Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet 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>NTES US/BABA US: NPPA Released August Domestic Game Code Approvals.(+/+)</li>
<li>700 HK: 700 HK: &lt;Honor of Kings&gt; July Grossing Up 26% MoM. (+)</li>
<li>BABA US: Alibaba backed AI-startup launches video and music generation model (+)</li>
</ul>


NTES US/BABA US: NPPA Released August Domestic Game Code Approvals.(+/+)
700 HK: 700 HK: &lt;Honor of Kings&gt; July Grossing Up 26% MoM. (+)
BABA US: Alibaba backed AI-startup launches video and music generation model (+)


[Blue Lotus Daily-TMT Update]:NTESUS/BABAUS/700HK/PDDUS/JDUS/VIPSUS/1810HK/SHEIN/WMTUS/4385JP/EBAYUS

Equity Bottom-Up

<ul>
<li>Vipshop reported C2Q24 revenue and profit were in-line vs. the street, but the mid-point of C3Q revenue guide missed by 8% due to soft apparel demand;</li>
<li>VIPS has been post growth for some time. However, its healthy cash flow ensures a 75% dividend payout ratio as promised by the company. </li>
<li>We cut our CY24 EPS estimate by 8.4% due to soft apparel demand, leading to a US$ 14.5 TP, but maintain BUY on a post-subsidy recovery. </li>
</ul>


Vipshop reported C2Q24 revenue and profit were in-line vs. the street, but the mid-point of C3Q revenue guide missed by 8% due to soft apparel demand;
VIPS has been post growth for some time. However, its healthy cash flow ensures a 75% dividend payout ratio as promised by the company. 
We cut our CY24 EPS estimate by 8.4% due to soft apparel demand, leading to a US$ 14.5 TP, but maintain BUY on a post-subsidy recovery. 


[Vipshop (VIPS US, BUY, TP US$14.5) TP Change]: Buying for Dividend Yield and Cash Flow Yield

Andy Fu

<ul>
<li>We call the communique courageous because it pressed ahead on three fundamental, long standing issues of Chinese economy: fiscal revenue, social security and over-capacity;</li>
<li>But we question its timing as well as the wisdom of staunch refusal to print money to revive consumption. In our view, such measure doesn't run counter to the communique;</li>
<li>We believe the likelihood points to prolonged slow recovery in consumption, investment, job market and eventually manufacturing. But we see positive momentum in healthcare, infrastructure and eventually consumption.</li>
</ul>


We call the communique courageous because it pressed ahead on three fundamental, long standing issues of Chinese economy: fiscal revenue, social security and over-capacity;
But we question its timing as well as the wisdom of staunch refusal to print money to revive consumption. In our view, such measure doesn't run counter to the communique;
We believe the likelihood points to prolonged slow recovery in consumption, investment, job market and eventually manufacturing. But we see positive momentum in healthcare, infrastructure and eventually consumption.


The 3rd Plenum of CCPCC Announced An Courageous But Tough-To-Execute Communique

<ul>
<li>PDD US/BABA US/JD US/VIPS US/3690 HK: NBS publishes social retail consumption data for June 2024 (-/+)</li>
<li>1024 HK: Kuaishou Releases First Fully AI-Generated Micro-Drama, Receives Positive Reviews.（+）</li>
<li>BABA US/PDD US/1519 HK/ZTO US: Weekly parcel volume shows 26% y-o-y growth (+)</li>
</ul>


PDD US/BABA US/JD US/VIPS US/3690 HK: NBS publishes social retail consumption data for June 2024 (-/+)
1024 HK: Kuaishou Releases First Fully AI-Generated Micro-Drama, Receives Positive Reviews.（+）
BABA US/PDD US/1519 HK/ZTO US: Weekly parcel volume shows 26% y-o-y growth (+)


[Blue Lotus Daily-TMT Update]:PDD US/BABA US/JD US/VIPS/3690HK/1024 HK/1519HK/ZTO/TCOM/NTES/BILI/

China New Economy Equity Analyst, Blue Lotus Research Institute

Robert McKay

China New Economy Equity Analyst

<ul>
<li>There have been various rumors regarding China's consumption in general and e-commerce trend in particular. Two of the recent ones are <strong>weak 618 sales</strong> and <strong>keep-it-refunds</strong>;</li>
<li>While we are in general pessimistic on Chinese consumption in the medium term, government subsidies and consumption vouchers are helping to keep consumption, especially e-commerce, going in healthy pace;</li>
<li>Our TOP PICKS are Alibaba and PDD, both trading at attractive valuations of 7.4x and 9.5x CY24 P/E. Solid June consumption, positive 3Q outlook, and EPS expansion are upcoming catalysts.</li>
</ul>


There have been various rumors regarding China's consumption in general and e-commerce trend in particular. Two of the recent ones are weak 618 sales and keep-it-refunds;
While we are in general pessimistic on Chinese consumption in the medium term, government subsidies and consumption vouchers are helping to keep consumption, especially e-commerce, going in healthy pace;
Our TOP PICKS are Alibaba and PDD, both trading at attractive valuations of 7.4x and 9.5x CY24 P/E. Solid June consumption, positive 3Q outlook, and EPS expansion are upcoming catalysts.


