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>LI/XPEV/NIO/1211 HK:  Sales of strong EV brands held up better during CNY, Li and Tesla led and AITO and BYD followed (+)</li>
<li>BEKE : ByteDance suspend self-operating home decoration business( + ) </li>
<li>ZLAB:Bristol-Myers Squibb （BMS） outsources Opdivo sales in ten southwestern provinces to Zai Lab, a long-term positive but with many prerequisites (+)</li>
</ul>


LI/XPEV/NIO/1211 HK:  Sales of strong EV brands held up better during CNY, Li and Tesla led and AITO and BYD followed (+)
BEKE : ByteDance suspend self-operating home decoration business( + ) 
ZLAB:Bristol-Myers Squibb （BMS） outsources Opdivo sales in ten southwestern provinces to Zai Lab, a long-term positive but with many prerequisites (+)


[Blue Lotus Daily]:LI/XPEV/NIO/1211 HK/BEKE/ZLAB

<ul>
<li>ATAT/TCOM: Tourism: Local government will issue RMB600mn travel consumption subsidies during CNY(+)</li>
<li>9995 HK/BGNE/9926 HK/1801 HK/1877 HK:The National Medical Insurance Administration issued new regulations on the initial price of newly launched drugs to protect the independent pricing of innovative drugs.(/)</li>
<li>300750 SZ：Porsche's new Taycan doubles cruising range, uses CATL Shenxing battery(+)</li>
</ul>


ATAT/TCOM: Tourism: Local government will issue RMB600mn travel consumption subsidies during CNY(+)
9995 HK/BGNE/9926 HK/1801 HK/1877 HK:The National Medical Insurance Administration issued new regulations on the initial price of newly launched drugs to protect the independent pricing of innovative drugs.(/)
300750 SZ：Porsche's new Taycan doubles cruising range, uses CATL Shenxing battery(+)


[Blue Lotus Daily]: LKNCY/ZLAB/9995 HK/BGNE/9926 HK/1801 HK/1877 HK/ATAT/TCOM/1211 HK/LI/NIO/XPEV

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

<ul>
<li>CMS's way of in-licensing products has shifted from CSO model to asset-purchase model so as to enhance control on the assets. But the transformation hasn’t been recognized by the market.     </li>
<li>Despite outstanding fundamentals, <a href="https://www.smartkarma.com/entities/china-medical-system-holdings" target="_blank" data-smartkarma-citation="entities:18736:1" rel="noopener">CMS</a>’s valuation remains low. Doubts about the Company's real R&amp;D capabilities/core competitiveness and the negative image due to past financial fraud could be the reasons.</li>
<li>CMS would encounter performance headwinds in 2023/2024 due to VBP, but revenue/profit growth is expected to pick up in 2025. It’s still a good defensive choice in a bear market.</li>
</ul>


CMS's way of in-licensing products has shifted from CSO model to asset-purchase model so as to enhance control on the assets. But the transformation hasn’t been recognized by the market.     
Despite outstanding fundamentals, CMS’s valuation remains low. Doubts about the Company's real R&amp;D capabilities/core competitiveness and the negative image due to past financial fraud could be the reasons.
CMS would encounter performance headwinds in 2023/2024 due to VBP, but revenue/profit growth is expected to pick up in 2025. It’s still a good defensive choice in a bear market.


China Medical System (867 HK) - A Wise Choice in a Bear Market

<ul>
<li>ATAT/600754 CH: Hotel industry update - Jinjiang disclose Oct-Nov RevPAR recovered to 105% of 2019, slightly better than industry average.(+)</li>
<li>1211HK/LI/XPEV/NIO: Huawei Harmony Intelligent Mobility Alliance to establish independent stores(-)</li>
<li>ZLAB/ ARGX:  Efgartigimod failed two late stage indication trials (-)</li>
</ul>


ATAT/600754 CH: Hotel industry update - Jinjiang disclose Oct-Nov RevPAR recovered to 105% of 2019, slightly better than industry average.(+)
1211HK/LI/XPEV/NIO: Huawei Harmony Intelligent Mobility Alliance to establish independent stores(-)
ZLAB/ ARGX:  Efgartigimod failed two late stage indication trials (-)


[Blue Lotus Daily]: ATAT/600754 CH/1211 HK/LI/XPEV/NIO/ZLAB/ARGX/9995 HK/3692 HK

<ul>
<li>Local news reported two positive developments for Zai Lab’s FcRn inhibitor Efgartigimod: (1) Rival CSPC/HarbourBio withdrew BLA for competing drug Batoclimab (HBM9161), (2) Efgartigimod was included in 2024 NDRL;</li>
<li>We raise Zai Lab’s 2024 top line by 8.8% but keep non-GAAP operating loss largely unchanged；</li>
<li>We raise TP by US$2 to US$20 and maintain SELL.</li>
</ul>


Local news reported two positive developments for Zai Lab’s FcRn inhibitor Efgartigimod: (1) Rival CSPC/HarbourBio withdrew BLA for competing drug Batoclimab (HBM9161), (2) Efgartigimod was included in 2024 NDRL;
We raise Zai Lab’s 2024 top line by 8.8% but keep non-GAAP operating loss largely unchanged；
We raise TP by US$2 to US$20 and maintain SELL.


