Summary of Pan-Asia Internet Research Conference Call Industry Overview - **Pan-Asia Internet Sector**: The conference call focused on the outlook for the Pan-Asia internet sector, highlighting the impact of AI adoption on monetization and margins for 2026 [1][4]. Key Insights by Region China Internet - **Performance**: China's internet sector led in 2025 with a +31% return, outperforming the US (+20%), Korea (+14%), SEA (+11%), Japan (+10%), and India (+9%) [5]. - **AI Focus**: Key themes for 2026 include: - Growth in recurring revenues from cloud infrastructure and AI model usage. - Competition among AI chatbots for user traffic. - Companies deploying proprietary AI agents for user engagement and monetization [8]. - **Top Picks**: Tencent and Alibaba as core AI plays, along with Trip.com and NetEase for stable earnings growth [8]. India Internet - **Operating Margins**: Expected improvement in operating margins driven by operating leverage and better unit economics, particularly for companies like Swiggy and Paytm [7]. - **Key Themes**: - Intense competition in quick commerce. - Regulatory easing for fintech, particularly for Paytm. - Rebound in online travel agencies (OTAs) due to sustained demand [7]. - **Top Picks**: Eternal and MakeMyTrip [7]. Korea Internet - **Market Dynamics**: - Coupang expected to gain market share in e-commerce and food delivery. - Integration of AI in KakaoTalk to enhance search capabilities [9]. - Selective approach to gaming due to competition and delays in major game releases [9]. - **Top Picks**: Coupang for e-commerce, Krafton for gaming, and HYBE for K-pop entertainment [9]. Japan Internet - **Growth Drivers**: - Solid online ads market driven by video and staffing ads, while search ads stagnate. - Mid-single-digit growth expected in e-commerce, supported by AI recommendations [10]. - **Top Picks**: Recruit and Nintendo [10]. ASEAN Internet - **Growth Potential**: - SEA positioned as an AI data center hub, supporting digital economy growth. - Intensifying competition between Shopee and TikTok in e-commerce [11]. - **Top Picks**: Grab and GoTo for operational efficiencies and potential synergies from consolidation [11]. Financial Metrics and Valuations - **China Internet Valuations**: - Alibaba Group: Target price of $225, representing a 54.9% upside [13]. - JD.com: Target price of $44, with a 57.8% upside [13]. - **Korea Internet Valuations**: - Coupang: Target price of $28, with an 18.7% upside [12]. - Krafton: Target price of $440, with a 78.9% upside [12]. - **India Internet Valuations**: - Eternal: Target price of $440, with a 58.3% upside [12]. Additional Insights - **Regulatory Developments**: Anticipated changes in India's laws regarding multi-brand retail FDI and fintech regulations [7]. - **Consumer Behavior**: Increased productivity from AI tools may lead to more leisure time, benefiting sectors like travel and online gaming [8]. This summary encapsulates the key points discussed during the conference call, providing insights into the performance and outlook of the Pan-Asia internet sector across various regions.

