reports
- Jo Yee Ng
- Shirley Wang Xueyi
- Stella Guo Yuting
China Consumer: Tourism, catering and movie consumption: Strong perfor...
During the Chinese New Year (CNY) holiday, tourism, both domestic and outbound, catering and movie consumption put up strong performances. For the consumer sector, we prefer discretionary to staple, and Macau gaming in the discretionary space, given the strong recovery momentum of Macau tourism and moderate hike in opex. Galaxy is our top pick in Macau gaming sector, given its net cash position amid the higher interests. Maintain OVERWEIGHT.
AS7 ANTA SPORTS PRODUCTS LTD.
ADCB ABU DHABI COMMERCIAL BANK
600132 CHONGQING BREWERY CO.LTD CLASS A
000858 WULIANGYE YIBIN CO. LTD. CLASS A
600809 SHANXI XINGHUACUN FEN WINE FACTORY CO. LTD. CLASS A
EZQ CHINA MENGNIU DAIRY CO. LTD.
600519 KWEICHOW MOUTAI CO. LTD. CLASS A
600887 INNER MONGOLIA YILI INDUSTRIAL GROUP CO. LTD. CLASS A
00027 GALAXY ENTERTAINMENT GROUP LIMITED
600872 JONJEE HI-TECH INDUSTRIAL AND COMMERCIAL HOLDING CO. LTD. CLASS A
000333 MIDEA GROUP CO. LTD. CLASS A
603288 FOSHAN HAITIAN FLAVOURING & FOOD CO. LTD. CLASS A
0168 TSINGTAO BREWERY CO. LTD. CLASS H
1928-HK SANDS CHINA
1368 XTEP INTERNATIONAL HOLDINGS
0606923D CHINA DUTY FREE GROUP CO LTD
6862 HAIDILAO INTERNATIONAL HOLDING LTD
2331 LI NING CO LTD
01876 BUDWEISER BREWING CO. APAC LTD.
6186 CHINA FEIHE LTD
9922 JIUMAOJIU INTERNATIONAL HOLDINGS LTD
ONEM 1LIFE HEALTHCARE
291 CHINA RESOURCES BEER HOLDINGS CO LTD
06690 HAIER SMART HOME CO. LTD. CLASS H
- Jo Yee Ng
- Shirley Wang Xueyi
- Stella Guo Yuting
Li Ning (2331 HK): Unreasonable property purchase reflects weak corpor...
Li Ning announced to acquire a property in Hong Kong from Henderson Land, which we think is irrelevant to its main business and may deteriorate the company’s financial statements. In our view, the transaction reflects Li Ning’s weak corporate governance. Thus, we cut Li Ning’s target price by 61% to HK$18.80 and downgrade Li Ning from BUY to SELL.
- Jo Yee Ng
- Julia Pan Mengyao
- Ming San Soong
- Shirley Wang Xueyi
- Stella Guo Yuting
- Terence Chiu
Greater China Daily: Monday, December 11, 2023
KEY HIGHLIGHTS Initiate Coverage iFlytek (002230 CH/BUY/Rmb45.38/Target: Rmb62.00) Trailblazer in voice recognition AI poised to capture AIGC opportunities. Update Li Ning (2331 HK/SELL/HK$21.35/Target: HK$18.80) Unreasonable property purchase reflects weak corporate governance. HSI AND HS TECH INDEX OUTLOOK
- Jo Yee Ng
- Julia Pan Mengyao
- Kong Ho Meng
- Limartha Adhiputra
- Ming San Soong
- Roy Chen Chengzhi
- Shirley Wang Xueyi
- Stella Guo Yuting
Regional Morning Notes - Monday, December 11, 2023
GREATER CHINA Initiate Coverage iFlytek (002230 CH/BUY/Rmb45.38/Target: Rmb62.00): Trailblazer in voice recognition AI poised to capture AIGC opportunities. Update Li Ning (2331 HK/SELL/HK$21.35/Target: HK$18.80): Unreasonable property purchase reflects weak corporate governance. INDONESIA Update Indocement Tunggal Prakarsa (INTP IJ/BUY/Rp9,375/Target: Rp14,100): Acquisition to regain market share with potential earnings accretion of 11.2%. MALAYSIA Update Westports Holdings (WPRTS MK/BUY/RM3....
- Jo Yee Ng
- Shirley Wang Xueyi
- Stella Guo Yuting
Li Ning (2331 HK): Aiming to penetrate lower-tier cities; time needed ...
