Blue Lotus Research Institute

Andy Fu

China growth and global non-US Internet equities

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>As we previously noted, Chinese housing market started 2025 with a bang but quickly deteriorated. This trend became more pronounced post CNY; </li>
<li>Is this a temporary lull from the very strong start? Or it signals something more troublesome in consumption in 2025? </li>
<li>We now think our forecasted 25% GTV growth by Beike in C1Q25 is at risk.</li>
</ul>


As we previously noted, Chinese housing market started 2025 with a bang but quickly deteriorated. This trend became more pronounced post CNY; 
Is this a temporary lull from the very strong start? Or it signals something more troublesome in consumption in 2025? 
We now think our forecasted 25% GTV growth by Beike in C1Q25 is at risk.


Fast Deterioration of Housing Transaction Post CNY Pointed to Fragile Recovery

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

<ul>
<li>Tencent and NetEase games showed strong during CNY, echoing strong box office showing. Express delivery data suggested robust e-commerce performance;</li>
<li>However, as a big ticket item with no subsidies support, housing market petered out quickly after CNY, which suggests recovery is still fragile;</li>
<li>Meituan's milk tea order volume jumped after introducing social gift functions. Meituan and JD.com are two beneficiaries of social gifting from the GMV angle with Tencent from the advertising angle.</li>
</ul>


Tencent and NetEase games showed strong during CNY, echoing strong box office showing. Express delivery data suggested robust e-commerce performance;
However, as a big ticket item with no subsidies support, housing market petered out quickly after CNY, which suggests recovery is still fragile;
Meituan's milk tea order volume jumped after introducing social gift functions. Meituan and JD.com are two beneficiaries of social gifting from the GMV angle with Tencent from the advertising angle.


[Blue Lotus Non-US Internet Weekly, 6/52]: Consumption Warmed Up During CNY Except Housing

Index Rebal Trades & Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal Trades & Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

<ul>
<li>The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes. </li>
<li>The official index changes and indicative weights for the March 2025 index rebal event will be announced on Friday 21st February 2025.</li>
<li>We continue to expect one change for the HSTECH index in March 2025, combined with capping flows of US$716mn.</li>
</ul>


The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes. 
The official index changes and indicative weights for the March 2025 index rebal event will be announced on Friday 21st February 2025.
We continue to expect one change for the HSTECH index in March 2025, combined with capping flows of US$716mn.


Quiddity Leaderboard HSTECH Mar 25: US$716mn One-Way; Large Outflow for Xiaomi

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

<ul>
<li>Abnormally high growth during CNY of the express delivery parcel data showed social gift giving likely bumped up 20ppt YoY growth this CNY;</li>
<li>BYD plans to extend ADS to its low priced cars. 2025 will be a year L3 ADS extending to mainstream EV's now this prediction is even conservative;</li>
<li>Chinese EV makers are launching free price wars. But zero financing may be prompted by the banks, not by EV makers, mitigating margin impact.</li>
</ul>


Abnormally high growth during CNY of the express delivery parcel data showed social gift giving likely bumped up 20ppt YoY growth this CNY;
BYD plans to extend ADS to its low priced cars. 2025 will be a year L3 ADS extending to mainstream EV's now this prediction is even conservative;
Chinese EV makers are launching free price wars. But zero financing may be prompted by the banks, not by EV makers, mitigating margin impact.


[Blue Lotus China New Consumer Weekly, 6/52] Express Delivery Showed Social Gift Took off During CNY

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.</li>
<li>Highest spreads: <a href="https://www.smartkarma.com/entities/lifestyle-china-group-ltd" target="_blank" data-smartkarma-citation="entities:26090:1" rel="noopener">Lifestyle China (2136 HK)</a>, <a href="https://www.smartkarma.com/entities/seven-i-holdings-co-ltd" target="_blank" data-smartkarma-citation="entities:1041:1" rel="noopener">Seven &amp; I Holdings (3382 JP)</a>, <a href="https://www.smartkarma.com/entities/dada-nexus-ltd" target="_blank" data-smartkarma-citation="entities:28961:1" rel="noopener">Dada Nexus (DADA US)</a>, <a href="https://www.smartkarma.com/entities/smart-share-global-limited" target="_blank" data-smartkarma-citation="entities:32217:1" rel="noopener">Smart Share Global (EM US)</a>, <a href="https://www.smartkarma.com/entities/esr-group-ltd" target="_blank" data-smartkarma-citation="entities:27983:1" rel="noopener">ESR Group (1821 HK)</a>, Get Nice Financial. 
</li>
<li>Lowest spreads: <a href="https://www.smartkarma.com/entities/makino-milling-machine-co" target="_blank" data-smartkarma-citation="entities:5200:1" rel="noopener">Makino Milling Machine Co (6135 JP)</a>, <a href="https://www.smartkarma.com/entities/shibaura-electronics-co-ltd" target="_blank" data-smartkarma-citation="entities:12704:1" rel="noopener">Shibaura Electronics (6957 JP)</a>, <a href="https://www.smartkarma.com/entities/avjennings-ltd" target="_blank" data-smartkarma-citation="entities:12578:1" rel="noopener">Avjennings Ltd (AVJ AU)</a>, <a href="https://www.smartkarma.com/entities/fuji-soft-inc" target="_blank" data-smartkarma-citation="entities:17504:1" rel="noopener">Fuji Soft Inc (9749 JP)</a>, <a href="https://www.smartkarma.com/entities/macromill-inc" target="_blank" data-smartkarma-citation="entities:24026:1" rel="noopener">Macromill, Inc (3978 JP)</a>, <a href="https://www.smartkarma.com/entities/proto-corp" target="_blank" data-smartkarma-citation="entities:2511:1" rel="noopener">Proto Corp (4298 JP)</a>. 
</li>
</ul>