Summary of Key Points from the Conference Call Industry Overview - The China internet sector has shown strong performance in 2025, with a year-to-date return of +36.5%, outperforming Southeast Asia (+18.3%), India (+17.6%), Japan (+16.8%), the US (+16.2%), and Korea (+12.8%) [1][16] - Geopolitical tensions and AI supply-chain issues are expected to keep China's internet companies trading at discounts compared to global peers [1][2] Core Themes and Insights - **AI Competition and Productivity Gains**: The competition among AI players in China is anticipated to intensify in 2026, focusing on AI cloud infrastructure, chatbots, and applications [1][2] - **Monetization Lag**: Monetization of AI technologies is expected to lag behind user traffic growth, particularly when compared to global peers [1][2] - **Top Picks for 1H26**: Recommended stocks include Tencent and Alibaba as core AI plays, Trip.com and NetEase for stable earnings growth, and Century Huatong among A shares [1][2] AI Market Dynamics - **AI Chatbot Penetration**: ChatGPT leads globally with 800 million monthly active users (MAUs), while Bytedance's Dola and Doubao combined rank third with approximately 250 million MAUs [3] - **User Traffic Competition**: Major internet players are competing for user traffic through AI chatbots, which is crucial for future ecosystem monetization [2] Consumer Behavior and Spending - **Leisure and Entertainment Spending**: The adoption of AI tools is expected to enhance consumer productivity, leading to increased spending on leisure and entertainment, particularly in travel and online gaming [4] - **Stable Earnings Growth**: Online travel agencies (OTAs) and gaming companies are projected to benefit from resilient consumer spending [4] Investment Risks - **Geopolitical and Economic Risks**: Risks include geopolitical tensions, AI supply-chain constraints, muted consumer sentiment without stimulus policies, and intensified competition in AI applications [5] - **Profitability Concerns**: The potential for profit lock-in through membership investments and a slowdown in capital returns are highlighted as significant risks [5] Financial Performance Insights - **3Q25 Results**: Among 44 internet companies, 18 reported revenue beats, and 27 reported earnings beats. The guidance for 4Q25 showed mixed results, with some companies exceeding expectations while others fell short [6][10] - **Year-to-Date Share Price Performance**: Alibaba leads with an 86% return, followed by Tencent at 47%. Meituan has underperformed with a -32% return [16][28] Conclusion - The China internet sector is poised for growth driven by AI advancements, but faces challenges from geopolitical risks and competitive pressures. Companies like Tencent and Alibaba are positioned as key players in this evolving landscape, while consumer spending trends indicate resilience in leisure and entertainment sectors.

Core Insights - The competition among platforms like Shopee, Lazada, and TikTok Shop in Southeast Asia is intensifying, with a focus on live streaming sales and cross-border subsidies, leading to a surge in e-commerce order volumes and rapid growth in logistics services [1][2] - Chinese companies are aggressively expanding into the Southeast Asian market, with notable investments from Jitu, JD Logistics, and Cainiao, indicating a strategic push to capture new growth opportunities [1][2][3] Group 1: Company Performance - Jitu's package volume in Southeast Asia reached 1.997 billion in Q3, a year-on-year increase of 78.7%, with an average daily package volume of 21.7 million [2] - JD Logistics has established three self-operated overseas warehouses in Malaysia and Vietnam and opened two international routes from China to Southeast Asia, enhancing its service capabilities [4] - Cainiao has upgraded its cross-border logistics product matrix, offering faster delivery times and lower shipping costs compared to industry standards [2] Group 2: Market Dynamics - The Southeast Asian express delivery market is projected to grow significantly, with a total package volume expected to reach 20.72 billion by 2025, reflecting a compound annual growth rate of 15.2% from 2025 to 2029 [6] - The region's population of nearly 700 million, with a high percentage of young consumers, shows a strong inclination towards online shopping, similar to China's e-commerce boom a decade ago [7] Group 3: Challenges - Chinese logistics companies face intense competition from local firms and the trend of e-commerce platforms building their own logistics systems, which reduces the market share for third-party logistics providers [8] - Localization challenges, including cultural differences and language barriers, as well as regulatory discrepancies across Southeast Asian countries, pose significant hurdles for Chinese logistics firms [8][9]

