Blue Lotus Research Institute

Andy Fu

China growth and global non-US Internet equities

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>2025's Chinese New Year (CNY)  closed with a bang. Home appliances, mobile phones and general merchandises were robust.  Catering saw steady growth and box office hit a record high;</li>
<li>Domestic travel was vibrant. So was inbound overseas travel. But outbound overseas travel was in the doldrums on several unfavorable incidents involving kidnapping in Thailand and flu in Japan; </li>
<li>We predict a 65% chance of a housing resurrection post CNY.  We observe an improvement in consumer sentiment as life gradually returning to normal. </li>
</ul>


2025's Chinese New Year (CNY)  closed with a bang. Home appliances, mobile phones and general merchandises were robust.  Catering saw steady growth and box office hit a record high;
Domestic travel was vibrant. So was inbound overseas travel. But outbound overseas travel was in the doldrums on several unfavorable incidents involving kidnapping in Thailand and flu in Japan; 
We predict a 65% chance of a housing resurrection post CNY.  We observe an improvement in consumer sentiment as life gradually returning to normal. 


2025's Chinese New Year Consumption Tiltering Towards the Positive

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

<ul>
<li>Inclusion of smartphone/tablet/smartwatch to trade-in subsidy will drive high single digit incremental growth for JD and Xiaomi, low single digit incremental growth for Alibaba in 2025;</li>
<li>New Year's Day transportation volume down, hotel consumption up, constituting a decent performance for a shorter holiday vs. last year. This bodes well for tourism for Chinese New Year; </li>
<li>China stepped up its signaling effort to Trump Administration that trade war measures will be retaliated. This week China added LFP battery technology to its own entity list.</li>
</ul>


Inclusion of smartphone/tablet/smartwatch to trade-in subsidy will drive high single digit incremental growth for JD and Xiaomi, low single digit incremental growth for Alibaba in 2025;
New Year's Day transportation volume down, hotel consumption up, constituting a decent performance for a shorter holiday vs. last year. This bodes well for tourism for Chinese New Year; 
China stepped up its signaling effort to Trump Administration that trade war measures will be retaliated. This week China added LFP battery technology to its own entity list.


China Growth Equity Weekly Wrap (1/2025): Xiaomi, JD, BABA, TRIP, ATAT, CATL, BYD, BEKE, Luckin, BZ

China New Economy Equity Analyst, Blue Lotus Research Institute

Robert McKay

China New Economy Equity Analyst

Equity Bottom-Up

<ul>
<li>Despite being breakeven just quarters ago, <a href="https://www.smartkarma.com/entities/jd-logistics-inc" target="_blank" data-smartkarma-citation="entities:31500:1" rel="noopener">JD Logistics (2618 HK)</a> has achieved profitability on par with global peers nearly 3x its size. Margin still has upside with further subsidiary integration;</li>
<li>JDL is still positioned to accelerate revenue by taking share from <a href="https://www.smartkarma.com/entities/s-f-holding" target="_blank" data-smartkarma-citation="entities:44093:1" rel="noopener">S.F. Holding (6936 HK)</a> in untapped opportunities, including domestic B2C (Taobao/Tmall), cross-border B2C (Kuayue acquisition), and B2B;</li>
<li>JDL's stock price rose 60%+ while it was our top pick for 2024. We reiterate the company as our TOP buy idea in the China logistics space for 2025;</li>
</ul>


Despite being breakeven just quarters ago, JD Logistics (2618 HK) has achieved profitability on par with global peers nearly 3x its size. Margin still has upside with further subsidiary integration;
JDL is still positioned to accelerate revenue by taking share from S.F. Holding (6936 HK) in untapped opportunities, including domestic B2C (Taobao/Tmall), cross-border B2C (Kuayue acquisition), and B2B;
JDL's stock price rose 60%+ while it was our top pick for 2024. We reiterate the company as our TOP buy idea in the China logistics space for 2025;


China Logistics (Part 2): All JD Logistic Roads Lead Back to S.F. Express

<ul>
<li>ZTO's market share losses may accelerate as peers continue to cut prices. Worse yet, margins of its competitors are improving, which will sustain the war for a longer time;</li>
<li>ZTO has maintained profitability growth despite the price war, but we think this situation is unsustainable. Management will eventually need to sacrifice profitability or suffer accelerated share loss. </li>
<li>We now take a more bearish view on ZTO as we see no quick solution to the profit and market share balancing act. </li>
</ul>


ZTO's market share losses may accelerate as peers continue to cut prices. Worse yet, margins of its competitors are improving, which will sustain the war for a longer time;
ZTO has maintained profitability growth despite the price war, but we think this situation is unsustainable. Management will eventually need to sacrifice profitability or suffer accelerated share loss. 
We now take a more bearish view on ZTO as we see no quick solution to the profit and market share balancing act. 


