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>LKNCY US:Luckin Coffee's Moutai Flavored Latte is Gradually Being Phased Out (-)</li>
<li>1519 HK/ZTO US: Weekly parcel volume grew ~33% y-o-y (+)</li>
<li>981 HK/1810 HK/AAPL US/NVDA US: SMIC’s upcoming N+3 process to narrow performance with TSMC’s 5nm (+/-/-/-)</li>
</ul>


LKNCY US:Luckin Coffee's Moutai Flavored Latte is Gradually Being Phased Out (-)
1519 HK/ZTO US: Weekly parcel volume grew ~33% y-o-y (+)
981 HK/1810 HK/AAPL US/NVDA US: SMIC’s upcoming N+3 process to narrow performance with TSMC’s 5nm (+/-/-/-)


[Blue Lotus Daily]:LKNCY US/1519 HK/ZTO US/981 HK/1810 HK/AAPL US/NVDA US/BEKE US

<ul>
<li>1810 HK/AAPL: Xiaomi’s China unit volume grew 17% yoy in 2Q (+/-)</li>
<li>1810 HK: Xiaomi acquires more land to build another EV factory (+)</li>
<li>981 HK/1810 HK: SMIC’s upcoming “5nm” process to feature significant efficiency improvement (+/-)</li>
</ul>


1810 HK/AAPL: Xiaomi’s China unit volume grew 17% yoy in 2Q (+/-)
1810 HK: Xiaomi acquires more land to build another EV factory (+)
981 HK/1810 HK: SMIC’s upcoming “5nm” process to feature significant efficiency improvement (+/-)


[Blue Lotus Daily]:1810 HK/AAPL/981 HK/LKNCY US/BZ US/LI US/1211 HK

China New Economy Equity Analyst, Blue Lotus Research Institute

Robert McKay

China New Economy Equity Analyst

<ul>
<li>US semiconductor restrictions are limiting China's access to advanced AI accelerators, causing a widening gap in AI compute. The US will expand its lead over China to ~7x by 2025.</li>
<li>Although China has domestic alternatives, bottlenecks due to separate US restrictions on semiconductor equipment are hindering yields and capacity expansions, effectively limiting China’s capacity to train state-of-the-art AI models.</li>
<li>To maximize AI compute, Huawei will likely curtail smartphone semiconductors in favor of AI accelerators. We expect manufacturers offering mid-end Android devices like <a href="https://www.smartkarma.com/entities/xiaomi-corp" target="_blank" data-smartkarma-citation="entities:24409:1" rel="noopener">Xiaomi Corp (1810 HK)</a> to benefit first.</li>
</ul>


US semiconductor restrictions are limiting China's access to advanced AI accelerators, causing a widening gap in AI compute. The US will expand its lead over China to ~7x by 2025.
Although China has domestic alternatives, bottlenecks due to separate US restrictions on semiconductor equipment are hindering yields and capacity expansions, effectively limiting China’s capacity to train state-of-the-art AI models.
To maximize AI compute, Huawei will likely curtail smartphone semiconductors in favor of AI accelerators. We expect manufacturers offering mid-end Android devices like Xiaomi Corp (1810 HK) to benefit first.


Demand for AI Chips Might Cut Huawei's Smartphone Semiconductor Short

<ul>
<li>Macro News Update: Our take from the decision draft of the CCP 3rd Plenary Session</li>
<li>1519 HK/ZTO US: Weekly parcel volume shows 31% y-o-y growth (+)</li>
<li>1810 HK/981 HK: Huawei’s mid-premium Nova 13 smartphone to be delayed (+//)</li>
</ul>


Macro News Update: Our take from the decision draft of the CCP 3rd Plenary Session
1519 HK/ZTO US: Weekly parcel volume shows 31% y-o-y growth (+)
1810 HK/981 HK: Huawei’s mid-premium Nova 13 smartphone to be delayed (+//)


[Blue Lotus Daily]:1519 HK/ZTO US/1810 HK/981 HK/XPEV US/LI US/NIO US/QCOM US/TSMC US

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

Semiconductor Manufacturing International Corp (SMIC) / Event-Driven

Semiconductor Manufacturing International Corp (SMIC)

<ul>
<li><em>The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.</em></li>
<li>SOUTHBOUND inflow strong but SOEs not leading and Hang Seng down hard. Bank buying minimal. NORTHBOUND saw significant selling, but A-share indices generally strong on the week. Window-dressing?</li>
<li>AH Premia rose 3.3% on average. Really bad week for H vs A as Liquid Hs underperformed their As by 4%. Stunning week really. Relative performance a sea of red.</li>
</ul>


The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
SOUTHBOUND inflow strong but SOEs not leading and Hang Seng down hard. Bank buying minimal. NORTHBOUND saw significant selling, but A-share indices generally strong on the week. Window-dressing?
AH Premia rose 3.3% on average. Really bad week for H vs A as Liquid Hs underperformed their As by 4%. Stunning week really. Relative performance a sea of red.