We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
Highest spreads: Lifestyle China (2136 HK), Seven &amp; I Holdings (3382 JP), Dada Nexus (DADA US), Smart Share Global (EM US), ESR Group (1821 HK), Get Nice Financial. 

Lowest spreads: Makino Milling Machine Co (6135 JP), Shibaura Electronics (6957 JP), Avjennings Ltd (AVJ AU), Fuji Soft Inc (9749 JP), Macromill, Inc (3978 JP), Proto Corp (4298 JP). 



Merger Arb Mondays (10 Feb) - Shibaura, Makino, Fuji Soft, Tecnos, Tohto Suisan, Proto, Pentamaster

China

JD.com Inc is an online direct sales company in China.  The Company offers a wide selection of products through its website and mobile applications.  JD.com sells appliances, computers, digital products, communication products, garments, books, and household items to consumers and vendors.

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JD.com (ADR) (JD US)

Fast Deterioration of Housing Transaction Post CNY Pointed to Fragile Recovery

Home transactions in 2025 are below trend post Chinese New Year due to a temporary lull after crowded trading, with potential downside risk for...

Blue Lotus Research Institute

[Blue Lotus Non-US Internet Weekly, 6/52]: Consumption Warmed Up During CNY Except Housing

Tencent and NetEase games shine during CNY, housing market falters post-holiday, Meituan sees boost in milk tea orders with social gifting feature.

Blue Lotus Research Institute

Quiddity Leaderboard HSTECH Mar 25: US$716mn One-Way; Large Outflow for Xiaomi

We expect Horizon Robotics to be added and East Buy Holdings to be deleted. Horizon Robotics has steeply outperformed East Buy Holdings during the...

Janaghan Jeyakumar, CFA

Merger Arb Mondays (10 Feb) - Shibaura, Makino, Fuji Soft, Tecnos, Tohto Suisan, Proto, Pentamaster

This week, the highest gross spreads are Lifestyle China (16.7%), Seven & I (15.4%), Dada Nexus (9.3%), Smart Share (7.8%), ESR (7.8%), Get Nice...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Fast Deterioration of Housing Transaction Post CNY Pointed to Fragile Recovery

​Home transactions in 2025 are below trend post Chinese New Year due to a temporary lull after crowded trading, with potential downside risk for...

Blue Lotus Research Institute

[Blue Lotus Non-US Internet Weekly, 6/52]: Consumption Warmed Up During CNY Except Housing

​Tencent and NetEase games shine during CNY, housing market falters post-holiday, Meituan sees boost in milk tea orders with social gifting feature.

Blue Lotus Research Institute

Quiddity Leaderboard HSTECH Mar 25: US$716mn One-Way; Large Outflow for Xiaomi

We expect Horizon Robotics to be added and East Buy Holdings to be deleted. Horizon Robotics has steeply outperformed East Buy Holdings during the...

Janaghan Jeyakumar, CFA

[Blue Lotus China New Consumer Weekly, 6/52] Express Delivery Showed Social Gift Took off During CNY

​CNY gift giving boosts express delivery growth, BYD to add ADS to low priced cars, Chinese EV makers engage in price wars with potential financing...

Blue Lotus Research Institute

Merger Arb Mondays (10 Feb) - Shibaura, Makino, Fuji Soft, Tecnos, Tohto Suisan, Proto, Pentamaster

This week, the highest gross spreads are Lifestyle China (16.7%), Seven & I (15.4%), Dada Nexus (9.3%), Smart Share (7.8%), ESR (7.8%), Get Nice...

Arun George

Home transactions in 2025 are below trend post Chinese New Year due to a temporary lull after crowded trading, with potential downside risk for...

Tencent and NetEase games shine during CNY, housing market falters post-holiday, Meituan sees boost in milk tea orders with social gifting feature.

CNY gift giving boosts express delivery growth, BYD to add ADS to low priced cars, Chinese EV makers engage in price wars with potential financing...