Investment Rating - The industry investment rating is "Positive" (maintained) [1] Core Views - The report highlights the rapid growth of instant retail, with daily order volumes for Taobao Flash Sale and Meituan Flash Sale reaching new highs, indicating a competitive landscape among major platforms [5][25] - The report emphasizes the shift in the instant retail industry from speed competition to comprehensive strength competition, driven by significant investments from major e-commerce platforms [26] - The report suggests focusing on high-quality companies in high-growth sectors driven by emotional consumption themes [8][29] Summary by Sections Retail Market Review - The retail industry index rose by 2.20% during the week of July 7 to July 11, outperforming the Shanghai Composite Index by 1.11 percentage points [7][14] - The internet e-commerce sector showed the largest increase among retail sub-sectors, with a weekly rise of 4.37% [17][20] Retail Insights: Instant Retail Competition - Taobao Flash Sale and Meituan Flash Sale reported daily order volumes exceeding 80 million and 150 million, respectively, contributing significantly to market growth [5][25] - Major platforms are implementing substantial subsidy programs to support merchant transformations, indicating a trend towards a three-way competitive landscape [26] Focus on High-Growth Quality Companies - Investment themes include: - **Gold and Jewelry**: Focus on brands with differentiated product offerings, recommending companies like Laopuhuangjin and Chaohongji [8][29] - **Offline Retail**: Emphasizing companies that adapt to trends, with recommendations for Yonghui Supermarket and Aiyingshi [8][29] - **Cosmetics**: Highlighting domestic brands with strong differentiation, recommending brands like Maogeping and Pola [8][29] - **Medical Aesthetics**: Focusing on companies with differentiated product lines, recommending Aimeike and Kedi-B [8][29] Company-Specific Insights - **Zhou Dafu**: FY2025 revenue of 89.66 billion HKD (-17.5%), net profit of 5.916 billion HKD (-9.0%), focusing on product structure optimization [31][36] - **Laopuhuangjin**: FY2024 revenue of 8.506 billion CNY (+167.5%), net profit of 1.473 billion CNY (+253.9%), benefiting from brand expansion [31][36] - **Chaohongji**: 2025Q1 revenue of 2.252 billion CNY (+25.4%), net profit of 189 million CNY (+44.4%), driven by differentiated product offerings [31][39] - **Mao Ge Ping**: FY2024 revenue of 3.885 billion CNY (+34.6%), net profit of 881 million CNY (+33.0%), focusing on high-end cosmetics [31][39] - **Polaya**: FY2024 revenue of 10.778 billion CNY (+21.0%), net profit of 1.552 billion CNY (+30.0%), maintaining a strong position in the domestic market [31][39]

Investment Rating - The report maintains a "Buy" rating for JD [1][13][25] Core Views - JD's core retail business continues to show growth, with a strong focus on food delivery to synergize with its main operations [6][13] - The company is expected to achieve a revenue of RMB 335.7 billion in FY2Q25, representing a 15.2% year-over-year increase, with an adjusted net profit forecast of RMB 4.32 billion [7][8] - JD is expanding its overseas business in Europe, launching the Joybuy brand in London and enhancing its logistics capabilities [12][13] Financial Data and Profit Forecast - Revenue projections for JD are as follows: - 2023: RMB 1,084,662 million - 2024: RMB 1,158,819 million - 2025E: RMB 1,309,433 million (13.0% YoY growth) - 2026E: RMB 1,420,217 million (8.5% YoY growth) - 2027E: RMB 1,493,471 million (5.2% YoY growth) [5][16] - Non-GAAP net profit estimates: - 2025E: RMB 23,538 million - 2026E: RMB 42,638 million - 2027E: RMB 55,403 million [5][16] - The report anticipates JD's retail revenue to grow 14.7% YoY to RMB 294.9 billion in FY2Q25 [8][9] Business Expansion and Strategy - JD's food delivery service has seen a peak of over 25 million daily orders, with a focus on high-frequency consumption scenarios [9][11] - The company is investing in on-demand retail and exploring new business areas such as travel and hospitality [11][13] - JD's market share in the premium food delivery segment is 45%, indicating strong competitive positioning [9][12]

Investment Rating - The report maintains a "Buy" rating for Alibaba (BABA) [2][12][24] Core Insights - The company is increasing investments in flash sales and instant retail, with AI driving cloud intelligence growth [1][12] - Short-term EBITA pressure is expected for Taotian due to increased investments, but this will help cultivate consumer awareness and activate local consumption [8][12] - Strong growth in cloud revenue is anticipated, driven by rising domestic AI demand and enhanced model capabilities [9][10][12] - The international business is expected to maintain healthy growth while balancing investment efficiency to improve profitability [11][12] Financial Data and Earnings Forecast - For FY26E, the revenue forecast is Rmb1,067.8 billion, with a YoY growth rate of 7.2% [15] - Non-GAAP net profit for FY26E is projected at Rmb137.2 billion, reflecting a decline of 13.4% YoY [15] - The adjusted EPS for FY26E is expected to be Rmb56.82 [15] - The target price is set at $138 per share, indicating a 33% upside potential [12][15]

