continue into 2024, benefiting VIPS in China's cost-conscious spending environment.

Blue Lotus Research Institute

VIPShop (VIPS US): Attractive Value Play Underappreciated by Investors Looking for Growth

As a cash cow with deep moat run by disciplined management who cares shareholders, VIPShop is an attractive value play trading at 4.5x our FY23...

Eric Chen

Koolearn (1797 HK): Don't Overpay for Growth

We draw reference to VIPShop and value Koolearn at RMB36 billion by 2024 – 20% downside to its current valuation, based on 20x PE on RMB1.8 billion...

Eric Chen

China ADRs Delisting - US Tightens and HK Loosens Requirements - Long/Short Basket Trade

On 2nd Dec 2021, SEC issued Final amendments to implement the Holding Foreign Companies Accountable Act. In this note we will talk about the final...

Sumeet Singh

China Considering a Data Tax on Big Tech

Investors are starting to rethink their investments in the Chinese tech space and the idea that investors should avoid Chinese tech stocks amidst...

Oshadhi Kumarasiri

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Vipshop (VIPS US, BUY, TP US$18.1) TP Change]: Discount Offerings Remain Hot Given Cold Consumption

​Consumer demand for discounted apparel is expected to continue into 2024, benefiting VIPS in China's cost-conscious spending environment.

Blue Lotus Research Institute

VIPShop (VIPS US): Attractive Value Play Underappreciated by Investors Looking for Growth

As a cash cow with deep moat run by disciplined management who cares shareholders, VIPShop is an attractive value play trading at 4.5x our FY23...

Eric Chen

Koolearn (1797 HK): Don't Overpay for Growth

We draw reference to VIPShop and value Koolearn at RMB36 billion by 2024 – 20% downside to its current valuation, based on 20x PE on RMB1.8 billion...

Eric Chen

China ADRs Delisting - US Tightens and HK Loosens Requirements - Long/Short Basket Trade

On 2nd Dec 2021, SEC issued Final amendments to implement the Holding Foreign Companies Accountable Act. In this note we will talk about the final...

Sumeet Singh

China Considering a Data Tax on Big Tech

Investors are starting to rethink their investments in the Chinese tech space and the idea that investors should avoid Chinese tech stocks amidst...

Oshadhi Kumarasiri

Consumer demand for discounted apparel is expected to continue into 2024, benefiting VIPS in China's cost-conscious spending environment.