BN – shiqiv.com

Model pricing comparison

Meta’s pricing is amazing – it targets eliminate Claude’s gross profit if Muse Spark capability can catch up.

Model	Input ($/1M tokens)	Output ($/1M tokens)
Meta Muse Spark 1.1	$1.25	$4.25
Claude Sonnet	~$3	~$15
Claude Opus	~$5	~$25

With cached input.

Model	Input ($/1M)	Cached Input ($/1M)	Output ($/1M)	Cached discount
Meta Muse Spark 1.1	$1.25	$0.15	$4.25	88%
Claude Sonnet	$3.00	$0.30	$15.00	90%
Claude Opus	$5.00	$0.50	$25.00	90%

However, compare that with DeepSeek.

Model	Input / 1M	Cached input / 1M	Output / 1M
DeepSeek V4 Flash	RMB 1 / $0.15	RMB 0.02 / $0.003	RMB 2 / $0.3
DeepSeek V4 Pro	RMB 3 / $0.44	RMB 0.025 / $0.0037	RMB 6 / $0.89

Zhipu could see some trouble…

Model	Input / 1M	Cached input / 1M	Output / 1M
Zhipu GLM-5.2	RMB 8 / $1.18	RMB 2 / $0.3	RMB 28 / $4.13
Meta Muse Spark 1.1	$1.25	$0.15	$4.25
DeepSeek V4 Pro	RMB 3	RMB 0.025	RMB 6

Solar, Baijiu, and Banks

From 2021 to today,

Solar in aggregate went from 3 trillion rmb to 2 trillion rmb;

Baijiu in aggregate went from 5.4 trillion rmb to 2.4 trillion rmb.

These two sectors along lost 4 trillion rmb in market cap.

Guess who gained?

Banks in aggregate went from 10 trillion rmb to 14 trillion rmb in market cap, gaining 4 trillion rmb in about 4.5 years.

Solar and Baijiu are more private companies.

Banks are more SOEs.

Solar is a representation of how involution destroyed value;

Baijiu is a representation of how declined consumption/macro pressured stocks.

First quarter China household net additional mortgage lowest in 10 years

For the first quarter of 2026, the net increase in mid-to-long-term household rmb debt is lower than 2015 by ~33%. This is an approx of net new mortgages.

2015 was the year of 棚改货币化 / 去库存

2016 was the year of 房住不炒 (near end of the year)

1q26 – 2026年一季度金融统计数据报告

3月末，本外币贷款余额284.51万亿元，同比增长5.7%。月末人民币贷款余额280.51万亿元，同比增长5.7%。一季度人民币贷款增加8.6万亿元。分部门看，住户贷款增加2967亿元，其中，短期贷款减少1640亿元，中长期贷款增加4607亿元；企（事）业单位贷款增加8.6万亿元，其中，短期贷款增加4.13万亿元，中长期贷款增加5.42万亿元，票据融资减少1.1万亿元；非银行业金融机构贷款减少3680亿元。

1q15 – 2015年一季度金融统计数据报告

3月末，本外币贷款余额91.52万亿元，同比增长13.3%。月末人民币贷款余额85.91万亿元，同比增长14.0%，增速比上月末低0.3个百分点，比去年末高0.3个百分点。一季度人民币贷款增加3.68万亿元，同比多增6018亿元。分部门看，住户贷款增加8892亿元，其中，短期贷款增加2064亿元，中长期贷款增加6828亿元；非金融企业及其他部门贷款增加2.71万亿元，其中，短期贷款增加9543亿元，中长期贷款增加1.48万亿元，票据融资增加1643亿元；非银行业金融机构贷款增加632亿元。3月份人民币贷款增加1.18万亿元,同比少增661亿元。月末外币贷款余额9146亿美元，同比增长4.0%，一季度外币贷款增加341亿美元。

In fact, you need to go back to 2012 to find a lower number.

1q12 – 2012年一季度金融统计数据报告

3月末，本外币贷款余额60.77万亿元，同比增长15.5%。人民币贷款余额57.25万亿元，同比增长15.7%，比上月末高0.5个百分点，比上年末低0.1个百分点。一季度人民币贷款增加2.46万亿元，同比多增2170亿元。分部门看，住户贷款增加4995亿元，其中，短期贷款增加2581亿元，中长期贷款增加2414亿元；非金融企业及其他部门贷款增加1.95万亿元，其中，短期贷款增加1.05万亿元，中长期贷款增加5906亿元，票据融资增加2575亿元。月末外币贷款余额5595亿美元，同比增长17.2%，一季度外币贷款增加211亿美元。

Do you remember the egg prices?

Last year, egg shortages and egg prices were capturing new headlines.

“Can’t find eggs” was a common complaint.

Feb 2025 CNBC – Wholesale egg prices have ‘blown way past’ record highs

Feb 2025 Bloomberg – 56-day streak of higher prices

Wholesale price was $8.07 per dozen – Feb 21, 2025, USDA Egg Market Overview

—-

What about now?

Retail price: $6.23 (Mar 2025) -> $2.35 (Mar 2026) per dozen, down more than 60% from peak in 2025.