Market Overview - The A-share market saw a collective rise in the morning, followed by a slight decline in the afternoon, with the Shanghai Composite Index down 0.13% and the Shenzhen Component Index down 0.06%, while the ChiNext Index rose by 0.16% [1][2] Sector Performance - The financial sector led the gains, with multiple bank stocks reaching new highs; notable performers included Industrial and Commercial Bank of China [4] - Other sectors that performed well included childcare services, short drama games, and internet e-commerce, while new urbanization concepts and real estate stocks became active in the afternoon [4] - Conversely, sectors such as insurance, non-ferrous metals, organic silicon, and semiconductor chips experienced declines [4] Stock Highlights - Specific stocks that saw significant movement included: - Bank of China up 1.23% to 5.78 - Ping An Bank up 1.18% to 12.84 - Industrial and Commercial Bank of China up 1.16% to 7.85 [5] Capital Flow - Main capital flows indicated a net inflow into cultural media and traditional Chinese medicine sectors, while real estate and medical device sectors saw net outflows [6] - Notable individual stocks with net inflows included Kuaibao Tong and Kangmei Pharmaceutical, while Zhongyou Capital and Dongfang Wealth faced significant sell-offs [6] Institutional Insights - Jifeng Investment noted that the Shanghai Composite Index has broken through the B-wave peak, suggesting a challenge to the resistance level of 3674 points in the future [7] - Galaxy Securities indicated that after reaching 3550, the index may pull back to confirm the daily trend, while Dongfang Securities highlighted a return of global funds to the domestic market, driving index recovery [8]

Market Performance - The A-share market showed mixed results with the Shanghai Composite Index up by 0.02%, while the Shenzhen Component and ChiNext Index fell by 0.7% and 1.21% respectively, with over 3200 stocks rising overall [1][3] Sector Performance - The shipbuilding, electric power, real estate, and internet e-commerce sectors performed strongly, while the biopharmaceuticals, weight loss drugs, and AI mobile phone sectors saw significant declines [1][3] Notable Stocks - Real estate stocks surged, with companies like Yucheng Development, Shahe Shares, and Nanshan Holdings hitting the daily limit, while others like Haitai Development and JinDi Group also saw gains [3] - Electric power stocks experienced a notable rally, with nearly 10 stocks including Shaoneng Shares and Huayin Electric reaching the daily limit [3] Stock Price Movements - Significant stock price increases included: - Disen Shares (+18.56% to 7.09) - Nanguang Technology (+14.72% to 35.46) - Shaoneng Shares (+10.07% to 6.12) - Huayin Electric (+10.02% to 6.70) - Shimao Energy (+10.01% to 21.00) [4] Capital Flow - Main capital inflows were observed in the real estate and banking sectors, while education and engineering machinery sectors experienced net outflows [5] - Individual stocks with notable net inflows included Qingdao Kingking, Tianyu Digital Science, and Hailian Jinhui, attracting 642 million, 611 million, and 514 million respectively [6] - Stocks facing significant net outflows included Zhongji Xuchuang, Xinyi Sheng, and Dongfang Caifu, with outflows of 692 million, 496 million, and 378 million respectively [7] Institutional Insights - Citic Securities highlighted the mid-year reporting period as a critical window for identifying structural opportunities, emphasizing the importance of performance-driven investments in sectors like solid-state batteries, copper, aluminum, and pharmaceuticals [8] - Guo Cheng Investment noted that small-cap stocks are under pressure due to new regulations on algorithmic trading, which may lead to decreased liquidity in this segment [8] - Zhongxin Jian Investment pointed out that the Shanghai Composite Index reached a new high since 2025, driven by improvements in macroeconomic conditions, market sentiment, and positive mid-year earnings forecasts [8]