Summary of China Logistics Conference Call Industry Overview - The conference call focused on the **China logistics industry**, particularly the express delivery sector, highlighting the performance of key players in September 2025. Key Companies Discussed - **YTO Express (600233 CH)** - **STO Express (002468 CH)** - **Yunda Holding (002120 CH)** - **SF Holding (002352 CH)** - **J&T Express (1519 HK)** - **JD Logistics (2618 HK)** - **ZTO Express (Cayman)** Core Insights and Arguments - **ASP Recovery**: In September 2025, the Average Selling Price (ASP) for Tongda players showed recovery, with YTO, STO, and Yunda increasing their ASP by Rmb 6, 6, and 10 cents month-over-month, translating to year-over-year changes of +1.1%, +4.95%, and +0.5% respectively [1][1][1] - **Revenue Growth**: - YTO achieved a **14.9% year-over-year revenue growth** with a **13.6% parcel volume growth**. - STO also reported **14.9% year-over-year revenue growth** with a **9.5% parcel volume growth**. - Yunda underperformed with only **4.1% year-over-year revenue growth** and **3.6% parcel volume growth**. - SF's parcel volume grew by **31.8% year-over-year**, contributing to a **14.2% revenue growth** despite a sequential ASP recovery [1][1][1]. - **Market Positioning**: - YTO and STO are noted for balancing volume and price effectively, while Yunda is expected to continue losing market share. - SF's strong parcel volume growth indicates effective optimization strategies in its economy express segment [1][1][1]. - **Investment Recommendations**: - The current pecking order for e-commerce express players is: **J&T (Buy) > STO (Buy) > ZTO (Buy) > YTO (Neutral) > YUNDA (Sell)**. - For premium express players, the order is **SF (Buy) > JDL (Buy)** [1][1][1]. - **Future Outlook**: - Anticipation of further ASP recovery in the upcoming peak season for e-commerce, which could positively impact ZTO and J&T. - J&T Express is highlighted as a top pick due to its superior parcel volume growth in Southeast Asia and potential ASP recovery in China [1][1][1]. Additional Important Points - **Performance Metrics**: - Detailed metrics for September 2025 show YTO with **2,627 million parcels** (13.6% YoY), STO with **2,187 million parcels** (9.5% YoY), Yunda with **2,110 million parcels** (3.6% YoY), and SF with **1,504 million parcels** (31.8% YoY) [3][3][3]. - **ASP Trends**: - ASP for YTO was Rmb 2.21, for STO Rmb 2.12, for Yunda Rmb 2.02, and for SF Rmb 13.87, indicating significant differences in pricing strategies among the players [3][3][3]. - **Strategic Considerations**: - JDL's valuation is considered attractive with limited downside potential, although uncertainties exist regarding JD's strategies for food delivery and overseas expansion [1][1][1]. This summary encapsulates the key points from the conference call, providing insights into the performance and strategic positioning of major players in the China logistics industry.

Core Insights - Li Auto's founder and CEO Li Xiang topped Hong Kong's paid director ranking for 2024 with a total remuneration package of approximately HK$680 million (US$87.4 million) [1] - The ranking analyzed remuneration data for 1,000 directors across nearly all listed companies in Hong Kong [2] - 31 directors received annual compensation packages exceeding HK$100 million, with JS Global Lifestyle's chairman and CEO Wang Xuning ranking second at HK$520.51 million [3] Company Performance - Li Auto's stock performance declined by 35.7% last year, despite reporting a return on equity of 11.9% [4] - JS Global Lifestyle's stock price increased by 7.5% last year, but it reported a negative return on equity of 14.5% [4] - Liu Qiangdong, founder of JD.com, ranked fourth with total remuneration of HK$448.8 million [5] Remuneration Analysis - JS Global Lifestyle was the most generous company in terms of total compensation, paying HK$783.43 million to its directors [6] - New World Development was the top payer in cash payments, with HK$187.6 million in salaries and benefits [7] - Prada paid the most in fees, totaling HK$376.9 million to its directors [7]

Core Viewpoint - The fourth edition of "Green Point China" showcases significant advancements in sustainable practices, with 33 exemplary cases selected from 341 submissions, highlighting the new heights of commercial sustainability in China [1]. Group 1: Sustainable Practice Annual Cases - The 25 awarded "2025 Green Point China Sustainable Practice Annual Cases" include 8 cases each in green co-creation and green design, 4 in green logistics, 3 in green circulation, and 1 each in green traceability and green technology, reflecting diverse pathways in corporate green transformation [3]. - The awarded companies represent a mix of industry giants and innovative firms, with a notable increase in manufacturing companies, indicating a deeper integration of sustainability into core economic sectors [3]. Group 2: Green Bay Annual Cases - The Green Bay Annual Cases focus on upstream innovations in the supply chain, showcasing companies that, while less known to consumers, play crucial roles in materials innovation, energy storage, and environmental services, demonstrating the significant impact of upstream green innovations [13]. Group 3: Green Pioneer Cases - The three awarded companies in the Green Pioneer category exhibit exceptional leadership in green technology and development, providing transformative examples for the industry and embodying the exploratory spirit of the "Green Wild New Tracks" theme [17].