Wholesale price: $0.21 per dozen, down 97% from $8.07 in Feb 2025

88% drop in new household mortgage Jan-Feb 2026 vs 2021

In the first two month of 2026, China households increased mid-to-long-term borrowing by 165.4 bn rmb, vs 1356.1 bn rmb in the first two month of 2021.

That is a decrease of 88%.

Households’ new mid-to-long-term borrowing is mostly associated with mortgages / housing purchases.

Details below.

Feb 2026 – PBOC

前两个月人民币贷款增加5.61万亿元。分部门看，住户贷款减少1942亿元，其中，短期贷款减少3596亿元，中长期贷款增加1654亿元；

Feb 2021 – PBOC

2月份人民币贷款增加1.36万亿元，同比多增4529亿元。分部门看，住户贷款增加1421亿元，其中，短期贷款减少2691亿元，中长期贷款增加4113亿元

Jan 2021 – PBOC

1月份人民币贷款增加3.58万亿元，同比多增2252亿元。分部门看，住户贷款增加1.27万亿元，其中，短期贷款增加3278亿元，中长期贷款增加9448亿元

Nongfu vs. PopMart

Nongfu is ~25x 2026 P/E with ~13% 2027 EPS growth

PopMart is ~15x 2026 P/E with 27% 2027 EPS growth

Nongfu enjoys almost 4 times PEG vs. PopMart.

PopMart sounds like fashion – however, I see no real competitor in its space.

Nongfu sounds like a staple that can only grow – however, I see more competition here than what investors may assume.

China long-term real interest rate dips to 0.5% in Feb driven by higher CPI, vs 1.75% in US

China long-term real interest rate dips to 0.5% in Feb vs 1.6% in Jan and avg of 1.7% in 2025, driven by higher CPI.

China long-term real interest rate is calculated by 10-year CGB yield ~1.81% in Feb minus Feb CPI of 1.3%.

Avg. long-term real interest rate of 1.7% in 2025 is calculated by averaging monthly LT real interest rate using the same method.

vs. US 10-Year Real Interest Rate of 1.75% in Feb.

EU energy crisis again?

https://www.cmegroup.com/markets/energy/natural-gas/dutch-ttf-natural-gas-usd-mmbtu-icis-heren-front-month.html

The Dutch TTF Natural Gas future price jumped 10x to over €300/MWh at its peak in 2022.

Right now, it’s only about doubled.

Fundamental differences:

1/ Europe’s direct exposure to Qatar is much smaller than its 2022 exposure to Russian pipeline gas.

Qatar accounted for about 4% of EU gas supply, and roughly 8% of Europe’s LNG, while the U.S. supplied 25.4% of EU gas supply and is Europe’s top LNG supplier.

In 2021, Russia was the primary energy supplier for the European Union (EU), providing approximately 45% of its total gas imports.

In 2022, Russia gas was a direct loss. Now is more indirect.

2/ Market “believes” shock is temporary.

In Europe in 2022, Russian pipeline gas to the EU fell from about 140 bcm in 2021 to around 60 bcm in 2022, and comparing 2023 vs 2021 Russian pipeline deliveries to Europe fell by almost 120 bcm.

While Qatar’s supply of 112 bcm of LNG transited Hormuz in 2025, pricing is still pointing to some normalization over the next 6–12 months rather than a permanent loss.

China: dominating renewable additional, but biggest oil net importer

Despite that

1/ Solar is now the dominant form of global capacity additions, comprising 60% of new capacity in 2024

2/ China is a renewable energy juggernaut: it now accounts for 50%-60% of all global new renewable capacity additions.

3/ Most renewable supply chains go through China.

It doesn’t change the fact that China is a big (and biggest) and growing net importer of oil. In 2024, China imported about 11.1 million barrels/day of crude oil.

China’s coffee consumption growth slows

Luckin Coffee, the largest coffee chain in China, posted 1.2% company-owned same-store sales growth for 4q25, which is weak.

During earnings call, Luckin says China’s coffee market is still in a rapid growing phase – is that so?

I think there is still room, but current “coffee intensity” is already like in a mature stage.

Starbucks reward members (35mn) consume 3-5 cups per month.

Luckin members consumes close to 342mn cups per month in 2025 (4.1bn cups annually) and close to 100mn monthly transacting consumers, which translate to over 3 cups per customer per month approximately.

Why there is still room (but may be hard to penetrate)?

1) Luckin’s 450mn customer base means there could be 1.5x to 2x room in China, excluding children and elderly.

2) If Starbucks can get 16k stores in US, Luckin may get up to 4x of that which is over 60k stores in China, or 2x from current 30k stores.

3) Starbucks Reward member is an underestimation of active consumers of Starbucks, which could be like 70-90mn. 4x of that gives you 210-360mn potential which is 2-3x from current 100mn for Luckin.

Why hard to penetrate?

1) lower-hanging fruit / easy regions already have footprint.

2) China has more “layers” of consumers; thus hard to have one-size-fit-all offering. There are more competitions in China. Can’t handle price sensitive and premium customers together.