China Logistics (Part 1): ZTO Has a Unit Economics Problem

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/maanshan-dingtai-rare-a" target="_blank" data-smartkarma-citation="entities:4128:1" rel="noopener">S.F. Holding (002352 CH)</a>, China’s largest express delivery company, raised around US$860m in its H-share listing in Hong Kong.</li>
<li>SFH is the largest integrated express logistics service provider in China and the fourth largest in the world. It has been listed on the Shenzhen Stock Exchange since 2017.</li>
<li>We have covered the company and deal background in our previous notes. In this note, we talk about the trading dynamics.</li>
</ul>



S.F. Holding (002352 CH), China’s largest express delivery company, raised around US$860m in its H-share listing in Hong Kong.
SFH is the largest integrated express logistics service provider in China and the fourth largest in the world. It has been listed on the Shenzhen Stock Exchange since 2017.
We have covered the company and deal background in our previous notes. In this note, we talk about the trading dynamics.


SF Holdings A/H Trading - Strong Demand but Is Probably Close to Fair Value

Hong Kong

YTO Express Holdings Limited provides freight and logistics services. The Company offers air freight, marine transportation, information technology capabilities, warehousing, order assembly, and other related services.  YTO Express Holdings provides services worldwide.

YTO Express (International) Holdings (6123 HK)

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

YTO Express (International) Holdings (6123 HK)

2025's Chinese New Year Consumption Tiltering Towards the Positive

China's spring festival goods consumption sees solid growth and domestic tourism service thrives. Consumer sentiment increases slightly but income...

Blue Lotus Research Institute

China Growth Equity Weekly Wrap (1/2025): Xiaomi, JD, BABA, TRIP, ATAT, CATL, BYD, BEKE, Luckin, BZ

Inclusion of smartphones in trade-in subsidy boosts growth for JD and Xiaomi, while China signals retaliation in trade war with US. Good signs for...

Blue Lotus Research Institute

China Logistics (Part 2): All JD Logistic Roads Lead Back to S.F. Express

JD Logistics has achieved profitability on par with global peers nearly 3x its size, with upside potential in margins and opportunities to...

Blue Lotus Research Institute

China Logistics (Part 1): ZTO Has a Unit Economics Problem

ZTO faces increasing market share losses and margin pressure as competitors cut prices, leading to a more bearish outlook on the company's future...

Blue Lotus Research Institute

SF Holdings A/H Trading - Strong Demand but Is Probably Close to Fair Value

S.F. Holding (002352 CH), China’s largest express delivery company, raised around US$860m in its H-share listing in Hong Kong. In this note, we...

Sumeet Singh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

2025's Chinese New Year Consumption Tiltering Towards the Positive

​China's spring festival goods consumption sees solid growth and domestic tourism service thrives. Consumer sentiment increases slightly but income...

Blue Lotus Research Institute

China Growth Equity Weekly Wrap (1/2025): Xiaomi, JD, BABA, TRIP, ATAT, CATL, BYD, BEKE, Luckin, BZ

​Inclusion of smartphones in trade-in subsidy boosts growth for JD and Xiaomi, while China signals retaliation in trade war with US. Good signs for...

Blue Lotus Research Institute

China Logistics (Part 2): All JD Logistic Roads Lead Back to S.F. Express

​JD Logistics has achieved profitability on par with global peers nearly 3x its size, with upside potential in margins and opportunities to...

Blue Lotus Research Institute

China Logistics (Part 1): ZTO Has a Unit Economics Problem

​ZTO faces increasing market share losses and margin pressure as competitors cut prices, leading to a more bearish outlook on the company's future...

Blue Lotus Research Institute

SF Holdings A/H Trading - Strong Demand but Is Probably Close to Fair Value

S.F. Holding (002352 CH), China’s largest express delivery company, raised around US$860m in its H-share listing in Hong Kong. In this note, we...

Sumeet Singh

China's spring festival goods consumption sees solid growth and domestic tourism service thrives. Consumer sentiment increases slightly but income...

Inclusion of smartphones in trade-in subsidy boosts growth for JD and Xiaomi, while China signals retaliation in trade war with US. Good signs for...

JD Logistics has achieved profitability on par with global peers nearly 3x its size, with upside potential in margins and opportunities to...

ZTO faces increasing market share losses and margin pressure as competitors cut prices, leading to a more bearish outlook on the company's future...