sandalwood

According to China Auto Insurance data, BYD delivered 216,090 vehicles from Oct 1 to 20. Based on this data, we anticipate the total retail deliveries for Oct to be 400,000-433,000 units, further increasing and hitting a new record high.In Oct MTD, BYD accounted for ~19% of the overall passenger car market, slightly improving from Sep and reinforcing its leading position.

In Jul-24, our China Payment Cohort Data captured monthly transacting users both slowed down from the prior quarter, especially the latter with a sharp slowdown from 2Q24’s +59% to +17% y/y. As of Jul-24, our captured Luckin Coffee number of offline stores continuously slowed down to +71% y/y from Jun-24’s +76% y/y and 2Q24’s +84% y/y. It is likely a deliberate move to counter the negative effects from the previous rapid store expansion which led to a lowered average store operating effiency (source).

 SAIA’s LTL tons at +7% y/y in 3Q24, maintained stable from 2Q24.

 SAIA’s LTL Shipment Volume at +9% y/y in 3Q24, a slowed down from 2Q24.

US & Global: Amazon vs. Temu vs. Tiktok Shop
In Jul, thanks to Prime Day promotion, Amazon shows a strong m/m increase; Temu GMV further ramps up driven by fast growing semi-managed business.
In Jul, Temu's high-end price band (>50 USD) value mix increases noticeably likely due to a ramping-up in local warehouse GMV. Amazon >100 USD value mix increase due to higher mix in consumer electronics and home appliance during promotion.

Huazhou's Total Turnover (Legacy-Huazhu) is estimated to normalize to +23% y/y in 2Q24 vs. 1Q24’s estimation of +29% y/y on tough comps.

The company’s turnover value surged in early May, mainly driven by the strong travel demand during the May Day holiday, particularly in Tier 2 and Tier 3 & below cities, and partly benefiting from the holiday timing difference.

Sandalwood estimates Xiaomi Total Revenue y/y to accelerate in 2Q24 vs. 1Q24, above consensus.

China Revenue y/y and Cellphone revenue y/y are expected to stay strong in 2Q24. both above consensus, thanks to strong Mi 14 and Mi 13 sales during 6.18, and EV deliveries.

China Auto Insurance data indicates that Xiaomi has delivered 27,183 vehicles in 2Q24.

Xiaomi announced the start of operations at its new self-owned smartphone smart factory in Beijing, with an annual production capacity of 10 million smartphones.

Lululemon (LULU US Equity) reported F1Q24 PRC Rev(USD) +39% y/y, slowed down but remained healthy growth from last quarter’s +74% y/y, above but directionally in line with our projection range of + 22-27% y/y, at the high end of consensus. 

 The proportion of sales revenue generated in China to the company's global sales has increased from 12% in F1Q23 to 16% in F1Q24.

Sandalwood offline + online data consistently captures 50-60% of Lululemon's reported China total revenue.

Positive: Proya, Giant Biogene, Freda, Marubi, Anta, Fila, Lululemon, Asics, Amer Sports, 361 Degrees, Huawei, Xiaomi, Vivo, Sony, Canon, Midea, Roborock

Negative: Kose, Amore, Botanee, Bloomage, Puma, Nike, Apple, Oppo, Xgimi, Gree, Haier, Hisense Visual Technology, Ecovacs

Beike existing home sales volume remains above prior year's level in Apr

Huazhu y/y rebounds strongly during May Day holiday

Moncler/Canada Goose/Prada outperform luxury peers

Overall sportswear sector maintains strength, led by Fila/Xtep/361 Degrees/AS/Asics/On/Mizuno

In Mar-24, Amazon continues to lose shares to both Temu and Tiktok shop globally and US only. The strong Mar-24 sales in Temu and Tiktok shop are helped by Spring sales promotion.

In the low price band (<10 USD),  Amazon has lost significant shares to Temu and Tiktok Shop. Epsecially in Mar-24, Amazon market shares drop to below 50%. In the higher price band (10 -50 USD), Temu and Tiktok shop  are also penetrating aggressively.

