China/Asia TMT

Shawn Yang

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>We expect ACMR to report C1Q23 top-line and IFRS net income 2.8% and 83% vs. consensus, respectively. </li>
<li>We expect it to raise FY the mid-point of its guidance to US$560mn~, due to YMTC orders and 4Q23 order visibility; </li>
<li>We are buyers into earnings but avoid long-positions between reporting dates due to geopolitical risk exposure.</li>
</ul>


We expect ACMR to report C1Q23 top-line and IFRS net income 2.8% and 83% vs. consensus, respectively. 
We expect it to raise FY the mid-point of its guidance to US$560mn~, due to YMTC orders and 4Q23 order visibility; 
We are buyers into earnings but avoid long-positions between reporting dates due to geopolitical risk exposure.


[ACM Research Inc. (ACMR US, BUY, TP US$30) Earnings Preview]: Tool Monopoly for Next YMTC Expansion

Thematic (Sector/Industry)

<ul>
<li>JD: JD plans listing of its MRO distributor subsidiary JD Industrials (+)</li>
<li>PDD: Reports indicate that small merchants rebel against PDD policies (-)</li>
<li>981HK/1347HK/650HK/ACMR: Japan announces restrictions on exports of semiconductor equipment (+)</li>
</ul>


JD: JD plans listing of its MRO distributor subsidiary JD Industrials (+)
PDD: Reports indicate that small merchants rebel against PDD policies (-)
981HK/1347HK/650HK/ACMR: Japan announces restrictions on exports of semiconductor equipment (+)


China TMT Update: JD/PDD/981HK/1347HK/650HK/ACMR - Small Merchants Rebel Against PDD Policies

<ul>
<li>9926HK：Akeso and China's 2nd largest pharmaceutical distributor signed collaborative R&amp;D agreement（+）</li>
<li>XPEV: Xpeng to officially unveils facelift of P7 on Friday (+)</li>
<li>981.HK/1347.HK/ACMR: Netherlands announces intention to ban only “state-of-the-art” ASML DUV tools (+/+/+)</li>
</ul>


9926HK：Akeso and China's 2nd largest pharmaceutical distributor signed collaborative R&amp;D agreement（+）
XPEV: Xpeng to officially unveils facelift of P7 on Friday (+)
981.HK/1347.HK/ACMR: Netherlands announces intention to ban only “state-of-the-art” ASML DUV tools (+/+/+)


China TMT Update(Mar.10): 9926hk/XPEV/981.HK/1347.HK/ACMR: Xpeng to Unveils Facelift of P7 (+)

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

KraneShares CSI China Internet ETF / Event-Driven

<ul>
<li>The PCAOB has not, despite a cooperation agreement with the CSRC signed in 2013, been able to conduct on-site investigations of a HK or mainland-based company since 2010.</li>
<li>On Friday, the CSRC published a new Strengthening Confidentiality and File Management Related to Overseas Issuance to replace 2009 rules. </li>
<li>Importantly, the revised Provisions deletes the stipulation that “on-site inspections shall be dominated by domestic regulators or depend on the conclusions of inspections by domestic regulators.” Will it be enough?</li>
</ul>


The PCAOB has not, despite a cooperation agreement with the CSRC signed in 2013, been able to conduct on-site investigations of a HK or mainland-based company since 2010.
On Friday, the CSRC published a new Strengthening Confidentiality and File Management Related to Overseas Issuance to replace 2009 rules. 
Importantly, the revised Provisions deletes the stipulation that “on-site inspections shall be dominated by domestic regulators or depend on the conclusions of inspections by domestic regulators.” Will it be enough?


New CSRC "Provisions" Take a Step Towards Meeting PCAOB Requirements

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>If we take a close look at the HFCAA, there are three points that are really hard for China to accept, which could be an irreconcilable contradiction.</li>
<li>There could be a trend of delisting from the US market and then relisting on HKEX or A-share market in the future. Investors could suffer losses when companies come back.</li>
<li>Overall, the regulatory risk and delisting risk are two real unknowns. Therefore, investors should pay attention to the relevant companies and get prepared in advance.</li>
</ul>


If we take a close look at the HFCAA, there are three points that are really hard for China to accept, which could be an irreconcilable contradiction.
There could be a trend of delisting from the US market and then relisting on HKEX or A-share market in the future. Investors could suffer losses when companies come back.
Overall, the regulatory risk and delisting risk are two real unknowns. Therefore, investors should pay attention to the relevant companies and get prepared in advance.


The Impact of HFCAA on China ADR (China Healthcare Companies)

United States

ACM Research, Inc. develops wet processing technology. The Company produces equipment for a range of applications in integrated circuits and wafer level packaging, as well as offers coating, developer, wet stripping, scrubber, and plating systems. ACM Research serves customers worldwide.

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ACM Research (ACMR US)

[ACM Research Inc. (ACMR US, BUY, TP US$30) Earnings Preview]: Tool Monopoly for Next YMTC Expansion

We expect ACMR to report C1Q23 top-line and IFRS net income 2.8% and 83% vs. consensus. We expect it to raise the mid-point of its guidance to...

Blue Lotus Research Institute

China TMT Update: JD/PDD/981HK/1347HK/650HK/ACMR - Small Merchants Rebel Against PDD Policies

Small merchants rebel against PDD policies ; Japan announces restrictions on exports of semiconductor equipment; JD plans listing of its MRO...

Blue Lotus Research Institute

China TMT Update(Mar.10): 9926hk/XPEV/981.HK/1347.HK/ACMR: Xpeng to Unveils Facelift of P7 (+)

Akeso and China's 2nd largest pharmaceutical distributor signed collaborative R&D agreement ; Xpeng to officially unveils facelift of P7:...

Blue Lotus Research Institute

New CSRC "Provisions" Take a Step Towards Meeting PCAOB Requirements

CSRC has published new Provisions putting the onus of info management on companies, making it easier for the PCAOB to conduct on-site audits. It...

Travis Lundy

The Impact of HFCAA on China ADR (China Healthcare Companies)

We analyzed the points in HFCAA that are difficult for China to accept.Such irreconcilable contradiction could lead to a trend of delisting from...

Xinyao (Criss) Wang

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