Li Ning is targeting >double-digit revenue CAGR during 2023-28, supported by its strategy to expand into lower-tier markets. While pursuing scale expansion, the company will also make quality growth a key focus, maintaining a healthy inventory level and solving its channel problem. We are in favour of Li Ning’s initiatives, but time is needed to achieve its goals. Maintain BUY and target price of HK$48.80.
- Bella Lu Yifei
- Jo Yee Ng
- Ken Lee
- Shirley Wang Xueyi
- Stella Guo Yuting
- Terence Chiu
Greater China Daily: Friday, November 3, 2023
KEY HIGHLIGHTS Sector Automobile Weekly: 3Q23 results wrap-up; analysis of BYD’s channel inventory level. Maintain UNDERWEIGHT. Top BUYs: BYD, CATL and Li Auto. Update Li Ning (2331 HK/BUY/HK$25.85/Target: HK$48.80) Aiming to penetrate lower-tier cities; time needed to balance quality and growth. TRADERS’ CORNER 3SBIO INC. (1530 HK): Trading Buy range: HK$6.70-6.86 Huaneng Power International, Inc (902 HK): Trading Buy range: HK$3.60-3.70
- Bella Lu Yifei
- Benjaphol Suthwanish
- Desmond Chong Chee Wai
- Jo Yee Ng
- Johnny Yum
- Jonathan Koh
- Kasemsun Koonnara
- Ken Lee
- Llelleythan Tan Tan
- Shirley Wang Xueyi
- Stella Guo Yuting
- Tanaporn Visaruthaphong
Regional Morning Notes - Friday, November 03, 2023
GREATER CHINA Sector Automobile: Weekly: 3Q23 results wrap-up; analysis of BYD’s channel inventory level. Maintain UNDERWEIGHT. Top BUYs: BYD, CATL and Li Auto. Update Li Ning (2331 HK/BUY/HK$25.85/Target: HK$48.80): Aiming to penetrate lower-tier cities; time needed to balance quality and growth. INDONESIA Strategy Alpha Picks: Outperformance Despite Negative Returns: Our picks: TLKM, BBNI, SMGR, NCKL, CTRA, MYOR, AKRA and CMRY. MALAYSIA Results Pentamaster Corporation (PENT MK/BUY/RM4.89/Tar...
- Jo Yee Ng
- Shirley Wang Xueyi
- Stella Guo Yuting
Li Ning (2331 HK): Cut full-year revenue guidance to single-digit % gr...
Li Ning’s disappointing 3Q23 business operations can be attributed to distributors’ cross-region and channel sales. Management cut the company’s full-year revenue guidance to single-digit % yoy growth (vs mid-teens % previously), and implied that margins should be under pressure. We think the company will take a long time to strengthen its control on distributors. We cut target price by 10% to HK$48.80. Maintain BUY on its cheap valuation.
- Bella Lu Yifei
- Carol Dou Xiao Qin
- Damon Shen
- Greater China Research Team
- Jieqi Liu
- Jo Yee Ng
- Ken Lee
- Shirley Wang Xueyi
- Stella Guo Yuting
- Sunny Chen
- Terence Chiu
- Ziv Ang Sze Champ
Greater China Daily: Thursday, October 26, 2023
KEY HIGHLIGHTS Strategy Hong Kong Exchange and Hong Kong Property Sector neutral view on the policies related to the stock market. overall impact on the property industry is natural to negative. Results Aier Eye Hospital Group (300015 CH/BUY/Rmb16.61/Target: Rmb21.00) 9M23: Satisfactory results; weak economic conditions may slow revenue growth. Baoshan Iron & Steel (600019 CH/BUY/Rmb6.33/Target: Rmb7.10) 3Q23: In line; gross margin jumps 3.3 ppt qoq to 8.3%. China Overseas Land & Investment ...
