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>CPCA reported China’s 2022 EV sales of 6.49mn units, + 96.1% YoY, primarily driven by better market acceptance of EVs and favourable EV policies. </li>
<li>We think the fiercer competition will lead to divergence, which is already proven by Tesla’s price war. The followers such as Xpeng, could only be price takers and sacrifice margin.</li>
<li>We reiterate Li Auto as our top pick, as 1) better profitability; 2) positive growth outlook in 2023. We cut NIO’s TP to US$ 18.</li>
</ul>


CPCA reported China’s 2022 EV sales of 6.49mn units, + 96.1% YoY, primarily driven by better market acceptance of EVs and favourable EV policies. 
We think the fiercer competition will lead to divergence, which is already proven by Tesla’s price war. The followers such as Xpeng, could only be price takers and sacrifice margin.
We reiterate Li Auto as our top pick, as 1) better profitability; 2) positive growth outlook in 2023. We cut NIO’s TP to US$ 18.


China EV Outlook: 2023 Will Be a Year of Divergence

Articles from Caixin Global, Caixin Global

Caixin Global

Articles from Caixin Global

Caixin is a media group dedicated to providing financial and business news through periodicals, online content, mobile apps, conferences, books and TV/video programs. Caixin aims to blaze a trail that helps traditional media prosper in the new media age through integrated multimedia platforms.

News from Caixin

Cross Asset Strategy

<ul><li>China-Middle East /: Historic Middle East summits cap Xi’s year-end diplomatic push</li><li>Covid-19 /: China ends quarantine requirement for inbound travelers despite surge in Covid-19 cases</li><li>Fraud /: Fuyuan Beauty Salon’s chairman gets 16-year sentence for fundraising fraud</li></ul>

China-Middle East /: Historic Middle East summits cap Xi’s year-end diplomatic pushCovid-19 /: China ends quarantine requirement for inbound travelers despite surge in Covid-19 casesFraud /: Fuyuan Beauty Salon’s chairman gets 16-year sentence for fundraising fraud

CX Daily: Historic Middle East Summits Cap Xi’s Year-End Diplomatic Push

Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

<ul>
<li>The Global Emerging Markets weekly provides a summary of the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.</li>
<li>In our final weekly for the year, we look back at 2022 to see which stocks, countries, and currencies out and underperformed in the Global Emerging Markets.</li>
<li>We also look forward to 2023F to see what’s expected for the major GEM economies next year.  </li>
</ul>


The Global Emerging Markets weekly provides a summary of the key news and related developments impacting the largest countries and constituents of the Global Emerging Markets equity indices.
In our final weekly for the year, we look back at 2022 to see which stocks, countries, and currencies out and underperformed in the Global Emerging Markets.
We also look forward to 2023F to see what’s expected for the major GEM economies next year.  


China Specialist, Auto and Industrial Specialist

Victoria Li

<ul>
<li>Despite the remaining EV subsidies finishing next year, we expect demand to be relatively unimpacted</li>
<li>Battery supply issues should be eased with Covid lockdowns easing and new capacity expansions</li>
<li>&gt;100 new models due for launch in 2023E vs ~70 in 2022 and will keep potential customers and market excited in the sector</li>
</ul>


Despite the remaining EV subsidies finishing next year, we expect demand to be relatively unimpacted
Battery supply issues should be eased with Covid lockdowns easing and new capacity expansions
&gt;100 new models due for launch in 2023E vs ~70 in 2022 and will keep potential customers and market excited in the sector


China NEV Outlook: Life After Subsidies Is Still Beautiful

<ul>
<li>The 200 largest weighted companies in the GEM index reported average EPS growth of +12.8%y/y for 3Q22-to-date, a significant slowdown from what was reported for 2Q22.</li>
<li>60% of companies delivered positive sales surprise, same as in 2Q22, whilst 65% delivered positive EPS surprise, up from 56% in 2Q22.</li>
<li>Historically, there has been a significant difference in relative share price performance between the largest positive versus negative surprise generators, for 3 months after the reporting date.</li>
</ul>


The 200 largest weighted companies in the GEM index reported average EPS growth of +12.8%y/y for 3Q22-to-date, a significant slowdown from what was reported for 2Q22.
60% of companies delivered positive sales surprise, same as in 2Q22, whilst 65% delivered positive EPS surprise, up from 56% in 2Q22.
Historically, there has been a significant difference in relative share price performance between the largest positive versus negative surprise generators, for 3 months after the reporting date.


Global Emerging Markets: Reporting Season Summary, 3Q2022

China

NIO designs, develops, manufactures, and sells smart electric vehicles, including sedans and SUVs under its NIO, ONVO, and FIREFLY brands. The company also offers innovative power solutions such as battery swapping services and various charging options. NIO was founded in November 2014 and is headquartered in Shanghai, China.

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NIO (9866 HK)

China EV Outlook: 2023 Will Be a Year of Divergence

We think the fiercer competition in 2023 will inevitably lead to divergence. The followers such as Xpeng, could only sacrifice margin. We reiterate...

Blue Lotus Research Institute

CX Daily: Historic Middle East Summits Cap Xi’s Year-End Diplomatic Push

Historic Middle East summits cap Xi’s year-end diplomatic push. China ends quarantine requirement for inbound travelers. Fuyuan Beauty Salon’s...

Caixin Global

GEM Weekly: 2022 Yearend Edition

In our final weekly for the year, we look back at 2022 to see which GEM stocks, countries, and currencies out and underperformed, and look forward...

Wium Malan, CFA

China NEV Outlook: Life After Subsidies Is Still Beautiful

Despite the remaining EV subsidies finishing next year, we expect demand to be relatively unimpacted. Battery supply issues should be eased with...

Victoria Li

Global Emerging Markets: Reporting Season Summary, 3Q2022

In this quarterly insight, we analyse recent GEM reporting trends with reference to Sales- and EPS growth, size and percentage of positive...

Wium Malan, CFA

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