reports
- Greater China Research Team
Greater China Strategy Alpha Picks: February Conviction Calls
The HSI and the MSCI China fell 9.2% and 10.5% mom respectively in Jan 24, dragged down by IT and consumer discretionary stocks amid low market confidence and negative geopolitical news flow. The policy easing in late-Jan 24 may have established a bottom, but the timing of a new upcycle remains uncertain, contingent on favourable macro news flow in the near term. Hence, we remain hedged, adding COSCO Shipping Holdings and FII to our BUY list, with additional SELL calls on Li Auto and Xpeng.
00992 LENOVO GROUP LIMITED
SXC SUNNY OPTICAL TECHNOLOGY (GROUP) CO. LTD.
RLF LONGFOR GROUP HOLDINGS LTD.
00027 GALAXY ENTERTAINMENT GROUP LIMITED
601919 COSCO SHIPPING HOLDINGS CO. LTD. CLASS A
4DS 4DS MEMORY
COSCO SHIPPING HOLDINGS CO. LTD. CLASS H
PDD PINDUODUO INC. SPONSORED ADR CLASS A
TCOM US TRIP.COM TCOM US
1199 COSCO SHIPPING PORTS LIMITED
601138 FOXCONN INDUSTRIAL INTERNET CO. LTD. CLASS A
LI LI AUTO INC. SPONSORED ADR CLASS A
XPEV XPENG INC. ADR SPONSORED CLASS A
9868 XPENG INC
2015 LI AUTO INC
9999 HK PINDUODUO PDD US
9961 NETEASE INC
4DX TRIP.COM GROUP LTD
4D MEDICAL LTD
- Julia Pan Mengyao
- Ming San Soong
China Online Travel Agencies: Strong travel demand visibility into 202...
New Year’s Festival 2024 recorded strong travel growth, bolstered by the ongoing travel consumption upgrade and encouraging promotion policies to stimulate travel demand. This sets a compelling prelude for both companies to capture the resilient momentum of domestic travel demand during the Spring Festival holiday. We still prefer TCOM as it is the key proxy to capture the strong demand for international and outbound travel. Maintain OVERWEIGHT.
- Greater China Research Team
Greater China Strategy Alpha Picks: January Conviction Calls
The HSI was flat in Dec 23 but the MSCI China fell 2.6% mom. Despite the announcement of new policy support and prospects of US rate cuts in 2024, investors sold into strength following weaker macro data. With MSCI China trading at 9.0x 12-month forward PE, we expect most negatives to have been priced in. We add the potential beneficiaries of the CNY festival − Galaxy Entertainment and Trip.com − to our BUY list, but include SELL calls on BYD and Geely due to the subsidy cut.
NEH NETEASE INC. SPONSORED ADR
GRU GEELY AUTOMOBILE HOLDINGS LIMITED
00992 LENOVO GROUP LIMITED
SXC SUNNY OPTICAL TECHNOLOGY (GROUP) CO. LTD.
RLF LONGFOR GROUP HOLDINGS LTD.
00027 GALAXY ENTERTAINMENT GROUP LIMITED
1211 BYD COMPANY LIMITED CLASS H
PDD PINDUODUO INC. SPONSORED ADR CLASS A
1801 INNOVENT BIOLOGICS INC
TCOM US TRIP.COM TCOM US
1093 CSPC PHARMACEUTICAL GROUP LTD
1199 COSCO SHIPPING PORTS LIMITED
1209 CHINA RESOURCES MIXC LIFESTYLE SERVICES
9999 HK PINDUODUO PDD US
9961 NETEASE INC
TRIP.COM GROUP LTD
- Julia Pan Mengyao
- Ming San Soong
Trip.com (9961 HK): 3Q23: Earnings beat; 2024 prospects fuelled by int...
TCOM’s 3Q23 net revenue soared 99.4% yoy to Rmb13.8b and was 31% above pre- COVID-19 levels, in line with the street’s estimates. Non-GAAP net profit was Rmb4.9b, translating to a net profit margin of 35.6%, beating our and the street’s estimates. TCOM guided for 4Q23 revenue growth of 100-110% yoy, or 20-26% above 4Q19 levels. We believe Trip.com’s rapid growth and outbound travel recovery will be the core growth pillars for 2024. Maintain BUY with a higher target price of HK$420.00 (US$54.00).
- Jo Yee Ng
- Johnny Yum Chung Man
- Julia Pan Mengyao
- Ming San Soong
- Shirley Wang Xueyi
- Stella Guo Yuting
- Terence Chiu
Greater China Daily: Wednesday, November 22, 2023
KEY HIGHLIGHTS Sector Industrial Automation Demand stabilises with marginal recovery in 4Q23, demand driver to shift in 2024. Downgrade to MARKET WEIGHT. Results Baidu Inc (9888 HK/BUY/HK$107.40/Target: HK$166.00) 3Q23: Earnings beat; expecting monetisation of ERNIE 4.0. Kuaishou Technology (1024 HK/BUY/HK$58.50/Target: HK$97.00) 3Q23: Solid earnings beat; key beneficiary of adtech tailwinds. Miniso (MNSO US/NOT RATED/US$27.66) 1QFY24: Earnings beat; strong growth from overseas and...