Sunrise and CDF Hainan platforms deteriorated to -55% y/y in F3Q24(ending Mar-24)  from -52% y/y in the last quarter.

Live streaming platforms accelerated in F3Q24(ending Mar 24), partially offset Tmall/JD weakness.

Sandalwood estimates Lululemon’s Ex-NA Rev in F4Q23 (ending Jan-24) to accelerate to +55-60% y/y (USD), at high-end of consensus, mainly driven by strong growth in People’s Republic of China (PRC). The strength is driven by 1) successful marketing strategy and 11.11 promotion, 2) booming outdoor/sports activities in China, and 3) rapid store expansion. Sandalwood data shows Lululemon is not only doing well in its core yoga-related products, but also in other product lines such as sports jackets and trousers.

In Oct-23, Sandalwood captured existing-home GTV (RMB) and sales volume grew at +12% y/y and +28% y/y respectively, remaining resilient compared to last quarter’s +11% y/y and +14% y/y respectively; we estimated the GTV and total number of second-hand properties closed would further improve to +23% y/y and +39% y/y in Nov from Oct’s +12% y/y and +28% y/y.Existing home visit numbers remained healthy in Nov-23 at +59% y/y; Shenzhen weekly visits witnessed an uptick in the last week of Nov thanks to the lowered down payment to 40% for the second-purchased home starting from Nov 23rd 

Positive: Travel sector, Japan tourism, Isetan, H2O Retailing, J Front Retailing, Ctrip, Tongcheng Elong, Moncler

1. On y/y basis, Retail/Restaurant remain largely seasonal in Aug MTD vs. Jul, while Auto becomes less negative, although still ample room for recovery. Housing (new home sales) continues to be the most negative, but likely close to the bottom as more support measures roll out in early Sep. 

2. Chinese luxury spending continues to be healthy based on daily trend, mainly supported by Hong Kong, Macau, Japan, and other regions in APAC. Moncler outperforms the most.

Sandalwood estimates Nike Brand Greater China Revenue Y/Y (USD) to accelerate in F4Q23 (ending May-23), driven by 1) strong online sales performance during the 6.18 promotion pre-sales period, 2) increased outdoor activities, and 3) easy comps from the lockdown last year.

Fresh Made Beverage sector is expected to continue its growth trends in the next 5 years; the chain rate is expected to further increase. Chain brands are willing to expand in lower city tiers.

In Jun-23, most coffee names' sales value y/y slightly slowed down on normalizing comps; looking at y/2y, Starbucks become slightly less negative yet still remained stagnant.

Luckin Coffee y/y slightly slowed down in Jun-23 mainly due to the lowered ticket size as Luckin started another round of coupon give-away to celebrate the opening of 10,000th stores (source); volume y/y accelerated to +62% y/y from May-23's +54% y/y.

Though the y/y strength of new home sales in 1Q23 is partly attributable to the one-time release of the pent-up demand accumulated during the pandemic, we do notice Beike new home sales outperformed the overall market’s growth rate of ~20% y/y. It might indicate that Beike will be taking more shares in 1Q23. Therefore, we have a positive view on Beike.

Yanker Shop is the major market share gainer in Deli food (Subsector under Snacks) in 1Q23. The brand also continuously outperformed its sector since Jan 2022.

In 2022, the deliveries of the overall car sector grew -3% y/y, facing challenges from Covid restrictions, despite benefiting greatly from stimulus policies in 2H, especially the halved purchase tax for small-engine cars.

Compared to the previous generation after 3 weeks since launch, iPhone 14 standard model underperforms, iPhone 14 Pro/Pro Max perform decently, while Apple Watch 8 outperforms.

Our data suggest Gucci continues to underperform peers, likely due to 1) several negative social media coverages earlier this year, 2) brand positioning as “trendy pieces” vs. peers’ “timeless pieces”

1、Hermes continues to outgrow peers; Domestic jewelers, especially Chow Tai Fook, further accelerate in Jul

2、Express shipment remains healthy led by J&T/STO/JDL in Jul

3、Lululemon soars on JD store opening and resilient Tmall; Xtep outperforms; Nike retains recovered-level in Jul