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>1211 HK/LI US /XPEV US/NIO US: China and the EU have launched negotiations on electric vehicle tariffs (///////)</li>
<li>BEKE US: Existing Home Sales Increase 61% YoY in the 26th Week of 2024, Expected to Increase 19% YoY in June (+)</li>
<li>1810 HK/ NIO US/ XPEV US/ LI US/1211 HK/300207 SZ/300750 SZ:  Xiaomi's third model was said to be a low priced model, targeting low tier cities .(/////////////)</li>
</ul>


1211 HK/LI US /XPEV US/NIO US: China and the EU have launched negotiations on electric vehicle tariffs (///////)
BEKE US: Existing Home Sales Increase 61% YoY in the 26th Week of 2024, Expected to Increase 19% YoY in June (+)
1810 HK/ NIO US/ XPEV US/ LI US/1211 HK/300207 SZ/300750 SZ:  Xiaomi's third model was said to be a low priced model, targeting low tier cities .(/////////////)


[Blue Lotus Daily]:1211HK/LI/XPEV/NIO/BEKE/1810HK/300207SZ/300750SZ/LKNCY/9926HK/MNSO/600519CH

<ul>
<li>981HK: Huawei Wuhu Supercomputing Center opens services, which benefits SMIC. (/)</li>
<li>LKNCY US: Cotti Coffee Changes Product Formulas and Supply Chain, Ramps up Promotion for Fruit Coffee (-)</li>
<li>BGNE US: AstraZeneca Calquence Phase III results set up competition for BeiGene's Zanubrutinib</li>
</ul>


981HK: Huawei Wuhu Supercomputing Center opens services, which benefits SMIC. (/)
LKNCY US: Cotti Coffee Changes Product Formulas and Supply Chain, Ramps up Promotion for Fruit Coffee (-)
BGNE US: AstraZeneca Calquence Phase III results set up competition for BeiGene's Zanubrutinib


[Blue Lotus Daily]:981HK/LKNCY US/BGNE US

Andy Fu

Equity Bottom-Up

<ul>
<li>Luckin launched lemonade drinks with raging success of 5.08 mn cups sold for the first week, ~10% of store sales. Market cheered to send the stock higher;  </li>
<li>We view it with mixed feelings. While it is margin accretive and sales enhancing,  is not conducive to improving coffee penetration and cultivating consumers' habit for drinking coffee;</li>
<li>We see Luckin as increasingly one of, instead of the, street drink company, because lemonade is actually the top selling SKU of all milk tea vendors in China. </li>
</ul>


Luckin launched lemonade drinks with raging success of 5.08 mn cups sold for the first week, ~10% of store sales. Market cheered to send the stock higher;  
We view it with mixed feelings. While it is margin accretive and sales enhancing,  is not conducive to improving coffee penetration and cultivating consumers' habit for drinking coffee;
We see Luckin as increasingly one of, instead of the, street drink company, because lemonade is actually the top selling SKU of all milk tea vendors in China. 


Luckin's Small Step into Non-Coffee Drinks Is a Big Step of Its Future Directions

<ul>
<li>1211 HK/300750 SZ: Geely and SK Group sign cooperation agreement to deepen cooperation in batteries and components.(-/-)</li>
<li>BEKE US: PBoC urge local governments and banks to implement the affordable housing re-lending program.(+)</li>
<li>LKNCY US: Luckin expands its non-coffee drinks, selling 5.08 million cups of lemonade in a week(/)</li>
</ul>


1211 HK/300750 SZ: Geely and SK Group sign cooperation agreement to deepen cooperation in batteries and components.(-/-)
BEKE US: PBoC urge local governments and banks to implement the affordable housing re-lending program.(+)
LKNCY US: Luckin expands its non-coffee drinks, selling 5.08 million cups of lemonade in a week(/)


[Blue Lotus Daily]:1211 HK/300750 SZ/BEKE US/LKNCY US

<ul>
<li>Counting of consumption differs among different countries. Chinese definition of consumption (social retail sales) leave out many categories that are included in the definition of consumption of Japan and US;</li>
<li>If we trim the consumption of Japan and US by adopting China's definition, China actually <strong>over-consumes</strong>, both by GDP and by individual categories;</li>
<li>If we expand and align China, Japan and US to consist the same categories, the conclusion of China <strong>underconsumption</strong> becomes true. The categories belong to an older and wealthy society. </li>
</ul>


