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

Alibaba Group Holding Limited provides online sales services. The Company provides internet infrastructure, electronic commerce, online financial, and internet content services through its subsidiaries. Alibaba Group Holding offers its products and services worldwide.

<ul>
<li>US as the world’s largest service economy means artificial general intelligence (AGI) saves cost by replacing knowledge workers. </li>
<li>China’s AI monetization is today 1/3 of US but will improve to 1/2 by 2030. </li>
<li>We reiterate our TOP PICKS of Alibaba, HESAI, CATL and Kuaishou. BIDU stays as SELL.</li>
</ul>


US as the world’s largest service economy means artificial general intelligence (AGI) saves cost by replacing knowledge workers. 
China’s AI monetization is today 1/3 of US but will improve to 1/2 by 2030. 
We reiterate our TOP PICKS of Alibaba, HESAI, CATL and Kuaishou. BIDU stays as SELL.


[Blue Lotus Sector Update]: How Will China Monetize AI Differently?

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

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.

<ul>
<li>Xiaomi reported C2Q25 top line, non-IFRS operating profit and IFRS net income (2.3%), (0.5%) and 41% vs. our estimates, and in-line, (14%) and 31% vs. consensus. </li>
<li>Xiaomi's growth strategy is to replicate its brand success from smartphones to appliances and EV's and from China to the rest of the world. </li>
<li>We raise TP from HK$56 to 61 and place Xiaomi into TOP BUY list.</li>
</ul>


Xiaomi reported C2Q25 top line, non-IFRS operating profit and IFRS net income (2.3%), (0.5%) and 41% vs. our estimates, and in-line, (14%) and 31% vs. consensus. 
Xiaomi's growth strategy is to replicate its brand success from smartphones to appliances and EV's and from China to the rest of the world. 
We raise TP from HK$56 to 61 and place Xiaomi into TOP BUY list.


[Xiaomi Inc. (1810 HK, BUY, TP HK$61) TP Change]: C2Q25 Review: Getting into the Brand Expansion Era

<ul>
<li>Alibaba (BABA) reported C2Q25 top line, non-GAAP op. profit and GAAP net income (4.3%), (10%) and 7.7% vs. our est. and (2.2%), 20% and 9.5% vs. cons.. </li>
<li>As stated in our previous reports, we believe O2O e-commerce will constitute ~20% of China's e-commerce and BABA will capture ~50%. </li>
<li>We maintain BABA's TOP BUY classification and raise TP to US$181</li>
</ul>


Alibaba (BABA) reported C2Q25 top line, non-GAAP op. profit and GAAP net income (4.3%), (10%) and 7.7% vs. our est. and (2.2%), 20% and 9.5% vs. cons.. 
As stated in our previous reports, we believe O2O e-commerce will constitute ~20% of China's e-commerce and BABA will capture ~50%. 
We maintain BABA's TOP BUY classification and raise TP to US$181


[Alibaba (BABA US, BUY, TP US$181) Target Price Change]: C2Q25 Review: Who Will Rescue Meituan?

KE Holdings Inc. operates as an integrated online and offline platform for housing transactions and services. The Company offers existing and new home sales, home rentals, home renovation, real estate financial solutions, and other services. KE Holdings conducts businesses in China.

<ul>
<li>Beike (BEKE) reported C2Q25 top line, non-GAA op. profit and GAAP net income (2.5%), (43%) and (3.0%) vs. our est. </li>
<li>Since a strong start in C1Q25, both new and existing home sales growth have trended down after early March, against a weak 2024. </li>
<li>We cut TP by US$1 to US$24 and maintain BUY.</li>
</ul>


Beike (BEKE) reported C2Q25 top line, non-GAA op. profit and GAAP net income (2.5%), (43%) and (3.0%) vs. our est. 
Since a strong start in C1Q25, both new and existing home sales growth have trended down after early March, against a weak 2024. 
We cut TP by US$1 to US$24 and maintain BUY.


[KE Holdings Inc. (BEKE US, BUY, TP US$24) TP Change]: The Old China Braces for Turbulence & Change

XPeng Inc. designs, produces, and distributes electric vehicles. The Company designs, develops, manufactures and markets smart smart electric vehicles, as well as finance, parts, and maintenance services. XPeng serves customers in China.

