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

<ul>
<li>BABA reported C1Q24 top line, adjusted EBITA and non-GAAP net profit (2.7%), 5.5% and in-line vs. consensus. </li>
<li>E-Commerce GMV recovery is the most positive of all. TTG ad-revenues (CMR) trailed GMV growth but we see the two closing the gap in C2H24</li>
<li>Besides stabilizing e-commerce, BABA is on track of transforming itself from China's eBay to China's Microsoft. AI-related cloud revenue grew 100% YoY. </li>
</ul>


BABA reported C1Q24 top line, adjusted EBITA and non-GAAP net profit (2.7%), 5.5% and in-line vs. consensus. 
E-Commerce GMV recovery is the most positive of all. TTG ad-revenues (CMR) trailed GMV growth but we see the two closing the gap in C2H24
Besides stabilizing e-commerce, BABA is on track of transforming itself from China's eBay to China's Microsoft. AI-related cloud revenue grew 100% YoY. 


[Alibaba (BABA US, BUY, TP US$100) TP Change]: On Track for the Great Turnaround…Reiterate BUY

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

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.

Quantitative Analysis

<ul>
<li>We analyzed the latest HK SFC report for aggregate short position as of Aug 9th.</li>
<li>Top short increases and decreases were tabulated for one week and four week period. </li>
<li>We highlight short changes in Baba, HSBC, Ntes, AIA, Bidu, Galaxy Ent.</li>
</ul>


We analyzed the latest HK SFC report for aggregate short position as of Aug 9th.
Top short increases and decreases were tabulated for one week and four week period. 
We highlight short changes in Baba, HSBC, Ntes, AIA, Bidu, Galaxy Ent.


HK Short Interest Weekly: Baba, HSBC, Ntes, AIA, Bidu, Galaxy Ent

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>
<a href="https://www.smartkarma.com/entities/j-t-global-express-ltd" target="_blank" data-smartkarma-citation="entities:36819:1" rel="noopener">J&amp;T Global Express (1519 HK)</a> and <a href="https://www.smartkarma.com/entities/new-oriental-education-techn" target="_blank" data-smartkarma-citation="entities:32210:1" rel="noopener">New Oriental Education (9901 HK)</a> will replace <a href="https://www.smartkarma.com/entities/jd-logistics-inc" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a> and <a href="https://www.smartkarma.com/entities/sensetime-group-inc" target="_blank" data-smartkarma-citation="entities:34319:1" rel="noopener">SenseTime (20 HK)</a> in the <a href="https://www.smartkarma.com/entities/hang-seng-china-enterprises-index" target="_blank" data-smartkarma-citation="entities:22900:1" rel="noopener">HSCEI</a> at the close on 6 September.</li>
<li>The inclusion of <a href="https://www.smartkarma.com/entities/j-t-global-express-ltd" target="_blank" data-smartkarma-citation="entities:36819:1" rel="noopener">J&amp;T Global Express (1519 HK)</a> is a big surprise and the stock could move higher over the next couple of weeks.</li>
<li>The non-inclusion of <a href="https://www.smartkarma.com/entities/picc-property-casualty-h" target="_blank" data-smartkarma-citation="entities:350:1" rel="noopener">PICC Property &amp; Casualty H (2328 HK)</a> is another surprise since we had the stock highly ranked in the universe.</li>
</ul>



J&amp;T Global Express (1519 HK) and New Oriental Education (9901 HK) will replace JD Logistics (2618 HK) and SenseTime (20 HK) in the HSCEI at the close on 6 September.
The inclusion of J&amp;T Global Express (1519 HK) is a big surprise and the stock could move higher over the next couple of weeks.
The non-inclusion of PICC Property &amp; Casualty H (2328 HK) is another surprise since we had the stock highly ranked in the universe.


HSCEI Index Rebalance: Three In-Line Changes, Two Big Surprises

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>Alibaba reported 1QFY25 (March year-end) results: total revenue was RMB243.2bn, up 3.9% YoY, 2.6% shy of Bloomberg consensus due to reduction of certain direct sales business and softer-than-expected customer management revenue (CMR) growth, while adjusted EBITA/non-GAAP net income for the quarter was RMB45.0bn/40.3bn, both of which were 6% better than consensus, driven by better-than-expected operating efficiency improvement across nearly all major segments.</li><li>The results demonstrated Alibaba’s capability in driving for operating efficiency improvement across business segment, in our view, and management has illustrated a clear path to drive for monetization improvement of Taobao &amp; Tmall (T&amp;T) Group in the coming quarters.</li><li>Key strategic growth areas such as Cloud Intelligence Group (CIG) and Alibaba International Digital Commerce Group (AIDC) are on track to support Alibaba’s long-term revenue and earnings growth, and the potential dual primary listing in Hong Kong and inclusion into Stock Connect could drive rerating for valuation, in our view. </li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