Investment Rating - The investment rating for Alibaba-SW (09988.HK) is "Buy" (maintained) [1] Core Views - Short-term increased investment in flash sales may pressure profits, but long-term ecosystem synergy is promising [1] - The company is expected to enhance its cloud business growth through active investment in AI infrastructure, which may offset some capital expenditure impacts [1] - The forecast for adjusted net profit for FY2026 and FY2027 has been revised down to 163.1 billion and 182.8 billion respectively, with a new FY2028 forecast of 202.8 billion, corresponding to year-on-year growth rates of 3.2%, 12.1%, and 10.9% [1][4] Financial Summary and Valuation Metrics - FY2024A revenue is 941.168 billion, with a year-on-year growth of 8.3% - FY2025A revenue is projected at 996.347 billion, with a year-on-year growth of 5.9% - FY2026E revenue is expected to reach 1,102.080 billion, with a year-on-year growth of 10.6% - Non-GAAP net profit for FY2024A is 157.479 billion, with a year-on-year growth of 11.4% - Non-GAAP net profit for FY2025A is projected at 158.122 billion, with a year-on-year growth of 0.4% - The diluted EPS for FY2026E is expected to be 8.8, corresponding to a P/E ratio of 11.0 [8]

Investment Rating - The report assigns an "Outperform" rating to the company for the first time, with a target price range of 49-59 CNY per share [4][3]. Core Viewpoints - The company is a leading full-chain B2B foreign trade service provider, benefiting from the increasing demand for overseas expansion among enterprises, which leads to a continuous influx of customers [3][2]. - The company has launched AI tools that enhance operational efficiency and contribute to revenue growth, with significant revenue increases from AI applications [3][21]. - The overall revenue for 2024 is projected to be 1.668 billion CNY, representing a year-on-year growth of 9.31%, while the net profit is expected to reach 451 million CNY, up 19.09% year-on-year [1][3]. Summary by Sections Company Overview - The company, established in 1996, primarily operates the "Made-in-China.com" platform, providing comprehensive B2B foreign trade services [11][13]. - The company has introduced AI applications to enhance its service offerings, with the AI tool "Mai Ke" contributing significantly to revenue [11][21]. Financial Analysis - The company has shown a steady increase in revenue and net profit over the past three years, with a compound annual growth rate (CAGR) of 22.55% for net profit [1][16]. - The gross margin for 2024 is projected at 80.29%, reflecting a year-on-year increase, while operating cash flow is expected to continue its upward trend [23][26]. Industry Overview - The cross-border B2B e-commerce market is expected to grow at a compound annual growth rate (CAGR) of 21.8% from 2018 to 2022, reaching a market size of 6.1 trillion CNY by 2024 [2][36]. - The increasing number of enterprises engaging in overseas business is creating significant growth opportunities for platforms like the company's [60][36]. Competitive Landscape - The company ranks second in the industry, following Alibaba's international station, with over 20 million registered buyers on its platform [52][50]. - The competitive advantage is further strengthened by the company's early adoption of AI technologies, which enhance service efficiency and customer retention [3][47].

Core Viewpoint - Douyin's e-commerce strategy has shifted significantly, focusing on quality and service rather than just data metrics, leading to a notable increase in GMV during the 618 shopping festival [3][10][14]. Group 1: Douyin's E-commerce Performance - During the 618 event, Douyin set a GMV target of 400 billion, ultimately achieving over 440 billion, a 32% year-on-year increase [3][10]. - Over 60,000 brands saw their transaction volumes double, with 236 brands achieving over 100 million in sales through live streaming [8][10]. - The overall GMV for Douyin's e-commerce in 2024 is projected to reach approximately 3.43 trillion, a 35% increase from 2023 [10]. Group 2: Strategic Shifts and Trends - Douyin has transitioned from a focus on live streaming to integrating shelf-based e-commerce, with shelf sales accounting for 45% of total purchases during the 618 event, growing over 70% year-on-year [11][13]. - The platform has implemented a 37-day promotional period for the 618 event, allowing for better inventory management and brand communication [7][11]. - Douyin's e-commerce strategy now emphasizes brand partnerships and personalized marketing, moving away from a generalized approach [8][22]. Group 3: Supportive Policies and Market Dynamics - Douyin has introduced various merchant support policies, saving businesses over 11 billion in operational costs by May 2025 [17]. - The platform capitalized on national subsidy policies, with over 30,000 live sessions promoting subsidized products during the 618 event [14][15]. - Douyin's marketing budget for brands has increased, with a significant shift towards the platform for advertising, particularly in the beauty sector [18][35]. Group 4: E-commerce Ecosystem Development - The rise of "red person store broadcasting" has become a new trend, with over 20 red person stores achieving over 100 million in sales during the 618 event [33]. - The integration of live streaming and shelf-based sales is becoming a key feature of Douyin's e-commerce model, with a notable increase in the proportion of store broadcasts [34][36]. - Douyin's e-commerce ecosystem is evolving to provide a more diverse shopping experience, enhancing user engagement and loyalty [37].