- Bella Lu Yifei
- Carol Dou Xiao Qin
- Damon Shen
- Greater China Research Team
- Jieqi Liu
- Jo Yee Ng
- Jonathan Koh
- Ken Lee
- Kong Ho Meng
- Kwanchai Atiphophai
- Nurul Nazira Binti Abdullah
- Shirley Wang Xueyi
- Stella Guo Yuting
- Stevanus Juanda
- Sunny Chen
- Ziv Ang Sze Champ
Regional Morning Notes - Thursday, October 26, 2023
GREATER CHINA Strategy Hong Kong Exchange and Hong Kong Property Sector: Takeaways from 2023 Hong Kong Policy Address: Policies largely in line; Maintain MARKET WEIGHT. Results Aier Eye Hospital Group (300015 CH/BUY/Rmb16.61/Target: Rmb21.00): 9M23: Satisfactory results; weak economic conditions may slow revenue growth. Baoshan Iron & Steel (600019 CH/BUY/Rmb6.33/Target: Rmb7.10): 3Q23: In line; gross margin jumps 3.3 ppt qoq to 8.3%. China Overseas Land & Investment (688 HK/BUY/HK$14.90/Target:...
00688 CHINA OVERSEAS LAND & INVESTMENT LIMITED
300015 AIER EYE HOSPITAL GROUP CO. LTD. CLASS A
UNVR PT UNILEVER INDONESIA TBK
5243 VELESTO ENERGY
600019 BAOSHAN IRON & STEEL CO. LTD. CLASS A
FEHT FAR EAST HOSPITALITY TRUST
2331 LI NING CO LTD
CMMT CAPITALAND MALAYSIA TRUST
- Jo Yee Ng
- Shirley Wang Xueyi
- Stella Guo Yuting
China Consumer: Good recovery by domestic tourism and catering during ...
During the Golden Week holiday, domestic tourism and catering recovery were on track while duty-free sales recovery was still weak. We prefer sportswear in the discretionary space, given the decent sales momentum during the holiday (Anta: in line with internal targets; Xtep: 20% yoy growth), and baijiu in the staples space, given baijiu’s strong brand power. We prefer Anta in the sportswear sector, given its multiple catalysts, and Moutai in the baijiu sector, for its highest earnings visibility...
AS7 ANTA SPORTS PRODUCTS LTD.
600132 CHONGQING BREWERY CO.LTD CLASS A
000858 WULIANGYE YIBIN CO. LTD. CLASS A
600809 SHANXI XINGHUACUN FEN WINE FACTORY CO. LTD. CLASS A
EZQ CHINA MENGNIU DAIRY CO. LTD.
600519 KWEICHOW MOUTAI CO. LTD. CLASS A
600887 INNER MONGOLIA YILI INDUSTRIAL GROUP CO. LTD. CLASS A
00027 GALAXY ENTERTAINMENT GROUP LIMITED
600872 JONJEE HI-TECH INDUSTRIAL AND COMMERCIAL HOLDING CO. LTD. CLASS A
601888 CHINA TOURISM GROUP DUTY FREE CORPORATION LIMITED CLASS A
599A SANDS CHINA LTD.
000333 MIDEA GROUP CO. LTD. CLASS A
603288 FOSHAN HAITIAN FLAVOURING & FOOD CO. LTD. CLASS A
168 TSINGTAO BREWERY CO LTD
1928-HK SANDS CHINA
333 MIDEA GROUP
1368 XTEP INTERNATIONAL HOLDINGS
6862 HAIDILAO INTERNATIONAL HOLDING LTD
2331 LI NING CO LTD
01876 BUDWEISER BREWING CO. APAC LTD.
6186 CHINA FEIHE LTD
9922 JIUMAOJIU INTERNATIONAL HOLDINGS LTD
ONEM 1LIFE HEALTHCARE
1876:HK BUDWEISER BREWING CO APAC LTD
291 CHINA RESOURCES BEER HOLDINGS CO LTD
06690 HAIER SMART HOME CO. LTD. CLASS H
- Jo Yee Ng
- Shirley Wang Xueyi
- Stella Guo Yuting
Sportswear Sector - Early-October An Entry Point; Anta As New Top Pick
China’s sportswear companies saw improvements in retail sales momentum from August to early-September due to back-to-school demand. Share prices of Chinese sportswear names have corrected by 8-20% since 4 Sep 23 (vs HSI's -8%), and the current valuation is undemanding (14.1-21.5x 2023F PE). Considering a couple of upcoming catalysts, we think early-October is an appropriate entry point for the sportswear sector. Maintain OVERWEIGHT with Anta as our new top pick. • What we learned from Nike’s 1QF...
- Jo Yee Ng
- Stella Guo Yuting
China Sportswear: 1H23 results wrap-up: Expect better sales growth mom...