Alibaba reported 1QFY25 (March year-end) results: total revenue was RMB243.2bn, up 3.9% YoY, 2.6% shy of Bloomberg consensus due to reduction of certain direct sales business and softer-than-expected customer management revenue (CMR) growth, while adjusted EBITA/non-GAAP net income for the quarter was RMB45.0bn/40.3bn, both of which were 6% better than consensus, driven by better-than-expected operating efficiency improvement across nearly all major segments.The results demonstrated Alibaba’s capability in driving for operating efficiency improvement across business segment, in our view, and management has illustrated a clear path to drive for monetization improvement of Taobao &amp; Tmall (T&amp;T) Group in the coming quarters.Key strategic growth areas such as Cloud Intelligence Group (CIG) and Alibaba International Digital Commerce Group (AIDC) are on track to support Alibaba’s long-term revenue and earnings growth, and the potential dual primary listing in Hong Kong and inclusion into Stock Connect could drive rerating for valuation, in our view. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Alibaba (BABA US) - Driving for Monetization Improvement While Maintaining Stabilizing Market Share

Greater China Equity Long/Short Analyst

Eric Chen

<ul>
<li>Mixed June quarter results at first glance suggest corporate overhaul strategy is working, with clear evidence Taobao/Tmall is stabilizing in terms of market share and profitability.</li>
<li>Better platform monetization and clear timetable for achieving break-even by non-e-commerce business segments mean double-digit earnings CAGR by FY26 in our view.</li>
<li>We expect Alibaba’s upswing business cycle and moderating headwind of housing market slump are paving the way for the stock’s re-rating in the next 12-24 months. </li>
</ul>


Mixed June quarter results at first glance suggest corporate overhaul strategy is working, with clear evidence Taobao/Tmall is stabilizing in terms of market share and profitability.
Better platform monetization and clear timetable for achieving break-even by non-e-commerce business segments mean double-digit earnings CAGR by FY26 in our view.
We expect Alibaba’s upswing business cycle and moderating headwind of housing market slump are paving the way for the stock’s re-rating in the next 12-24 months. 


China

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.

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Alibaba (9988 HK)

[Alibaba (BABA US, BUY, TP US$100) TP Change]: On Track for the Great Turnaround…Reiterate BUY

BABA's Q1 results show strong performance, with e-commerce GMV leading the way and AI-related cloud revenue doubling year-over-year. Transitioning...

Blue Lotus Research Institute

HK Short Interest Weekly: Baba, HSBC, Ntes, AIA, Bidu, Galaxy Ent

We analyzed the latest HK SFC report for aggregate short position as of Aug 9th and highlight short interest changes in Baba, HSBC, Ntes, AIA,...

Ke Yan, CFA, FRM

HSCEI Index Rebalance: Three In-Line Changes, Two Big Surprises

There are 2 sets of changes for the index in Sep. 1 add is a big surprise, as is 1 non-inclusion. JT Global Express should pop on Monday but there...

Brian Freitas

Alibaba (BABA US): Strategy at Work

June quarter results show success of overhaul strategy with stabilizing market share and profitability, leading to projected 14% earnings CAGR by...

Eric Chen

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[Alibaba (BABA US, BUY, TP US$100) TP Change]: On Track for the Great Turnaround…Reiterate BUY

​BABA's Q1 results show strong performance, with e-commerce GMV leading the way and AI-related cloud revenue doubling year-over-year. Transitioning...

Blue Lotus Research Institute

HK Short Interest Weekly: Baba, HSBC, Ntes, AIA, Bidu, Galaxy Ent

We analyzed the latest HK SFC report for aggregate short position as of Aug 9th and highlight short interest changes in Baba, HSBC, Ntes, AIA,...

Ke Yan, CFA, FRM

HSCEI Index Rebalance: Three In-Line Changes, Two Big Surprises

There are 2 sets of changes for the index in Sep. 1 add is a big surprise, as is 1 non-inclusion. JT Global Express should pop on Monday but there...

Brian Freitas

Alibaba (BABA US) - Driving for Monetization Improvement While Maintaining Stabilizing Market Share

Our SOTP based target price was lifted by 1.5% to US$126.9 driven by potentially better monetization outlook from CMR business. Maintain BUY.

CMB International

Alibaba (BABA US): Strategy at Work

June quarter results show success of overhaul strategy with stabilizing market share and profitability, leading to projected 14% earnings CAGR by...

Eric Chen

BABA's Q1 results show strong performance, with e-commerce GMV leading the way and AI-related cloud revenue doubling year-over-year. Transitioning...