- Julia Pan Mengyao
- Ming San Soong
China Internet: 3Q23 results preview: Solid e-commerce ad growth to dr...
We expect e-commerce ads and overseas e-commerce expansion to be the main driving forces spurring stagnant growth in 3Q23 and beyond. In addition, we are optimistic about the better-the-expected growth in game gross profit and on-track OTA data on the back of strong seasonality. We are also looking out for meaningful progress in AIGC development in 3Q23 and better visibility in 4Q23. Maintain MARKET WEIGHT on the internet sector.
JD JD.COM INC. SPONSORED ADR CLASS A
K3SD BAIDU INC SPONSORED ADR CLASS A
A117ME ALIBABA GROUP HOLDING LTD. SPONSORED ADR
3690 MEITUAN DIANPING 3690 HK
700 HK TENCENT 700 HK
TCOM US TRIP.COM TCOM US
9988 ALIBABA (9988 HK)
9618 JD.COM INC
1024 KUAISHOU TECHNOLOGY
9888 BAIDU INC
PDD PINDUODUO PDD US
9999 HK NETEASE INC
780 TONGCHENG TRAVEL HOLDINGS LTD
9961 TRIP.COM GROUP LTD
- Greater China Research Team
Greater China Strategy Alpha Picks: October conviction calls.
MSCI China and HSI fell 1.2% and 1.4% respectively in September as investors’ sentiment was dampened by the weaker macro data and renewed property sector woes. Moreover, higher US bond yields and US dollar strength added to the downside pressure. For October, we expect further downside pressure, so we add SELLs on Henlius and Xpeng to the list, on top of BUYs on Anta, Lenovo, PICC P&C and SHKP.
K3SD BAIDU INC SPONSORED ADR CLASS A
00016 SUN HUNG KAI PROPERTIES LIMITED
00992 LENOVO GROUP LIMITED
01109 CHINA RESOURCES LAND LIMITED
02328 PICC PROPERTY & CASUALTY CO. LTD. CLASS H
600519 KWEICHOW MOUTAI CO. LTD. CLASS A
1211 BYD COMPANY LIMITED CLASS H
TCOM TRIP.COM GROUP LTD. SPONSORED ADR
1496219D BEIJING KUAISHOU TECHNOLOGY
709 GIORDANO INTERNATIONAL LTD
TCOM US TRIP.COM TCOM US
300750 CONTEMPORARY AMPEREX TECHNOLOGY CO. LTD. CLASS A
2696 SHANGHAI HENLIUS BIOTECH INC
1024 KUAISHOU TECHNOLOGY
XPEV XPENG INC. ADR SPONSORED CLASS A
9868 XPENG INC
9888 BAIDU INC
9961 TRIP.COM GROUP LTD
- Julia Pan Mengyao
- Ming San Soong
China Online Travel Agencies: Robust Mid-Autumn Festival and Golden We...
China is on track for a bumper travel season as reflected in resilient travel pre-sales data. With the Mid-Autumn Festival and National Day holidays being back-to-back this year, the number of travellers for the eight-day holiday period is expected to exceed pre-pandemic levels. China Tourism Academy predicts the daily average number of travellers will exceed 100m. We still prefer Trip.com as it is the key proxy to capture the strong demand for international and outbound travel. Maintain OVERWEI...
- Julia Pan Mengyao
- Ming San Soong
China Internet: Strong growth in online ads and OTA likely to continue...
China’s internet sector delivered solid 2Q23 results with an earnings beat but this was followed by lukewarm 3Q23 guidance from most companies navigating macro uncertainty. In view of the intense competition and saturated growth, internet companies are ramping up AIGC investment and cross border expansion against a favourable regulatory backdrop. Maintain MARKET WEIGHT on the internet sector due to heavy investment in new initiatives leading to margin erosion.
JD JD.COM INC. SPONSORED ADR CLASS A
K3SD BAIDU INC SPONSORED ADR CLASS A
A117ME ALIBABA GROUP HOLDING LTD. SPONSORED ADR
00700 TENCENT HOLDINGS LTD.
1496219D BEIJING KUAISHOU TECHNOLOGY
3690 MEITUAN DIANPING 3690 HK
700 HK TENCENT 700 HK
TCOM US TRIP.COM TCOM US
9988 ALIBABA (9988 HK)
BEKE KE HOLDINGS INC
9618 JD.COM INC
1024 KUAISHOU TECHNOLOGY
9888 BAIDU INC
PDD PINDUODUO PDD US
9999 HK NETEASE INC
780 TONGCHENG TRAVEL HOLDINGS LTD
9961 TRIP.COM GROUP LTD
- Julia Pan Mengyao
- Ming San Soong
Trip.com (9961 HK): 2Q23: Solid results beat; concerns on 2024 growth ...
