Category: personal_noteS

Back to 2021-2022, Meituan’s quarterly results experienced various changes in reported metrics, which looks a bit dubious and problematic – whether it’s due to conflicts when measuring performance internally and to investors, or gov’s implicit requirement, or regulation changes.

Here are the 4 changes:

1/ Food delivery revenue split (2021q4): “Commission” split into “Commission” and “Food delivery services”, not segment changes.

2021q3

2021q4

2/ no more “GTV of food delivery” and “number of domestic hotel room nights” (2022q1)

2021q4

2022q1

3/ big change in 2022q2: new segment reporting of “Core local
commerce”, which combines previous “Food delivery”, “In-store, hotel & travel” & some business previously in “New initiatives and others”, e.g. Meituan Instashopping (美團閃購)

2022q1

2022q2

This segment reporting is used as of today.

Plus, in operating metrics, “Number of food delivery transactions” is now “Number of On-demand Delivery transactions”.

2022q1

2022q2

This is interesting – according to the footnote, “Number of On-demand Delivery transactions” includes number of transactions from food delivery and Meituan Instashopping businesses. While it’s consistent with “Core local commerce” definition, it’s hard to argue why business like Meituan Grocery (美團買
菜), which is under “New initiatives and others”, is not on-demand delivery transaction.

Plus, since “Core local commerce” now includes in-store, hotels etc., which has nothing to do with “delivery”, it’s hard to know the unit economics for delivery.

4/ No more reporting of “Number of Transacting Users”, “Number of Active Merchants” and transaction per user (2023q1)

2022q4

Gone in 2023q1

Biotech

Nov – Modern Shanghai plant break ground; the $1bn deal was signed in July

Oct – Junshi’s PD-1 drug, with US & Canada right purchased by partner Coherus was approved by FDA

Agricultural purchases

Oct – signed 11 purchasing agreements/contracts, worth multiple billions in value

Nov – 600k ton soybeans; and then 3mn+ tons; a good summary here

Cargill Inc., the world’s biggest #crop trader, said #China just made an enormous purchase of US #soybeans (more than 3 million metric tons) that underscores bullish momentum in the global #oilseed #market.https://t.co/dOa0sFaAAT

— farmdoc daily (@farmdocDaily) November 11, 2023

Industrial / Areospace

Nov –  GE Aerospace’s 25 GEnx-1B engines order from China Eastern Airlines to power its Boeing 787 fleet.

Nov – Xiamen Airlines purchases.

Market is speculating more Boeing orders.

Consumer internet / tech

Nov – Meta’s Oculus is coming to China in late 2024 (w/ a lower-end version of Quest 3), with Tencent as partner; WSJ reported the talk between Meta and Tencent back in Feb 2023.

Nov – Nvidia to release 3 new chips for China market (H20, L20 and L2), available as soon as the end of this year.

You can get 20% return on stocks per year if you are as good as Buffet.

But books and reading have a much higher return!

The cost of a book is basically cost-plus, including those paid to the author. It’s relatively small sum of money – likely less than a meal.

The price is similar for every one. It’s up to each reader to capture all the upside to him/herself. No price discrimination.

The paper and the printing are basically similar across books – different words on a single page don’t mean they cost differently. Therefore, an amazing book costs the same as any other books (well, royalties, length, quality of paper may differ, but you know what I mean).

Put it another way, a good reader can get higher value from reading books, without increasing costs, if he/she can pick “high value” books (for him/herself).

It’s like Nvidia pays similar prices as others for the same wafer to TSMC, but gets higher value/return from it.

Besides money, readers are also investing their time. So, the return of reading a book could be even higher if he/she can read more efficiently, reducing time spent while still get most of the stuff.

It’s like fitting a few more chips onto one wafer.

What’s more impressive? TSMC has a high market share and some bargain power, but printing books seem to be very fragmented and has very good availability.

Enjoy reading great books! That’s likely a higher return investment than Nvidia selling chips.

 

 

Sources

• 年初融美元债$700mn，12+% yield
  • 2025 $400mn @11%
  • 2026 $300mn @11%
• 境内中期票据 15 亿 rmb，6.8%
• 卖万达电影股权，两笔共40多亿rmb，
  • 一笔中国儒意（背后腾讯出钱）
  • 一笔是东方财富的老婆
• 卖5座万达广场股权；price? to 大家保险 etc
• 发行ABS; didn’t work
• Net income ~$1bn in 23H1

Uses

• 还40亿 rmb 票据
• 还$400mn Jul 2023美元债@6.875%
• Sep 回购 5.58% 38亿puttable境内债 20万达01

Upcoming: Jan 2024 $600mn 7.25% note

Potential: didn’t IPO -> to repurchase 30bn rmb

BYD started to report overseas sales in July 2022.

So we have the first YoY quarterly number: over 300% yoy growth! (over 4x)

Overseas volume as % of total volume grew from 3% in 2022q3 to 8.6% in 2023q3 – still looks to be a low number.

UBS claimed that BYD has “a sustainable ~25% cost advantage for BYD over legacy competitors”. (Sep 2023)

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A few days after UBS report, EU launched investigation into Chinese EV subsidies.

Meanwhile, as Bernstein and WSJ pointed out, not all of those come from Chinese automakers; Tesla, and other European JVs in China exported a ton. Bernstein’s number says Tesla’s export from China to EU is 10x BYD’s.

BMW’s China JV reported that it exported 16,595 units, mainly X3 BEV models, to overseas in the first half of 2023 (didn’t say where, but Bernstein puts BMW China JV EU export number higher than BYD’s EU export).

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Unlike French peers, German carmakers still sell a lot of ICE cars in China, and exported EV from China JVs. So Scholz is taking a different view vs. Macron. That’s just one of the issues the two need to reconcile/solve – the other two issues are energy bills and defense, laid out by Politico.

2023 Oct golden week has 8 days (Sep 29 – Oct 6). Mainland visitors arrivals totaled at 709,079.

This number is 4.5x 2022, which was impacted by covid.

When comparing with pre-covid, 2023 is 10% higher than 2017, 3% lower than 2018, and 11% lower than 2019.

Looks okay; no signs of pent-up demand; consistent with other 2023 recovery data.

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2027-2022 Oct golden week

just calculating coffee beans here.

1 grande Starbucks americano (ice/hot), typically $3-4 globally now, comes with 3 shots. (Tall has 2 shots)

1 shot = 7 grams of coffee beans

1 grande americano has 21 grams of coffee beans

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just bought some beans (illy, Arabica, Etiopia). Price may wary, but for 250g it’s  ~$10-15

250g can make 10-12 serves of previously calculated grande americano

each serve (grande americano) costs ~$1 of coffee beans

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using larger bags of cheaper beans, e.g. $55.5 for 2260g (see below), each serve of grande americano uses ~$0.5 coffee beans

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Again, lots of stuff come into play: convenience, time, other ingredients, logo, etc.

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Starbucks item prices: https://www.fastfoodprice.com/menu/starbucks-prices/ (Grande americano is $3.45)

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Tall latte price globally