[Zai LAB (ZLAB US, SELL, TP US$20) TP Change]: Two Positive News Drove up 2024 Growth Target

China

Zai Lab Limited operates as a bio-pharmaceutical company. The Company researches and develops therapeutic technology for antibody-based oncology, autoimmune, and infectious diseases treatments. Zai Lab also manufactures drugs in the form of capsules, injections, and liquids. Zai Lab serves patients worldwide.

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Zai Lab Ltd (ZLAB US)

[Blue Lotus Daily]:LI/XPEV/NIO/1211 HK/BEKE/ZLAB

Strong EV brands like Li and Tesla saw better sales during CNY; ByteDance suspends home decoration business; BMS outsources Opdivo sales to Zai...

Blue Lotus Research Institute

[Blue Lotus Daily]: LKNCY/ZLAB/9995 HK/BGNE/9926 HK/1801 HK/1877 HK/ATAT/TCOM/1211 HK/LI/NIO/XPEV

Local government plans to provide RMB600mn in travel subsidies; new regulations protect pricing of innovative drugs; Porsche's Taycan now has...

Blue Lotus Research Institute

China Medical System (867 HK) - A Wise Choice in a Bear Market

CMS's performance low point is 2023/2024, but high growth returns in 2025. Despite bad image due to past financial fraud, high dividend/strong...

Xinyao (Criss) Wang

[Blue Lotus Daily]: ATAT/600754 CH/1211 HK/LI/XPEV/NIO/ZLAB/ARGX/9995 HK/3692 HK

Jinjiang's Oct-Nov RevPAR recovered to 105% of 2019, outperforming industry average. Huawei Harmony Alliance to establish independent stores....

Blue Lotus Research Institute

[Zai LAB (ZLAB US, SELL, TP US$20) TP Change]: Two Positive News Drove up 2024 Growth Target

Positive news for Zai Lab's Efgartigimod as rival drug is withdrawn and it is included in 2024 NDRL, leading to an 8.8% increase in top line but...

Blue Lotus Research Institute

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

[Blue Lotus Daily]:LI/XPEV/NIO/1211 HK/BEKE/ZLAB

​Strong EV brands like Li and Tesla saw better sales during CNY; ByteDance suspends home decoration business; BMS outsources Opdivo sales to Zai...

Blue Lotus Research Institute

[Blue Lotus Daily]: LKNCY/ZLAB/9995 HK/BGNE/9926 HK/1801 HK/1877 HK/ATAT/TCOM/1211 HK/LI/NIO/XPEV

​Local government plans to provide RMB600mn in travel subsidies; new regulations protect pricing of innovative drugs; Porsche's Taycan now has...

Blue Lotus Research Institute

China Medical System (867 HK) - A Wise Choice in a Bear Market

CMS's performance low point is 2023/2024, but high growth returns in 2025. Despite bad image due to past financial fraud, high dividend/strong...

Xinyao (Criss) Wang

[Blue Lotus Daily]: ATAT/600754 CH/1211 HK/LI/XPEV/NIO/ZLAB/ARGX/9995 HK/3692 HK

Jinjiang's Oct-Nov RevPAR recovered to 105% of 2019, outperforming industry average. Huawei Harmony Alliance to establish independent stores....

Blue Lotus Research Institute

[Zai LAB (ZLAB US, SELL, TP US$20) TP Change]: Two Positive News Drove up 2024 Growth Target

​Positive news for Zai Lab's Efgartigimod as rival drug is withdrawn and it is included in 2024 NDRL, leading to an 8.8% increase in top line but...

Blue Lotus Research Institute

Strong EV brands like Li and Tesla saw better sales during CNY; ByteDance suspends home decoration business; BMS outsources Opdivo sales to Zai...

Local government plans to provide RMB600mn in travel subsidies; new regulations protect pricing of innovative drugs; Porsche's Taycan now has...

Positive news for Zai Lab's Efgartigimod as rival drug is withdrawn and it is included in 2024 NDRL, leading to an 8.8% increase in top line but...