TCOM delivered a strong set of 2Q23 results. 2Q23 net revenue soared 180% yoy to Rmb11.3b and was 29.4% above pre-COVID-19 levels, beating the street’s estimates by 4%. Non-GAAP net profit was Rmb3.4b, translating to a net profit margin of 30.5%, beating our and street estimates. TCOM guided 3Q23 revenue growth of 95-100% yoy, or 28-33% above 2Q19 levels (8% above street estimates). Maintain BUY with a higher target price of HK$418.00 (US$56.00).
- Damon Shen
- Jieqi Liu
- Jo Yee Ng
- Johnny Yum Chung Man
- Julia Pan Mengyao
- Kate Luang
- Ming San Soong
- Stella Guo Yuting
- Terence Chiu
Greater China Daily: Wednesday, September 6, 2023
KEY HIGHLIGHTS Sector Property Management 1H23 results wrap-up: Benefitting from strong property policy in 2H23. Sportswear 1H23 results wrap-up: Expect better sales growth momentum in 4Q23 but discounts may deepen. Results Trip.com (9961 HK/BUY/HK$304.00/Target: HK$418.00) 2Q23: Solid results beat; concerns on 2024 growth after the robust recovery. Update Giordano International (709 HK/BUY/HK$2.88/Target: HK$3.89) Takeaways from luncheon. TRADERS’ CORNER Semiconductor Manufacturing Interna...
- Jin Yoon
TCOM 2Q23 Results: Travel Demand Remains Resilient in 3Q
What's new: Trip.com’s reported 2Q23 results were above consensus and our expectations. Travel activities remain resilient during summer months and heading into mid-Autumn Festival in Sep and National Day holiday in Oct driven by continued release in pent-up demand and further recovery in international flight capacity. We maintain our PT at USD 45. Analysts: Jin Yoon
- Greater China Research Team
China Strategy Alpha Picks: September conviction calls.
Both the MSCI China and HSI fell about 8.5% in August as the lack of significant stimulus announcements dampened market sentiment. The August earnings season also saw relatively conservative management guidance and emphasis on cost efficiencies and asset light strategies. Against this backdrop, we focus on stocks with pricing power or sustainable margins; we add Giordano, KE Holdings and Trip.com to our BUY list.
01109 CHINA RESOURCES LAND LIMITED
600519 KWEICHOW MOUTAI CO. LTD. CLASS A
300124 SHENZHEN INOVANCE TECHNOLOGY CO. LTD CLASS A
599A SANDS CHINA LTD.
02669 CHINA OVERSEAS PROPERTY HOLDINGS LIMITED
2318 PING AN INSURANCE (GROUP) COMPANY OF CHINA LTD. CLASS H
1211 BYD COMPANY LIMITED CLASS H
1928-HK SANDS CHINA
1496219D BEIJING KUAISHOU TECHNOLOGY
709 GIORDANO INTERNATIONAL LTD
TCOM US TRIP.COM TCOM US
300750 CONTEMPORARY AMPEREX TECHNOLOGY CO. LTD. CLASS A
BEKE KE HOLDINGS INC
1024 KUAISHOU TECHNOLOGY
9888 BAIDU INC
9961 TRIP.COM GROUP LTD
002912 SHENZHEN SINOVATIO TECHNOLOGY CO
- Jin Yoon
TCOM 2Q23 Preview: Travel Recovery Momentum Remains Intact
What’s New: We maintain 2Q but up our 3Q top-line estimates as travel momentum in the summer months continues to be stronger than that of 2Q. In this note, we highlight the latest updates to the business including travel recovery and margin outlook. Analysts: Jin Yoon
- Greater China Research Team
- Julia Pan Mengyao
China Online Travel Agencies: Softer data for 2023 Dragon Boat Festiva...
The Dragon Boat Festival delivered alleviated performance with total revenue/tourist numbers recovering to 95%/113% of pre-COVID-19 levels vs 101%/119% during the Labour Day holiday. However, we foresee better momentum during the summer holiday amid continuous improvement for outbound travel. We still prefer Trip.com as it is the key proxy to benefit from a rebound in international and outbound travel. Maintain OVERWEIGHT on the OTA sector.