Summary of Conference Call Records Industry Overview - The conference call discusses the **Chinese e-commerce market** and its growth trends for the first half of 2025, indicating an overall growth but no significant upward turning point observed [1][4] - The **cross-border e-commerce** market is highlighted, noting its stability in demand but challenges due to stricter trade policies [3][8] Key Insights and Arguments E-commerce Market Trends - **Home appliances and 3C categories** benefit from national subsidy policies, showing high growth rates [1][4] - **Food and beverage, cosmetics, and maternal and infant products** show signs of recovery in growth rates, while **textiles, clothing, and home improvement** categories remain less favorable [1][4] - The **average price** of optional categories like jewelry and textiles is rising, indicating potential for price increases in new consumption categories [4] Instant Retail and E-commerce Promotions - The evolution of **e-commerce promotions** is crucial, with a noted decrease in siphoning effects but still higher growth rates compared to regular periods, benefiting shelf-based e-commerce [5] - The **instant retail market** is projected to exceed 1 trillion yuan by 2025, with significant room for growth in online convenience store rates [5] Competitive Landscape - **JD.com**'s entry into the food delivery market expands overall market size, but **Meituan** is expected to maintain its leading position due to its advantages in user base and fulfillment [5][6] - Meituan's **flash purchase business** is rapidly growing, with plans to reach 100,000 flash warehouses by 2027 [1][5] International Expansion - Meituan's successful overseas expansion, particularly in **Saudi Arabia and Hong Kong**, is noted, with plans to enter the **Brazilian market**, potentially contributing significant profit increments [6] Consumer Market Characteristics - The current **Chinese consumer market** is characterized by oversupply and insufficient demand, with new growth opportunities emerging in instant retail and new product demands [2][9] - The **restaurant industry** is recovering, with an increase in chain rates and consumer spending expectations [2][9] Additional Important Insights - The **gold and jewelry sector** is expected to benefit from wedding demand recovery and self-consumption trends, with rising average prices in e-commerce channels [2][10][11] - The **tea beverage industry** is highlighted as a growing sector, with competition in different price segments and notable companies like **Nai Xue's Tea** and **Mi Xue Bing Cheng** [10] - The **supermarket industry** is undergoing changes, with new retail models emerging, such as membership warehouse stores and discount supermarkets, indicating a shift in consumer preferences [9][12] Recommendations - Companies like **Lao Pu Gold** and **Chao Hong Ji** are recommended for their potential to benefit from rising gold prices and expansion strategies [11]

Core Views - The past year has been a pivotal one for Alibaba, marked by significant reforms led by executives Cai Chongxin and Wu Yongming, focusing on strategic clarity and business focus [2][3] - Alibaba's 2025 fiscal year was characterized by solid progress under the "user-first, AI-driven" strategy, with notable growth in core businesses [3][4] Group 1: Financial Performance - Alibaba reported a total revenue of 996.347 billion RMB for the fiscal year, with a net profit increase of 77% to 125.976 billion RMB, marking a four-year high [4] - E-commerce revenue grew by 3%, CMR increased by 6%, and international e-commerce revenue surged by 29% [4] - Cloud revenue achieved double-digit growth, leading the AI technology wave since the beginning of the year [4] Group 2: Strategic Focus - The company is concentrating on two core businesses: e-commerce and "AI + Cloud," which are seen as the engines for long-term growth [4][7] - Alibaba's mission remains unchanged: to make it easier for businesses to operate, with an updated emphasis on AI to support small enterprises [5][6] Group 3: Market Position - Alibaba is the world's largest e-commerce platform with an annual GMV of approximately 8 trillion RMB, while Amazon ranks second with around 500 billion USD (approximately 5 trillion RMB) [13] - In cloud services, Alibaba ranks fourth globally and first in the Asia-Pacific region, following Amazon, Microsoft, and Google [13] Group 4: Investment and Growth - The company plans to invest over 380 billion RMB in cloud and AI infrastructure over the next three years, with a capital expenditure of 86 billion RMB in the past year, a 168% increase year-on-year [20] - As of March 2025, Alibaba had signed but unrecognized capital expenditures amounting to 45.3 billion RMB, a 146% increase [20] Group 5: Organizational Changes - The partner team has been reduced to 17 members, focusing on a more streamlined and effective leadership structure [22][23] - The total number of full-time employees decreased significantly to 124,320 by March 2025, following the divestment of non-core businesses [25] Group 6: Shareholder Returns - Alibaba's cash reserves stood at 374.3 billion RMB, with a net cash position of 143.6 billion RMB after accounting for interest-bearing liabilities [27] - The company returned 117 billion RMB to shareholders through dividends and stock buybacks, reducing the total share count by 5.1% [27]