China Internet Weekly (2Dec19): Our Interpretation of AMZN’s Store on PDD

While researching Chinese Internet companies, we frequently come across news that merits being highlighted to investors, however, it is not big enough to warrant a research note. In our "Last Week on China Internet", we have tried to summarize the weekly news flow. If you have any feedback positive/negative please do let us know.

• Amazon.com Inc (AMZN US) will open a temporary store on Pinduoduo (PDD US). We believe PDD is taking advantage of Amazon China's awkward situation and using Amazon's reputation to clean up its public image.
• NetEase Inc (NTES US) is mired in two disputes of employee dismissal after settling one.
• iQIYI Inc (IQ US) is considering raising its membership fees due to financial pressure.
• Many companies are closing out their unsuccessful minor businesses. We believe 2019 is a year for switching from grabbing market shares to salvaging margins.
  

Ratings of our coverage in China:

• Buy: Alibaba (BABA), Tencent (700 HK), JD.com (JD), Meituan (3690), TAL Education (TAL), New Oriental (EDU).
• Hold: NetEase (NTES), Autohome (HTHM), 58.com (WUBA),
• Sell: Tencent Music (TME), Baidu (BIDU), Weibo (WB), Pinduoduo (PDD)