With Chinese Internet stocks outperforming the market in 2020 – on higher valuations rather than rising earnings – they are left potentially vulnerable in 2021e amid tightening regulations in areas including ecommerce, fintech, community group purchases, local services, and online education. Anti-monopoly guidelines are the most concerning as they could create challenges for some current business models. They may also cap the potential for further valuation re-ratings, but we believe the immediate hit to earnings will be limited. As a result, we suggest investors focus on top-line and user growth, as well as companies diversifying into emerging business models such as Meituan, as we see these as catalysts that could drive share price outperformance.