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

Thematic (Sector/Industry)

<ul>
<li>Following existing home last week, new home sales also posted positive YoY growth. </li>
<li>LI is getting ready for its major battle of the year with BEV launch. It is focused, but we doubt it is enough;</li>
<li>MNSO guided down its C4Q24 and we believe it will miss 2025 as well. Offline grocery is under constant assault by O2O and online e-commerce. </li>
</ul>


Following existing home last week, new home sales also posted positive YoY growth. 
LI is getting ready for its major battle of the year with BEV launch. It is focused, but we doubt it is enough;
MNSO guided down its C4Q24 and we believe it will miss 2025 as well. Offline grocery is under constant assault by O2O and online e-commerce. 


[Blue Lotus China New Consumer Weekly, 9/52] New Home Sales Also Turned Positive YoY

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

<ul>
<li>DeepSeek's (DS) own traffic declined as rivals launching white-label DS service but DS published research paper showing unmatched profit margin of 85%;</li>
<li>JD's take out initiative update: We think JD is serious but its effort will be in vain. We think JD.com knows it too.</li>
<li>Shopee and Lazada colluded to raise commission in SE Asia, benefiting both with no loss of market share.</li>
</ul>


DeepSeek's (DS) own traffic declined as rivals launching white-label DS service but DS published research paper showing unmatched profit margin of 85%;
JD's take out initiative update: We think JD is serious but its effort will be in vain. We think JD.com knows it too.
Shopee and Lazada colluded to raise commission in SE Asia, benefiting both with no loss of market share.


[Blue Lotus Non-US Internet Weekly, 9/52]: DeepSeek (DS) New Research Paper Showed 85% Profit Margin

<ul>
<li>After JD.com announced it would insure catering riders with social security, Meituan followed suit. Then JD clarified its intension was only to insure a newly established rider force from scratch; </li>
<li>Trump announced American First Investment Policy. Frankly we don't see anything new. It will affect sentiment, maybe;</li>
<li>SASAC calls for SOE's to adopt AI. This is a real positive to Alibaba.</li>
</ul>


After JD.com announced it would insure catering riders with social security, Meituan followed suit. Then JD clarified its intension was only to insure a newly established rider force from scratch; 
Trump announced American First Investment Policy. Frankly we don't see anything new. It will affect sentiment, maybe;
SASAC calls for SOE's to adopt AI. This is a real positive to Alibaba.


[Blue Lotus Non-US Internet Weekly, 8/52]: Is JD's Entry to Catering Real or Just Posturing?

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

<ul>
<li>China's DeepSeek is catalyzing growth opportunities in the Software as a Service (SaaS)/ Internet as a Service (IaaS) sectors by integrating AI solutions for platforms, service providers and software applications.</li>
<li>DeepSeek has democratized AI and brought forward significant demand for AI services for enterprises and consumers.  US hyperscalers will struggle to monetize their AI services as inexpensive models will proliferate.</li>
<li>Companies like <a href="https://www.smartkarma.com/entities/kingsoft-corp-ltd" target="_blank" data-smartkarma-citation="entities:492:1" rel="noopener">Kingsoft Corp (3888 HK)</a> , <a href="https://www.smartkarma.com/entities/kingdee-international-sftwr" target="_blank" data-smartkarma-citation="entities:37:1" rel="noopener">Kingdee International Software (268 HK)</a> , <a href="https://www.smartkarma.com/entities/chinasoft-international-ltd" target="_blank" data-smartkarma-citation="entities:407:1" rel="noopener">Chinasoft International (354 HK)</a> , <a href="https://www.smartkarma.com/entities/vobile-group" target="_blank" data-smartkarma-citation="entities:29711:1" rel="noopener">Vobile Group (3738 HK)</a> , and <a href="https://www.smartkarma.com/entities/inspur-international-ltd" target="_blank" data-smartkarma-citation="entities:7523:1" rel="noopener">Inspur International (596 HK)</a> will benefit.</li>
</ul>


China's DeepSeek is catalyzing growth opportunities in the Software as a Service (SaaS)/ Internet as a Service (IaaS) sectors by integrating AI solutions for platforms, service providers and software applications.
DeepSeek has democratized AI and brought forward significant demand for AI services for enterprises and consumers.  US hyperscalers will struggle to monetize their AI services as inexpensive models will proliferate.
Companies like Kingsoft Corp (3888 HK) , Kingdee International Software (268 HK) , Chinasoft International (354 HK) , Vobile Group (3738 HK) , and Inspur International (596 HK) will benefit.