Summary of Key Points from the Conference Call Industry Overview - **Global Supply Chain**: The report highlights ongoing supply chain disruptions and the responses from corporates and policymakers to address these issues [1] Key Insights on China’s Export Performance - **Export Resilience**: China's total exports exceeded expectations in June, with shipments to the US finding a "tentative trough" and expected to remain resilient in the second half of 2025 [2] - **Support Factors**: Factors supporting Chinese exports include transshipment to the US, supply chain extension to ASEAN, new demand from emerging markets, and underappreciated competitiveness [2] - **Payback Effect**: The estimated payback effect on exports is around US$32.3 billion, or 0.9% of annual exports, which is considered meaningful but manageable [2] - **Future Outlook**: While trade volatility with the US and EU may increase in Q3 2025, overall resilience in Chinese exports is anticipated for H2 2025 [2] Brazil Railroads and Shipping Insights - **Truckers' Margins**: Data as of July 11 shows truckers' margins dropping by 0.4 percentage points week-over-week, but increasing by 4.3 percentage points over four weeks on average [7] - **Harvesting Progress**: As of early July, 57% of the planted area has been harvested, with corn farmer selling remaining slower than average, while soy is nearly 82% sold for the year [7] - **Logistics Demand Peak**: The moderation in truckers' margins may indicate that the peak logistics demand for corn has been reached, suggesting that future harvesting may not be as effective without increased farmer selling [7] Global Shipping Trends - **Capacity Growth**: A capacity growth of 16% year-over-year is expected in August, compared to 10% in July, indicating increased shipping capacity [14] - **Air Freight Rates**: Air freight rates showed a decline of 2.5% year-over-year in July, compared to a decline of 2.0% in June, reflecting pressure on shipping costs [14] J&T Express in China - **Government Intervention**: The State Post Bureau of China indicated potential government intervention to address "involutionary competition" in the express industry, which may ease pricing pressures for e-commerce parcel players [15] - **Earnings Visibility**: J&T Express, impacted by tough competition in the first half of 2025, may see improved earnings visibility in the second half of 2025 as its strategy balances market share and profitability [15] Additional Considerations - **Analyst Certification and Disclosures**: The report includes important disclosures regarding potential conflicts of interest and the objectivity of the research [4][5] - **Investment Ratings**: Citi Research's investment ratings distribution shows 58% of companies rated as Buy, 32% as Hold, and 9% as Sell, with a significant percentage of these companies being investment banking clients [23] This summary encapsulates the critical insights and data points from the conference call, providing a comprehensive overview of the discussed topics.

Investment Rating - The report maintains a "Buy" rating on ZTO Express (ZTO US, TP USD22.00) and STO Express (002468 CH, TP RMB14.10), while J&T Express (1519 HK, Hold, TP HKD9.00) is seen as having upside potential [6][10][49]. Core Insights - The express delivery sector in China is expected to benefit from new policy guidance aimed at preventing aggressive price competition, which has previously led to an 8% decline in average revenue per parcel (ARPP) despite a 20% increase in volume [2][10]. - Historical trends indicate that the sector has re-rated positively following government interventions to stabilize pricing, with a notable 48% rally in September 2021 after delivery fee increases [4][10]. - The current consensus has cut ZTO's earnings estimates by 15% due to intensified price competition, resulting in a forward PE multiple of 10.4x, significantly below its historical average of 19.2x, suggesting potential downside protection for the stock [3][10]. Summary by Sections Policy Impact - The State Post Bureau's recent conference emphasized tighter regulations to curb aggressive pricing strategies, which has already led to a 5-10% increase in share prices for express delivery companies [2][10]. - The report anticipates that if express delivery companies respond to the new policy with price hikes, a sustainable re-rating of the sector could occur [4]. Financial Projections - ZTO is projected to achieve 9% earnings growth by 2025, with a 21% increase in volume, despite an expected 11% decline in ARPP [5]. - A sensitivity analysis indicates that a 1 percentage point improvement in ARPP could lead to a 3 percentage point increase in net profit growth [5]. Company Ratings and Targets - ZTO Express is highlighted as the domestic leader with a target price of USD22.00, while STO Express is also rated as a "Buy" with a target price of RMB14.10, benefiting from potential regulatory interventions [6][10]. - J&T Express is rated as a "Hold" with a target price of HKD9.00, reflecting its position as a laggard in the market but with potential upside as competition eases [6][10].

