Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy 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>Performance of SU7 so far, margin of EV biz and globalization potential prompted us to take another look at Xiaomi and we like what we saw;</li>
<li>Xiaomi surprised during the Investor Day by guiding SU7 gross margin of 5-10%. Delivery guidance also surprised to ship 100k units in 2024. </li>
<li>We raise EV profitability estimates on margin guidance and expect market share to expand as it expands to SUVs.</li>
</ul>


Performance of SU7 so far, margin of EV biz and globalization potential prompted us to take another look at Xiaomi and we like what we saw;
Xiaomi surprised during the Investor Day by guiding SU7 gross margin of 5-10%. Delivery guidance also surprised to ship 100k units in 2024. 
We raise EV profitability estimates on margin guidance and expect market share to expand as it expands to SUVs.


[Xiaomi (1810 HK, BUY, TP HK$20) Rating Change]: Xiaomi EV Came at the Right Time of Consolidation

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>In 1Q24, Xiaomi and Transsion shipments grew rapidly, while <a href="https://www.smartkarma.com/entities/samsung-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:191:1" rel="noopener">Samsung Electronics (005930 KS)</a> and <a href="https://www.smartkarma.com/entities/apple-inc" target="_blank" data-smartkarma-citation="entities:666:1" rel="noopener">Apple (AAPL US)</a> shrank.</li>
<li>Tims China’s revenue expanded with new openings, which is encouraging in the competitive market.</li>
<li>In China, Tesla fired salespeople who had served the company for less than six months.</li>
</ul>


In 1Q24, Xiaomi and Transsion shipments grew rapidly, while Samsung Electronics (005930 KS) and Apple (AAPL US) shrank.
Tims China’s revenue expanded with new openings, which is encouraging in the competitive market.
In China, Tesla fired salespeople who had served the company for less than six months.


China Consumption Weekly (22 Apr 2024): Xiaomi, Transsion, Tims China, Xpeng, Tesla

<ul>
<li>Xiaomi released healthy financial results inspite of the shrinking market.</li>
<li>Alibaba Freshippo founder, Mr. Hou, retired from his role as the CEO of Freshippo.</li>
<li>JD began to provide aftermarket service to BYD, the largest new energy vehicle producer.</li>
</ul>


Xiaomi released healthy financial results inspite of the shrinking market.
Alibaba Freshippo founder, Mr. Hou, retired from his role as the CEO of Freshippo.
JD began to provide aftermarket service to BYD, the largest new energy vehicle producer.


China Consumption Weekly (25 Mar 2024): Xiaomi, Alibaba, Xpeng, Maoyan, JD Health, JD.com

Senior Credit Analyst, Lucror Analytics

Trung Nguyen

Senior Credit Analyst

High Yield Experts

Lucror Analytics

Lucror Analytics is a leading credit and ESG research specialist and a provider of technology solutions for differentiated fixed income strategies. Our roots are in bottom-up fundamental credit analysis with a specialization in high yield corporate credits from Europe, Asia and Latin America. We are one of few research specialists integrating ESG considerations with fundamental credit research through a dedicated ESG platform. Our ESG assessment covers five key criteria: Disclosure, E,S, & G Pillars, Controversies, ESG Impact on Credit and ESG Momentum.

Recognizing the importance and value-add of Factor Investing in fixed income, Lucror developed the Smart Quant Navigator (SQN), an intuitive platform that helps clients devise and implement factor-based strategies ranging from pure quant to active fundamental, with integrated ESG.

Our company has been at the forefront of developments in the fixed income markets, identifying opportunities and consistently delivering new products and value-adding solutions to clients. Lucror has close relationships with the largest and most reputable asset managers, family offices, hedge funds, investment and wealth managers globally.