DeepSeek Rally Creates More Winners in SaaS/IaaS Sectors

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

ZhongAn Online P&C Insurance C / Index Rebalance

<ul>
<li>As expected, <a href="https://www.smartkarma.com/entities/horizon-robotics-inc" target="_blank" data-smartkarma-citation="entities:35637:1" rel="noopener">Horizon Robotics (9660 HK)</a> replaces <a href="https://www.smartkarma.com/entities/east-buy-holding-ltd" target="_blank" data-smartkarma-citation="entities:27796:1" rel="noopener">East Buy Holding (1797 HK)</a> in the <a href="https://www.smartkarma.com/entities/hang-seng-tech-index" target="_blank" data-smartkarma-citation="entities:31367:1" rel="noopener">Hang Seng TECH Index (HSTECH INDEX)</a> in March.</li>
<li>In a surprise, <a href="https://www.smartkarma.com/entities/tencent-music-entertainment-group" target="_blank" data-smartkarma-citation="entities:36601:1" rel="noopener">Tencent Music Entertainment Group (1698 HK)</a> will be added and <a href="https://www.smartkarma.com/entities/zhongan-online-p-c-insurance-c" target="_blank" data-smartkarma-citation="entities:23681:1" rel="noopener">ZhongAn Online P&amp;C Insurance C (6060 HK)</a> will be deleted.</li>
<li>
<a href="https://www.smartkarma.com/entities/horizon-robotics-inc" target="_blank" data-smartkarma-citation="entities:35637:1" rel="noopener">Horizon Robotics (9660 HK)</a> is also an inclusion to the HSIII Index and HSCI Index and will be added to Southbound Stock Connect in May.</li>
</ul>


As expected, Horizon Robotics (9660 HK) replaces East Buy Holding (1797 HK) in the Hang Seng TECH Index (HSTECH INDEX) in March.
In a surprise, Tencent Music Entertainment Group (1698 HK) will be added and ZhongAn Online P&amp;C Insurance C (6060 HK) will be deleted.

Horizon Robotics (9660 HK) is also an inclusion to the HSIII Index and HSCI Index and will be added to Southbound Stock Connect in May.


HSTECH Index Rebalance: Horizon Robotics, Tencent Music Replace East Buy, ZA Online; US$2.3bn Trade

China

Baidu, Inc. operates an Internet search engine. The Company offers algorithmic search, enterprise search, news, MP3, and image searches, voice assistance, online storage, and navigation services. Baidu serves clients globally.

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Baidu (9888 HK)

[Blue Lotus China New Consumer Weekly, 9/52] New Home Sales Also Turned Positive YoY

Latest week saw positive YoY growth in new home sales, LI prepares for major battle with BEV launch, MNSO guidance down for C4Q24 and likely to...

Blue Lotus Research Institute

[Blue Lotus Non-US Internet Weekly, 9/52]: DeepSeek (DS) New Research Paper Showed 85% Profit Margin

DeepSeek claimed profit margin of 85%, JD's take out initiative doubted, Shopee and Lazada collude to raise commission in SE Asia.

Blue Lotus Research Institute

[Blue Lotus Non-US Internet Weekly, 8/52]: Is JD's Entry to Catering Real or Just Posturing?

JD and Meituan insure catering riders with social security, Trump's American First Investment Policy may affect sentiment, SASAC calls for SOEs to...

Blue Lotus Research Institute

DeepSeek Rally Creates More Winners in SaaS/IaaS Sectors

DeepSeek's breakthrough AI model has created huge demand for AI services at a more affordable price from enterprises and customers.SaaS and IaaS...

David Mudd

HSTECH Index Rebalance: Horizon Robotics, Tencent Music Replace East Buy, ZA Online; US$2.3bn Trade

Horizon Robotics and TME replace East Buy and Za Online. Estimated one-way turnover at the rebalance is 5.6% resulting in a round-trip trade of...

Brian Freitas

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52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Blue Lotus China New Consumer Weekly, 9/52] New Home Sales Also Turned Positive YoY

​Latest week saw positive YoY growth in new home sales, LI prepares for major battle with BEV launch, MNSO guidance down for C4Q24 and likely to...

Blue Lotus Research Institute

[Blue Lotus Non-US Internet Weekly, 9/52]: DeepSeek (DS) New Research Paper Showed 85% Profit Margin

DeepSeek claimed profit margin of 85%, JD's take out initiative doubted, Shopee and Lazada collude to raise commission in SE Asia.

Blue Lotus Research Institute

[Blue Lotus Non-US Internet Weekly, 8/52]: Is JD's Entry to Catering Real or Just Posturing?

​JD and Meituan insure catering riders with social security, Trump's American First Investment Policy may affect sentiment, SASAC calls for SOEs to...

Blue Lotus Research Institute

DeepSeek Rally Creates More Winners in SaaS/IaaS Sectors

DeepSeek's breakthrough AI model has created huge demand for AI services at a more affordable price from enterprises and customers.SaaS and IaaS...

David Mudd

HSTECH Index Rebalance: Horizon Robotics, Tencent Music Replace East Buy, ZA Online; US$2.3bn Trade

Horizon Robotics and TME replace East Buy and Za Online. Estimated one-way turnover at the rebalance is 5.6% resulting in a round-trip trade of...

Brian Freitas

Latest week saw positive YoY growth in new home sales, LI prepares for major battle with BEV launch, MNSO guidance down for C4Q24 and likely to...

JD and Meituan insure catering riders with social security, Trump's American First Investment Policy may affect sentiment, SASAC calls for SOEs to...