Tag: Business

BYD hit a ceiling in China?

BYD domestic volume in May shows no growth yoy, despite overseas growth of 137% yoy.

YTD (Jan-May), BYD domestic volume has grown 27.5% yoy, but in May it’s flattish yoy at below 300k.

The big promotion in May is probably a reason –  dealers might had been waiting for the discount, so that May volume is low.

Current consensus is for BYD to sell ~5.4mn cars in 2025, with overseas contributing 0.8mn and domestic sales reaches 4.6m (to grow near 20% yoy).

China overall passenger car market can grow actually, with cheaper models, large population (4x US!), and shorter holding period for each car (due to battery).

In 2024, U.S. new vehicle sales reached approximately 15.9 million units.

16mn x 4 is 64 million cars per year for China vs. ~22.6 mn passenger cars sold in 2024 in China.

The infrastructure is unlikely to support a sudden increase, but if it increases to 30mn pear year, 70% NEV -> 21mn, 30-33% m/s for BYD -> ~6-7mn is probably the ceiling of domestic volume for BYD.

Notable decline in Baijiu stocks

See my previous posts on Baijiu here (Jun 2024) and here (Sep 2024) – concerns on volume growth and the ability to further increase profitability.

While premium Baijiu company like Moutai can still do ok, as key product’s market price is still higher than its ex-factory price, the price gap is narrowing, which means Moutai’s distributors are having a bad time.

The end demand is additionally weak after Chinese gov’s recent liquor ban.

Moutai’s stock price has declined by ~15% since mid-May (1645 -> 1401). Currently, Jun 16 is one of the lowest closing price in 2025, worse than Apr 7 when tariff hit.

However, this represent a buying opportunity I believe.

Besides Moutai, other Baijiu brands stock also declined. Wuliangye has declined about 15% from its peak this year. In fact, it’s more than 10% lower than end of 2019 level (~rmb 133 per share)!

Luzhou Laojiao has declined about 25% from its peak this year.

They are trading at 20x (5% earnings yield, Moutai) and 14x (7% earnings yield, Wuliangye), and 12x (8% earnings yield, Laojiao) LTM earnings, compared with ~1.6% China’s gov bond yield.

Bizarre Numbers (2)

Detective Conan IP generated less than 1500mn rmb revenue in a year, with film being the largest contribution (~50%).

PopMart’s Labubu generated over 3000mn rmb revenue last year, while most people don’t know Labubu’s stories, its origin, its value, etc.

Bizarre Numbers

UPS and FedEx reported revenue per piece/package is ~$13-$14 (1q25).

SF Express, the most premium express in China, reported ASP of 15.5 rmb in 2024 and ASP of 14.6 rmb in 1q25.

Other express delivery companies in China reported ASP of 2.3 rmb (YTO) and 2.05 rmb (STO and Yunda) in 2024.

Meanwhile, ZTO+YTO+STO+Yuanda+SF -> 330k package per day!

FedEx +UPS is ~40k package per day.

 

Vanke no more monthly report?

It was a tradition for Vanke to disclose its official monthly sales report, which includes information such as sqm (pre) sold, $ amount (pre) sold, and new projects added.

Here is the last one for Dec 2024 monthly report from Vanke; haven’t found 2025 monthly reports for Jan, Feb and Mar 2025.

Here is a monthly chart for monthly contracted sales in rmb 100mn, from Jul 2022 to Dec 2024.

What are people buying?

Clearly not LVMH.

 

The core fashion and leather goods has not been growing much since 2024.

 

Back in 2018, LVMH still grew 10% yoy.

Back in 2008, LVMH still grew 4.3% yoy.

In 2009, LVMH revenue decline by 1% yoy. However, the fashion and leather goods segment still grew ~5% in 2009.

 

Tencent x Ubisoft: a new model?

Ubisoft created a new entity and put valuable assets into it.

Tencent put money into this new entity and got 25% ownership.

While Ubisoft’s shareholder got nothing, Tencent can do more with the important IPs like Assassin Creed.

Maybe there is a limit on how much Tencent can buy into Ubisoft. Maybe the possibility of Ubisoft being acquired is low due to France regulation, not due to Tencent’s previous investments.

Probably it’s the complications and regulations around the world are making those deal structure necessary. Capital is not allowed to buy anything it interested in.

So.. on the positive side, will this model serve as a template for TikTok US?

ByteDance inject some assets  (TikTok US) into a new entity, and new investors inject money or assets into the new entity, so that the new ownership structure can satisfy both US and China’s demands?

Supply chain – Lululelom

Approximately 40% of our products were manufactured in Vietnam, 17% in Cambodia, 11% in Sri Lanka, 11% in Indonesia, and 7% in Bangladesh,
and the remainder in other regions.

Approximately 35% of the fabric used in our products originated from Taiwan, 28% from China Mainland, 11% from South Korea, and the remainder
from other regions