A/H Premium Tracker (To 19 Jul 2024): SB Bought, NB Sold, HK Crushed Vs A-Shares

China

Semiconductor Manufacturing International Corporation operates a semiconductor foundry. The Company provides integrated circuit foundry and technology services including the testing, development, design, manufacturing, packaging, and sale of integrated circuits. Semiconductor Manufacturing International offers its products and services around the world.

Semiconductor Manufacturing International Corp (SMIC) (981 HK)

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

Semiconductor Manufacturing International Corp (SMIC) (981 HK)

[Blue Lotus Daily]:LKNCY US/1519 HK/ZTO US/981 HK/1810 HK/AAPL US/NVDA US/BEKE US

Luckin Coffee is phasing out Moutai Flavored Latte, parcel volume is growing, and SMIC's new process will compete with TSMC's 5nm.

Blue Lotus Research Institute

[Blue Lotus Daily]:1810 HK/AAPL/981 HK/LKNCY US/BZ US/LI US/1211 HK

Xiaomi's China unit sees growth, acquires land for new EV factory, while SMIC's upcoming "5nm" process promises efficiency boost.

Blue Lotus Research Institute

Demand for AI Chips Might Cut Huawei's Smartphone Semiconductor Short

US AI accelerator and wafer equipment restrictions are widening the US/China AI compute gap. Expect Huawei to curtail smartphone IC in favor of AI...

Blue Lotus Research Institute

[Blue Lotus Daily]:1519 HK/ZTO US/1810 HK/981 HK/XPEV US/LI US/NIO US/QCOM US/TSMC US

CCP 3rd Plenary Session decision draft analyzed; parcel volume growth for HK/ZTO and Huawei's Nova 13 smartphone delay.

Blue Lotus Research Institute

A/H Premium Tracker (To 19 Jul 2024): SB Bought, NB Sold, HK Crushed Vs A-Shares

As HK stocks got crushed during the week and A-shares did well, and SOUTHBOUND did not seem to buy the banks or SOEs, AH Premia jumped. The carry...

Travis Lundy

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Blue Lotus Daily]:LKNCY US/1519 HK/ZTO US/981 HK/1810 HK/AAPL US/NVDA US/BEKE US

​Luckin Coffee is phasing out Moutai Flavored Latte, parcel volume is growing, and SMIC's new process will compete with TSMC's 5nm.

Blue Lotus Research Institute

[Blue Lotus Daily]:1810 HK/AAPL/981 HK/LKNCY US/BZ US/LI US/1211 HK

​Xiaomi's China unit sees growth, acquires land for new EV factory, while SMIC's upcoming "5nm" process promises efficiency boost.

Blue Lotus Research Institute

Demand for AI Chips Might Cut Huawei's Smartphone Semiconductor Short

​US AI accelerator and wafer equipment restrictions are widening the US/China AI compute gap. Expect Huawei to curtail smartphone IC in favor of AI...

Blue Lotus Research Institute

[Blue Lotus Daily]:1519 HK/ZTO US/1810 HK/981 HK/XPEV US/LI US/NIO US/QCOM US/TSMC US

​CCP 3rd Plenary Session decision draft analyzed; parcel volume growth for HK/ZTO and Huawei's Nova 13 smartphone delay.

Blue Lotus Research Institute

A/H Premium Tracker (To 19 Jul 2024): SB Bought, NB Sold, HK Crushed Vs A-Shares

As HK stocks got crushed during the week and A-shares did well, and SOUTHBOUND did not seem to buy the banks or SOEs, AH Premia jumped. The carry...

Travis Lundy

Luckin Coffee is phasing out Moutai Flavored Latte, parcel volume is growing, and SMIC's new process will compete with TSMC's 5nm.

Xiaomi's China unit sees growth, acquires land for new EV factory, while SMIC's upcoming "5nm" process promises efficiency boost.

US AI accelerator and wafer equipment restrictions are widening the US/China AI compute gap. Expect Huawei to curtail smartphone IC in favor of AI...

CCP 3rd Plenary Session decision draft analyzed; parcel volume growth for HK/ZTO and Huawei's Nova 13 smartphone delay.