China's E-Commerce Is Not as Bad as the Stock Prices Suggest

China

Vipshop Holdings Ltd. retails branded products at discount over the Internet. The Company retails through flash sales, in which limited quantities of an item are sold at deep discount for a specified period of time.

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

Vipshop Holdings (VIPS US)

[Blue Lotus Daily-TMT Update]:NTESUS/BABAUS/700HK/PDDUS/JDUS/VIPSUS/1810HK/SHEIN/WMTUS/4385JP/EBAYUS

NPPA approves new games, Honor of Kings sees revenue increase, Alibaba-backed AI startup introduces new model for video and music generation.

Blue Lotus Research Institute

[Vipshop (VIPS US, BUY, TP US$14.5) TP Change]: Buying for Dividend Yield and Cash Flow Yield

Vipshop's revenue and profit in-line with expectations, but soft apparel demand impacts future revenue guidance. Analysts maintain BUY rating on...

Blue Lotus Research Institute

The 3rd Plenum of CCPCC Announced An Courageous But Tough-To-Execute Communique

The communique of CCP's 3rd Plenum of the 20th CC has pressed forward with tough reforms in the next five years. While timing is quite bad, it...

Blue Lotus Research Institute

[Blue Lotus Daily-TMT Update]:PDD US/BABA US/JD US/VIPS/3690HK/1024 HK/1519HK/ZTO/TCOM/NTES/BILI/

NBS releases social retail consumption data for June 2024, Kuaishou's AI-generated micro-drama receives positive reviews, and weekly parcel volume...

Blue Lotus Research Institute

China's E-Commerce Is Not as Bad as the Stock Prices Suggest

Rumors of weak 618 sales and high keep-it-refunds ratios were unfounded. While long term consumption in China does have challenges, near term...

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Blue Lotus Daily-TMT Update]:NTESUS/BABAUS/700HK/PDDUS/JDUS/VIPSUS/1810HK/SHEIN/WMTUS/4385JP/EBAYUS

​NPPA approves new games, Honor of Kings sees revenue increase, Alibaba-backed AI startup introduces new model for video and music generation.

Blue Lotus Research Institute

[Vipshop (VIPS US, BUY, TP US$14.5) TP Change]: Buying for Dividend Yield and Cash Flow Yield

​Vipshop's revenue and profit in-line with expectations, but soft apparel demand impacts future revenue guidance. Analysts maintain BUY rating on...

Blue Lotus Research Institute

The 3rd Plenum of CCPCC Announced An Courageous But Tough-To-Execute Communique

​The communique of CCP's 3rd Plenum of the 20th CC has pressed forward with tough reforms in the next five years. While timing is quite bad, it...

Blue Lotus Research Institute

[Blue Lotus Daily-TMT Update]:PDD US/BABA US/JD US/VIPS/3690HK/1024 HK/1519HK/ZTO/TCOM/NTES/BILI/

​NBS releases social retail consumption data for June 2024, Kuaishou's AI-generated micro-drama receives positive reviews, and weekly parcel volume...

Blue Lotus Research Institute

China's E-Commerce Is Not as Bad as the Stock Prices Suggest

​Rumors of weak 618 sales and high keep-it-refunds ratios were unfounded. While long term consumption in China does have challenges, near term...

Blue Lotus Research Institute

NPPA approves new games, Honor of Kings sees revenue increase, Alibaba-backed AI startup introduces new model for video and music generation.

Vipshop's revenue and profit in-line with expectations, but soft apparel demand impacts future revenue guidance. Analysts maintain BUY rating on...

The communique of CCP's 3rd Plenum of the 20th CC has pressed forward with tough reforms in the next five years. While timing is quite bad, it...

NBS releases social retail consumption data for June 2024, Kuaishou's AI-generated micro-drama receives positive reviews, and weekly parcel volume...

Rumors of weak 618 sales and high keep-it-refunds ratios were unfounded. While long term consumption in China does have challenges, near term...