Career Achievements - The speaker served as the Vice President of OPPO Philippines, promoting the "Selfie Expert" brand and helping OPPO become a leading mobile phone brand in the Philippine market [1] - The speaker served as the General Manager of J&T Express in Saudi Arabia and Vice President of the Middle East, leading the rapid implementation of the business and building a local team of over 3,000 people [1] - The speaker was invited as a logistics advisor for the China-Saudi Arabia Investment Conference and a speaker at the logistics sub-forum [1] - The speaker was the sole representative of a Chinese enterprise at the official dinner of the Asia Logistics Biennale in Saudi Arabia [1] International Business Development - The speaker built a government and resource liaison system for Chinese enterprises to "go global in Saudi Arabia", providing practical solutions for Chinese-funded enterprises [1] - The speaker planned a cultural exchange salon between China and Saudi Arabia, establishing a community of women in both countries, and promoting dialogue between art and the community [1] Personal Development & Motivation - The speaker shared insights and methodologies to encourage more women to break through prejudice and traditional fixed thinking, and bravely pursue their dreams [1] - The speaker's journey from the countryside to the world stage serves as an example of achieving a life turnaround [1]

Investment Rating - The report does not explicitly state an investment rating for the industry or specific companies [1]. Core Insights - The report highlights a tentative US-China détente following a call between Trump and Xi, with discussions on trade and potential sanctions [1]. - The HSCEI index increased by 2.5% and the CSI 300 by 0.9% during the week [1]. - China is considering a RMB500 billion investment to accelerate infrastructure projects in AI, digital economy, and consumption [1]. - The report notes that the IT, Communication Services, and Broadline Retail sectors outperformed, while Industrials, Consumer Staples, and Energy sectors underperformed [1]. Key Themes Update - The report identifies key themes in the China market, focusing on index-heavy stocks with high dividend yields and local champions expanding globally [12]. - High yield stocks listed include CCB, ICBC, and PetroChina, with dividend yields ranging from 5.1% to 7.1% [12]. - Local champions going global include companies like BYD and Great Wall Motor, which are less impacted by US/EU tariffs [12]. Market Movements and Capital Flows - The report indicates that the A-share market saw a 22.9% year-over-year increase in new account openings in May [3]. - Preliminary data shows that May passenger vehicle wholesales increased by 14% year-over-year, with NEV sales up by 38% [3]. Earnings Revisions - The report does not provide specific details on earnings revisions for the industry or companies [1]. Recovery Trends - The report notes that the top 100 developers' home sales decreased by 8.6% year-over-year in May [3]. - Average new home prices in 100 cities increased by 0.3% month-over-month in May, while secondary home prices decreased by 0.7% [3]. Key Events - The report mentions that the US made tough requests to Vietnam in trade talks, including reducing reliance on Chinese industrial goods [2]. - The PBOC is set to inject RMB1 trillion via outright reverse repos in June [2]. Key News - The report highlights that the EU voted to limit China's access to its medical device procurement [1]. - China is reportedly considering a major deal to order hundreds of Airbus jets during EU leaders' visit [1].