Chinese sportswear companies’ modest top-line growth in 1H23 reflected a lukewarm consumption recovery momentum. We expect the sales growth momentum to improve in 4Q23, helped by sportswear companies’ destocking promotions and the low base. Current valuation of China’s sportswear sector is undemanding, which has reflected the capital market’s lowered expectations on sales momentum in 3Q23. We maintain OVERWEIGHT on China’s sportswear sector.
- Jo Yee Ng
- Stella Guo Yuting
Li Ning (2331 HK): 1H23: Results missed; a tough 2H23 ahead.
Li Ning’s 1H23 results missed expectations, mainly dragged by lower gross margin and higher selling expenses. Though management maintained full-year guidance of mid-teens revenue growth, we think this is challenging for the company amid a lukewarm consumption recovery and its decelerating business expansion. We cut our target price by 18% to HK$54.20. Maintain BUY.
- Jo Yee Ng
- Stella Guo Yuting
- Terence Chiu
- Tham Mun Hon
- Adrian Loh Tzum Yung
- Desmond Chong Chee Wai
- Jacquelyn Yow Hui Li
- Jo Yee Ng
- John Cheong Ming Chern
- Keith Wee Teck Keong
- Leow Huey Chuen
- Roy Chen Chengzhi
- Stella Guo Yuting
- Stevanus Juanda
- Tham Mun Hon
- Vincent Khoo Boo Aik
Regional Morning Notes - Monday, August 14, 2023
GREATER CHINA Economics Money Supply: Slower credit growth puts reflation trade at risk. Results Li Ning (2331 HK/BUY/HK$43.35/Target: HK$54.20): 1H23: Results missed; a tough 2H23 ahead. INDONESIA Results Astra International (ASII IJ/BUY/Rp6,750/Target: Rp7,600): 2Q23: Strong results in auto & financial services drive 17% core NPAT growth. MALAYSIA Strategy State Elections: Our risk-on strategy is intact with the unity government maintaining a comfortable majority in its three states. Expect ...
- Jo Yee Ng
- Stella Guo Yuting
Li Ning Company (2331 HK): 1H23: Results Missed; A Tough 2H23 Ahead
Li Ning’s 1H23 results missed, mainly dragged by lower gross margin and higher selling expenses. Though management maintained full-year guidance of mid-teens revenue growth unchanged, we think this is challenging for the company amid a lukewarm consumption recovery and its decelerating business expansion. We cut our target price by 18% to HK$54.20. Maintain BUY.
- Jo Yee Ng
- Stella Guo Yuting
China Sportswear: Local brands to benefit from competitive pricing.
We maintain OVERWEIGHT on the sportswear sector, with this our most preferred subsector in China’s consumer space. In our view, local brands will continue to benefit from their competitive pricing over international brands, given the mass market’s preference for value-for-money products. We are also optimistic on premium brands’ expansion in China, mainly due to the rising popularity of outdoor activities. Top pick: Anta.
- Jo Yee Ng
- Zhifeng Shen
Li Ning Company (2331 HK): Retail sell-through up mid-SD yoy in 1Q23, ...
Li Ning’s 1Q23 retail-sell through grew mid-single digit yoy but SSS declined by high single-digit yoy due to the high base in 2M22. Inventory and discount rates remained healthy, and the 2023 discount rate is expected to narrow by mid-single digits yoy. Retail sell-through growth has accelerated mtd to >20% yoy, with offline retail sales increasing >30% yoy. We expect 2023 retail sell-through and operating metrics to improve against a healthy inventory level. Maintain BUY with target price of H...
- Ariel Poh Yun Li
- Jo Yee Ng
- Johnny Yum Chung Man
- Julia Pan Mengyao
- Ken Lee
- Terence Chiu
- Zhifeng Shen
Greater China Daily: Friday, April 21, 2023
KEY HIGHLIGHTS Sector Automobile 2023 Shanghai Auto Show – The prelude to the endgame of ICE cars. Maintain UNDERWEIGHT. Top picks: BYD, CATL and Ganfeng. Results Zhejiang Shuanghuan Driveline Co (002472 CH/BUY/Rmb23.98/Target: Rmb33.00) 1Q23: Results in line; strong growth momentum from EV, robots and overseas. Update Baidu Inc (9888 HK/BUY/HK$126.40/Target: HK$187.00) 1Q23 results will be solid; ERNIE Bot as the key market focus. Li Ning Company (2331 HK/BUY/HK$57.40/Target: HK$72.60) Reta...
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