Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy 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

Atour Lifestyle Holdings / Equity Bottom-Up

<ul>
<li>Atour (ATAT) delivered a steady C1Q25 with revenue (3.9%)/1.6% vs. our est./cons., and non-GAAP operating profit (5.0%)/5.5% vs. our est./cons.;</li>
<li>We see catalysts from the “low-before-high” RevPAR trend, legacy hotel renewals and retail profitability improvement.</li>
<li>We keep the TP at US$37/ADS and reiterate as travel sector TOP BUY</li>
</ul>


Atour (ATAT) delivered a steady C1Q25 with revenue (3.9%)/1.6% vs. our est./cons., and non-GAAP operating profit (5.0%)/5.5% vs. our est./cons.;
We see catalysts from the “low-before-high” RevPAR trend, legacy hotel renewals and retail profitability improvement.
We keep the TP at US$37/ADS and reiterate as travel sector TOP BUY


[Atour Lifestyle (ATAT US,BUY,TP US$37) Review]: Peer-Beating Performance Now W/ Shareholder Returns

<ul>
<li>Atour (ATAT) reported C4Q24 revenue 0.7%/5.8% higher than our estimate/consensus, which translate to 0.5%/4.7% higher in non-GAAP net income, thanks to hotel supply chain consolidation and pillow retail sales.</li>
<li>Management's guidance for a steeper-than-consensus decline in 2025's RevPAR are conservative in our view. We see a "low-before-high" RevPAR pattern in 2025, supported by tightened hotel supply and government stimuli.</li>
<li>We keep the TP at US$37/ADS and maintain as travel sector TOP BUY</li>
</ul>


Atour (ATAT) reported C4Q24 revenue 0.7%/5.8% higher than our estimate/consensus, which translate to 0.5%/4.7% higher in non-GAAP net income, thanks to hotel supply chain consolidation and pillow retail sales.
Management's guidance for a steeper-than-consensus decline in 2025's RevPAR are conservative in our view. We see a "low-before-high" RevPAR pattern in 2025, supported by tightened hotel supply and government stimuli.
We keep the TP at US$37/ADS and maintain as travel sector TOP BUY


[Atour Lifestyle (ATAT US, BUY, TP US$37) Review]: Higher-Quality Growth Extending into 2025

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

Event-Driven

<ul>
<li>We see 281 Chinese companies listed on U.S Stock Exchanges with a total market cap of US$869bn. 32 of these companies are listed on the <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a>. </li>
<li>If the rumours of Chinese stocks being delisted from U.S. Exchanges gathers steam, we could see a wave of secondary listings in Hong Kong.</li>
<li>
<a href="https://www.smartkarma.com/entities/pdd-holdings-inc" target="_blank" data-smartkarma-citation="entities:27250:1" rel="noopener">PDD Holdings</a>, <a href="https://www.smartkarma.com/entities/full-truck-alliance-co-ltd" target="_blank" data-smartkarma-citation="entities:33429:1" rel="noopener">Full Truck Alliance</a>, <a href="https://www.smartkarma.com/entities/vipshop-holdings-ltd-adr" target="_blank" data-smartkarma-citation="entities:1088:1" rel="noopener">Vipshop Holdings</a>, <a href="https://www.smartkarma.com/entities/tal-education-group" target="_blank" data-smartkarma-citation="entities:1124:1" rel="noopener">TAL Education</a> and <a href="https://www.smartkarma.com/entities/zeekr-intelligent-technology-holding" target="_blank" data-smartkarma-citation="entities:36785:1" rel="noopener">ZEEKR</a> are the largest China ADRs with no HK listing and could come under pressure.</li>
</ul>


We see 281 Chinese companies listed on U.S Stock Exchanges with a total market cap of US$869bn. 32 of these companies are listed on the HKEX (388 HK). 
If the rumours of Chinese stocks being delisted from U.S. Exchanges gathers steam, we could see a wave of secondary listings in Hong Kong.

PDD Holdings, Full Truck Alliance, Vipshop Holdings, TAL Education and ZEEKR are the largest China ADRs with no HK listing and could come under pressure.


What if China ADRs Are Delisted from US Exchanges?

Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

<ul>
<li>China's outbound tourism recovery started much later than others in the region</li>
<li>In particular, Taiwan &amp; Korea began ramping outbound travel earlier (in Q222)</li>
<li>As destinations, Thailand &amp; Vietnam recovered early, but now lag HK's growth</li>
</ul>


China's outbound tourism recovery started much later than others in the region
In particular, Taiwan &amp; Korea began ramping outbound travel earlier (in Q222)
As destinations, Thailand &amp; Vietnam recovered early, but now lag HK's growth


China's Tourism Recovery Versus Other Major Tourist Sources in Asia: Delayed, Not Slower

<ul>
<li>Chinese outbound and domestic air traffic activity improved sharply Y/Y in the January-February LNY travel period, but activity remains far below pre-Covid levels</li>
<li>Given constrained outbound air capacity, we're surprised to see relatively low (65-66%) passenger load factors reported by the leading Chinese airlines during LNY</li>
<li>If planes don't begin to fill up with Chinese tourists soon, we believe some investors may become disappointed in the pace of China's travel recovery </li>
</ul>


Chinese outbound and domestic air traffic activity improved sharply Y/Y in the January-February LNY travel period, but activity remains far below pre-Covid levels
Given constrained outbound air capacity, we're surprised to see relatively low (65-66%) passenger load factors reported by the leading Chinese airlines during LNY
If planes don't begin to fill up with Chinese tourists soon, we believe some investors may become disappointed in the pace of China's travel recovery 


TRACKING TRAFFIC/Chinese Tourism: LNY Traffic Points to Slow Recovery in 2023

China

Atour Lifestyle Holdings Limited operates as a holding company. The Company, through its subsidiaries, owns and manages midscale hotel chain through offline and online channels, including mobile application and weixin-wechat mini program. Atour Lifestyle Holdings serves customers in China.

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Atour Lifestyle Holdings (ATAT US)

[Atour Lifestyle (ATAT US,BUY,TP US$37) Review]: Peer-Beating Performance Now W/ Shareholder Returns

Atour (ATAT) reports solid C1Q25 results, with revenue and operating profit slightly beating estimates. Catalysts include RevPAR trend, hotel...

Blue Lotus Research Institute

[Atour Lifestyle (ATAT US, BUY, TP US$37) Review]: Higher-Quality Growth Extending into 2025

Atour beats revenue estimates, expects decline in 2025 RevPAR to be temporary due to supply chain improvements and government support. TP remains...

Blue Lotus Research Institute

What if China ADRs Are Delisted from US Exchanges?

The escalating tariff wars have increased calls in the U.S for Chinese companies to be delisted. While there have been few mentions of an...

Brian Freitas

China's Tourism Recovery Versus Other Major Tourist Sources in Asia: Delayed, Not Slower

In this insight we compare China's progress toward restoring outbound tourism activity to the progress shown by other major tourist sources in the...

Tracking Traffic

TRACKING TRAFFIC/Chinese Tourism: LNY Traffic Points to Slow Recovery in 2023

Jan-Feb air traffic shows the beginnings of a recovery in Chinese travel activity, but we're surprised to see outbound flights with load factors of...

Tracking Traffic

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Atour Lifestyle (ATAT US,BUY,TP US$37) Review]: Peer-Beating Performance Now W/ Shareholder Returns

​Atour (ATAT) reports solid C1Q25 results, with revenue and operating profit slightly beating estimates. Catalysts include RevPAR trend, hotel...

Blue Lotus Research Institute

[Atour Lifestyle (ATAT US, BUY, TP US$37) Review]: Higher-Quality Growth Extending into 2025

​Atour beats revenue estimates, expects decline in 2025 RevPAR to be temporary due to supply chain improvements and government support. TP remains...

Blue Lotus Research Institute

What if China ADRs Are Delisted from US Exchanges?

The escalating tariff wars have increased calls in the U.S for Chinese companies to be delisted. While there have been few mentions of an...

Brian Freitas

China's Tourism Recovery Versus Other Major Tourist Sources in Asia: Delayed, Not Slower

In this insight we compare China's progress toward restoring outbound tourism activity to the progress shown by other major tourist sources in the...

Tracking Traffic

TRACKING TRAFFIC/Chinese Tourism: LNY Traffic Points to Slow Recovery in 2023

Jan-Feb air traffic shows the beginnings of a recovery in Chinese travel activity, but we're surprised to see outbound flights with load factors of...

Tracking Traffic

Atour (ATAT) reports solid C1Q25 results, with revenue and operating profit slightly beating estimates. Catalysts include RevPAR trend, hotel...

Atour beats revenue estimates, expects decline in 2025 RevPAR to be temporary due to supply chain improvements and government support. TP remains...