Counting of consumption differs among different countries. Chinese definition of consumption (social retail sales) leave out many categories that are included in the definition of consumption of Japan and US;
If we trim the consumption of Japan and US by adopting China's definition, China actually over-consumes, both by GDP and by individual categories;
If we expand and align China, Japan and US to consist the same categories, the conclusion of China underconsumption becomes true. The categories belong to an older and wealthy society. 


How to Stimulate China's Consumption? Part I

China

Luckin Coffee Inc. provides non-alcoholic beverages. The Company offers various types of coffee. Luckin Coffee serves customers in China.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Luckin Coffee (LKNCY US)

[Blue Lotus Daily]:1211HK/LI/XPEV/NIO/BEKE/1810HK/300207SZ/300750SZ/LKNCY/9926HK/MNSO/600519CH

China and the EU are in talks to negotiate electric vehicle tariffs, while Xiaomi plans to release a low-priced model targeting low tier cities....

Blue Lotus Research Institute

[Blue Lotus Daily]:981HK/LKNCY US/BGNE US

Huawei's new supercomputing center benefits SMIC; Cotti Coffee changes formulas; AstraZeneca's results pose competition for BeiGene.

Blue Lotus Research Institute

Luckin's Small Step into Non-Coffee Drinks Is a Big Step of Its Future Directions

Luckin's Lemonade drinks are a short-term profit boost, but may not sustain due to lower quality. Luckin's pursuit of me-too SKU is worrisome to us.

Blue Lotus Research Institute

[Blue Lotus Daily]:1211 HK/300750 SZ/BEKE US/LKNCY US

Geely and SK Group deepen cooperation in batteries, PBoC urges affordable housing re-lending, Luckin expands non-coffee drinks with lemonade sales.

Blue Lotus Research Institute

How to Stimulate China's Consumption? Part I

The myth of China underconsumption depends on how you count it. China under-consumes in certain consumption categories associated with an older and...

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Blue Lotus Daily]:1211HK/LI/XPEV/NIO/BEKE/1810HK/300207SZ/300750SZ/LKNCY/9926HK/MNSO/600519CH

​China and the EU are in talks to negotiate electric vehicle tariffs, while Xiaomi plans to release a low-priced model targeting low tier cities....

Blue Lotus Research Institute

[Blue Lotus Daily]:981HK/LKNCY US/BGNE US

​Huawei's new supercomputing center benefits SMIC; Cotti Coffee changes formulas; AstraZeneca's results pose competition for BeiGene.

Blue Lotus Research Institute

Luckin's Small Step into Non-Coffee Drinks Is a Big Step of Its Future Directions

​Luckin's Lemonade drinks are a short-term profit boost, but may not sustain due to lower quality. Luckin's pursuit of me-too SKU is worrisome to us.

Blue Lotus Research Institute

[Blue Lotus Daily]:1211 HK/300750 SZ/BEKE US/LKNCY US

​Geely and SK Group deepen cooperation in batteries, PBoC urges affordable housing re-lending, Luckin expands non-coffee drinks with lemonade sales.

Blue Lotus Research Institute

How to Stimulate China's Consumption? Part I

The myth of China underconsumption depends on how you count it. China under-consumes in certain consumption categories associated with an older and...

Blue Lotus Research Institute

China and the EU are in talks to negotiate electric vehicle tariffs, while Xiaomi plans to release a low-priced model targeting low tier cities....

Huawei's new supercomputing center benefits SMIC; Cotti Coffee changes formulas; AstraZeneca's results pose competition for BeiGene.

Luckin's Lemonade drinks are a short-term profit boost, but may not sustain due to lower quality. Luckin's pursuit of me-too SKU is worrisome to us.

Geely and SK Group deepen cooperation in batteries, PBoC urges affordable housing re-lending, Luckin expands non-coffee drinks with lemonade sales.