Credit

Xiaomi Corp's FY 2023 results were better than expected in our view, with much-improved profitability. The balance sheet remains healthy, and liquidity is sound. We expect the company to continue performing well, driven by a projected recovery in the smartphone market, Xiaomi's premiumisation strategy and strong demand in overseas markets. Global smartphone shipments remain weak, but may be bottoming out. We believe the company is well-positioned for future growth. The smart EV development has drained less cash than we had expected so far. Xiaomi has been able to fund the investment using internal cash flow. Pricing for the SU7 (scheduled to be launched next week) has not been disclosed. The EV market in China is extremely competitive, with over 150 carmakers. Apple has exited the EV business due to a lack of competitive advantage, and Xiaomi may face the same issue. While it is unclear if Xiaomi will be successful in the EV business, we believe it may not be as detrimental to the credit as originally feared.

  Xiaomi Corp's FY 2023 results were better than expected in our view, with much-improved profitability. The balance sheet remains healthy, and liquidity is sound. We expect the company to continue performing well, driven by a projected recovery in the smartphone market, Xiaomi's premiumisation strategy and strong demand in overseas markets. Global smartphone shipments remain weak, but may be bottoming out. We believe the company is well-positioned for future growth.   The smart EV development has drained less cash than we had expected so far. Xiaomi has been able to fund the investment using internal cash flow. Pricing for the SU7 (scheduled to be launched next week) has not been disclosed. The EV market in China is extremely competitive, with over 150 carmakers. Apple has exited the EV business due to a lack of competitive advantage, and Xiaomi may face the same issue. While it is unclear if Xiaomi will be successful in the EV business, we believe it may not be as detrimental to the credit as originally feared. 

Xiaomi Corp - Earnings Flash - FY 2023 Results - Lucror Analytics

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>The Hang Seng Tech Index is more widely-followed than many think, and it is reasonably concentrated, so outperformance and underperformance by big names means capping and re-capping.</li>
<li>This time, those flows are worth about 8% of the index in terms of one-way flows. Meituan, Xiaomi, JD.com, Tencent and Kuaishou Tech DOWN. Li Auto back up. </li>
<li>Those who have pre-positioned on the big buy have recently gotten hurt. There are some FAF changes which are less predictable and may be interesting.</li>
</ul>


The Hang Seng Tech Index is more widely-followed than many think, and it is reasonably concentrated, so outperformance and underperformance by big names means capping and re-capping.
This time, those flows are worth about 8% of the index in terms of one-way flows. Meituan, Xiaomi, JD.com, Tencent and Kuaishou Tech DOWN. Li Auto back up. 
Those who have pre-positioned on the big buy have recently gotten hurt. There are some FAF changes which are less predictable and may be interesting.


HSTECH June 2024 Rebal - No Changes But Big Capping Flows, As Expected; 8% US$1.6bn One-Way

China

Xiaomi Corporation manufactures communication equipment and parts. The Company produces and sells mobile phones, smart phone software,  set-top boxes, and related accessories. Xiaomi markets its products worldwide.

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Xiaomi Corp (1810 HK)

[Xiaomi (1810 HK, BUY, TP HK$20) Rating Change]: Xiaomi EV Came at the Right Time of Consolidation

Xiaomi surprised during the Investor Day by guiding SU7 gross margin of 5-10%. Delivery guidance also surprised to ship 100k units in 2024.

Blue Lotus Research Institute

China Consumption Weekly (22 Apr 2024): Xiaomi, Transsion, Tims China, Xpeng, Tesla

In 1Q24, Xiaomi and Transsion shipments grew rapidly. Tims China’s revenue expanded with new openings. In China, Tesla fired salespeople.

Ming Lu

China Consumption Weekly (25 Mar 2024): Xiaomi, Alibaba, Xpeng, Maoyan, JD Health, JD.com

Xiaomi released healthy financial results despite of the shrinking market. Alibaba Freshippo founder retired. JD began to provide aftermarket...

Ming Lu

Xiaomi Corp - Earnings Flash - FY 2023 Results - Lucror Analytics

Xiaomi Corp's FY 2023 results were better than expected in our view, with much-improved profitability. The balance sheet remains healthy, and...

Lucror Analytics

HSTECH June 2024 Rebal - No Changes But Big Capping Flows, As Expected; 8% US$1.6bn One-Way

Quiddity did not expect any name changes to the HSTECH index in June 2024 but we expected big flows because of significant capping impact, mostly...

Travis Lundy

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