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

Thematic (Sector/Industry)

<ul>
<li>Contrast to weak EV demand and solar PV inventory correction abroad, domestic renewable capacities have been growing at such a neck-breaking speed that we foresee a utilization drop in 2023;</li>
<li>China’s firm and consistent renewable policy and a unified energy vision have been its strength,</li>
<li>But now have developed a few inconsistencies. Resolution of inconsistency push the sector to higher grounds. </li>
</ul>


Contrast to weak EV demand and solar PV inventory correction abroad, domestic renewable capacities have been growing at such a neck-breaking speed that we foresee a utilization drop in 2023;
China’s firm and consistent renewable policy and a unified energy vision have been its strength,
But now have developed a few inconsistencies. Resolution of inconsistency push the sector to higher grounds. 


[Blue Lotus Sector Update]: Chinese Renewable Energy Comes to Crossroads

<ul>
<li>Luckin Coffee: Moutai Latte will be a long-term selling product, but shortage of raw materials leads to temporary outage（/）</li>
<li>Sungrow invested TopCon startup posted 2nd highest in energy conversion efficiency（/）</li>
<li>Tencent officially published Hunyuan foundation model at Tencent GDES 2023</li>
</ul>


Luckin Coffee: Moutai Latte will be a long-term selling product, but shortage of raw materials leads to temporary outage（/）
Sungrow invested TopCon startup posted 2nd highest in energy conversion efficiency（/）
Tencent officially published Hunyuan foundation model at Tencent GDES 2023


China TMT Update-Luckin/Tencent/Sungrow/Jolywood/Jinko/Drinda-Moutai Latte/Hunyuan LLM/Sungrowinvest

<ul>
<li>The biggest debate in solar PV technology today is the rapid adoption of N-type solar cells (TopCon), championed by Jinko, vs. the cautious approach... </li>
<li>To prolong the life cycle of the current P-type solar cell (PERC), purposely represented by LONGi; We believe this division is misleading.</li>
<li>LONGi’s strategy is far from simply squeeze out the last penny of PERC. We believe it represents a new thinking trying to set LONGi apart of the old investment logic.</li>
</ul>


The biggest debate in solar PV technology today is the rapid adoption of N-type solar cells (TopCon), championed by Jinko, vs. the cautious approach... 
To prolong the life cycle of the current P-type solar cell (PERC), purposely represented by LONGi; We believe this division is misleading.
LONGi’s strategy is far from simply squeeze out the last penny of PERC. We believe it represents a new thinking trying to set LONGi apart of the old investment logic.


[Blue Lotus Sector Update]: In Solar PV Winners Go to One Who Count the Pennies

<ul>
<li>C1H23 solar PV and wind power capacity addition grew 154% and 72% YoY in China, significantly above 2022 growth. With the real estate fallout, renewable capex will likely stay robust. </li>
<li>We view hydrogen being constrained by its end use in the near future. Incremental renewable capex will still go to solar and wind;</li>
<li>Capacity addition is a long-term problem. But we don’t think overcapacity is an issue now. Capacity investment in upgrading technology is a plus. The more should be the better.</li>
</ul>


C1H23 solar PV and wind power capacity addition grew 154% and 72% YoY in China, significantly above 2022 growth. With the real estate fallout, renewable capex will likely stay robust. 
We view hydrogen being constrained by its end use in the near future. Incremental renewable capex will still go to solar and wind;
Capacity addition is a long-term problem. But we don’t think overcapacity is an issue now. Capacity investment in upgrading technology is a plus. The more should be the better.


[Blue Lotus Sector Update]: Is There a Good Capacity War from China?

Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

Shenton Research

Shenton Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyse the changes of A-H premium on 196 stocks over the last week. The average A-H premium was 82.7% as of Aug 14th.</li>
<li>The average A-H premium changed by 1.0ppt week-on-week, led by consumer staples, health care, materials and offset by information technology, energy, real estate.</li>
<li>We highlight weekly changes in A-H premium for Muyuan Foods Group Co Ltd-H, Innocare Pharma Ltd-H, Luxshare Ict, China Telecom.</li>
</ul>


We analyse the changes of A-H premium on 196 stocks over the last week. The average A-H premium was 82.7% as of Aug 14th.
The average A-H premium changed by 1.0ppt week-on-week, led by consumer staples, health care, materials and offset by information technology, energy, real estate.
We highlight weekly changes in A-H premium for Muyuan Foods Group Co Ltd-H, Innocare Pharma Ltd-H, Luxshare Ict, China Telecom.


A-H Premium Weekly (Aug 14th): Muyuan Foods Group Co Ltd-H, Innocare Pharma Ltd-H, Luxshare Ict

China

Hainan Drinda Automotive Trim Co., Ltd. manufactures auto parts. The Company develops, produces, and sells plastic interior and exterior auto parts. Hainan Drinda Automotive Trim markets its products to automobile manufacturers.

Hainan Drinda Automotive Trim (002865 CH)

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Hainan Drinda Automotive Trim (002865 CH)

[Blue Lotus Sector Update]: Chinese Renewable Energy Comes to Crossroads

China’s firm and consistent renewable policy and a unified energy vision have been its strength, But now have developed a few inconsistencies.

Blue Lotus Research Institute

China TMT Update-Luckin/Tencent/Sungrow/Jolywood/Jinko/Drinda-Moutai Latte/Hunyuan LLM/Sungrowinvest

Luckin Coffee: Moutai Latte shortage of raw materials leads to temporary outage（/）Sungrow invested TopCon startup（/）Tencent officially published...

Blue Lotus Research Institute

[Blue Lotus Sector Update]: In Solar PV Winners Go to One Who Count the Pennies

LONGi’s strategy is far from simply squeeze out the last penny of PERC. We believe it represents a new thinking trying to set LONGi apart of the...

Blue Lotus Research Institute

[Blue Lotus Sector Update]: Is There a Good Capacity War from China?

Capacity addition is a long-term problem. But we don’t think overcapacity is an issue now. Capacity investment in upgrading technology is a plus....

Blue Lotus Research Institute

A-H Premium Weekly (Aug 14th): Muyuan Foods Group Co Ltd-H, Innocare Pharma Ltd-H, Luxshare Ict

We analyzed A-H premium changes in the past week and highlight A-H premium changes for Muyuan Foods Group Co Ltd-H, Innocare Pharma Ltd-H, Luxshare...

Ke Yan, CFA, FRM

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)