<ul>
<li>XPeng reported C2Q25 top line, non-GAAP operating loss and GAAP net loss (5.4%), 28% wider and 10% narrower than our estimate and (2.2%), 13% narrower and 49% narrower than consensus. </li>
<li>Vehicle gross margin beat our estimate by 2.3ppt, consensus by 1.7ppt, and improved 14ppt YoY and 1.8% QoQ. XPEV guided for breakeven in C4Q25;</li>
<li>We reiterate our TOP BUY on XPEV with TP unchanged.</li>
</ul>


XPeng reported C2Q25 top line, non-GAAP operating loss and GAAP net loss (5.4%), 28% wider and 10% narrower than our estimate and (2.2%), 13% narrower and 49% narrower than consensus. 
Vehicle gross margin beat our estimate by 2.3ppt, consensus by 1.7ppt, and improved 14ppt YoY and 1.8% QoQ. XPEV guided for breakeven in C4Q25;
We reiterate our TOP BUY on XPEV with TP unchanged.


[XPeng Inc. (XPEV US, BUY, TP US$28) Review]: When Margin and Cash Is Right, Growth Is Secondary

Blue Lotus Research Institute
China growth and global non-US Internet equities

[Blue Lotus Sector Update]: How Will China Monetize AI Differently?

AGI will replace knowledge workers in the US service economy, while China's AI monetization is on track to catch up to the US by 2030.

Blue Lotus Research Institute

[Xiaomi Inc. (1810 HK, BUY, TP HK$61) TP Change]: C2Q25 Review: Getting into the Brand Expansion Era

Xiaomi beats estimates, plans to expand brand success beyond smartphones to appliances and EV's worldwide, leading to a raised price target and...

Blue Lotus Research Institute

[Alibaba (BABA US, BUY, TP US$181) Target Price Change]: C2Q25 Review: Who Will Rescue Meituan?

Alibaba beats earnings estimates, poised to dominate O2O e-commerce in China with a 50% market share, leading to a top buy rating and increased...

Blue Lotus Research Institute

[KE Holdings Inc. (BEKE US, BUY, TP US$24) TP Change]: The Old China Braces for Turbulence & Change

Beike reported lower than expected financial results for the second quarter of 2025, attributing the decline in home sales growth to a weak market...

Blue Lotus Research Institute

[XPeng Inc. (XPEV US, BUY, TP US$28) Review]: When Margin and Cash Is Right, Growth Is Secondary

XPeng reported Q2 2025 financials, with losses wider than expected but improved vehicle gross margin. Analysts maintain a top buy rating with...

Blue Lotus Research Institute

[Blue Lotus Sector Update]: How Will China Monetize AI Differently?

​AGI will replace knowledge workers in the US service economy, while China's AI monetization is on track to catch up to the US by 2030.

Blue Lotus Research Institute

[Xiaomi Inc. (1810 HK, BUY, TP HK$61) TP Change]: C2Q25 Review: Getting into the Brand Expansion Era

​Xiaomi beats estimates, plans to expand brand success beyond smartphones to appliances and EV's worldwide, leading to a raised price target and...

Blue Lotus Research Institute

[Alibaba (BABA US, BUY, TP US$181) Target Price Change]: C2Q25 Review: Who Will Rescue Meituan?

​Alibaba beats earnings estimates, poised to dominate O2O e-commerce in China with a 50% market share, leading to a top buy rating and increased...

Blue Lotus Research Institute

[KE Holdings Inc. (BEKE US, BUY, TP US$24) TP Change]: The Old China Braces for Turbulence & Change

​Beike reported lower than expected financial results for the second quarter of 2025, attributing the decline in home sales growth to a weak market...

Blue Lotus Research Institute

[XPeng Inc. (XPEV US, BUY, TP US$28) Review]: When Margin and Cash Is Right, Growth Is Secondary

​XPeng reported Q2 2025 financials, with losses wider than expected but improved vehicle gross margin. Analysts maintain a top buy rating with...

Blue Lotus Research Institute

AGI will replace knowledge workers in the US service economy, while China's AI monetization is on track to catch up to the US by 2030.

Xiaomi beats estimates, plans to expand brand success beyond smartphones to appliances and EV's worldwide, leading to a raised price target and...

Alibaba beats earnings estimates, poised to dominate O2O e-commerce in China with a 50% market share, leading to a top buy rating and increased...

Beike reported lower than expected financial results for the second quarter of 2025, attributing the decline in home sales growth to a weak market...

XPeng reported Q2 2025 financials, with losses wider than expected but improved vehicle gross margin. Analysts maintain a top buy rating with...