- Greater China Research Team
- Tham Mun Hon
002594 BYD COMPANY LIMITED CLASS A
300015 AIER EYE HOSPITAL GROUP CO. LTD. CLASS A
600519 KWEICHOW MOUTAI CO. LTD. CLASS A
00700 TENCENT HOLDINGS LTD.
02669 CHINA OVERSEAS PROPERTY HOLDINGS LIMITED
1211 BYD COMPANY LIMITED CLASS H
2338 WEICHAI POWER CO. LTD. CLASS H
1496219D BEIJING KUAISHOU TECHNOLOGY
2747 ESTUN AUTOMATION
338 WEICHAI POWER
700 HK TENCENT 700 HK
TCOM US TRIP.COM TCOM US
1585 YADEA GROUP HOLDINGS LTD
1024 KUAISHOU TECHNOLOGY
9961 TRIP.COM GROUP LTD
- Greater China Research Team
- Tham Mun Hon
2H23 Market Strategy: Time for a booster?
MSCI China now trades at an undemanding 12-month forward PE of 10.2x, or a 37.0% discount to Emerging Asia. This steep discount is unwarranted and we expect valuation to normalise in 2H23, backed by additional policy support. However, a significant re-rating is only possible if credit growth accelerates; hence, our index target is at 74 points for now, implying 12.0x target PE. We prefer exposure to automobiles, consumer, industrial automation and online gaming. Steep discount unwarranted. We...
A117ME ALIBABA GROUP HOLDING LTD. SPONSORED ADR
00016 SUN HUNG KAI PROPERTIES LIMITED
XGH ENN ENERGY HOLDINGS LIMITED
00823 LINK REAL ESTATE INVESTMENT TRUST
PRU PRUDENTIAL PLC
01109 CHINA RESOURCES LAND LIMITED
SXC SUNNY OPTICAL TECHNOLOGY (GROUP) CO. LTD.
002594 BYD COMPANY LIMITED CLASS A
01299 AIA GROUP LIMITED
300015 AIER EYE HOSPITAL GROUP CO. LTD. CLASS A
600519 KWEICHOW MOUTAI CO. LTD. CLASS A
600887 INNER MONGOLIA YILI INDUSTRIAL GROUP CO. LTD. CLASS A
ORI1 ORIENT OVERSEAS (INTERNATIONAL) LIMITED
600872 JONJEE HI-TECH INDUSTRIAL AND COMMERCIAL HOLDING CO. LTD. CLASS A
601919 COSCO SHIPPING HOLDINGS CO. LTD. CLASS A
599A SANDS CHINA LTD.
00700 TENCENT HOLDINGS LTD.
02669 CHINA OVERSEAS PROPERTY HOLDINGS LIMITED
0914 ANHUI CONCH CEMENT COMPANY LIMITED CLASS H
2318 PING AN INSURANCE (GROUP) COMPANY OF CHINA LTD. CLASS H
M4B CHINA MERCHANTS BANK CO. LTD. CLASS H
1211 BYD COMPANY LIMITED CLASS H
2338 WEICHAI POWER CO. LTD. CLASS H
753 AIR CHINA LTD-H
670 CHINA EASTERN AIRLINES CO-H
1928-HK SANDS CHINA
916 CHINA LONGYUAN POWER GROUP-H
300760 SHENZHEN MINDRAY BIO-MEDICAL ELECTRONICS CO. LTD. CLASS A
1055 CHINA SOUTHERN AIRLINES CO-H
2747 ESTUN AUTOMATION
700 HK TENCENT 700 HK
TCOM US TRIP.COM TCOM US
9988 ALIBABA (9988 HK)
1199 COSCO SHIPPING PORTS LIMITED
9922 JIUMAOJIU INTERNATIONAL HOLDINGS LTD
1585 YADEA GROUP HOLDINGS LTD
2696 SHANGHAI HENLIUS BIOTECH INC
1024 KUAISHOU TECHNOLOGY
291 CHINA RESOURCES BEER HOLDINGS CO LTD
3692 HANSOH PHARMACEUTICAL GROUP
06690 HAIER SMART HOME CO. LTD. CLASS H
9961 TRIP.COM GROUP LTD
- Greater China Research Team
- Julia Pan Mengyao
Trip.com (9961 HK): 1Q23: Robust earnings beat; anticipating a meaning...
TCOM delivered a strong beat in 1Q23 results. 1Q23 net revenue soared 124% yoy to Rmb9.2b and was 12.7% above pre-COVID-19 levels, beating the street’s estimates by 14%. Non-GAAP net profit was Rmb2.1b, translating to a net profit margin of 22.5%, beating our and street estimates. TCOM guided 2Q23 revenue growth of 163-174% yoy, or 22-27% above 2Q19 levels (29% above street estimates), on strong seasonality. Maintain BUY with a lower target price of HK$411.00 (US$54.00).
- Carol Dou Xiao Qin
- Greater China Research Team
- Julia Pan Mengyao
- Ken Lee
- Sunny Chen
- Terence Chiu
Greater China Daily: Friday, June 9, 2023
KEY HIGHLIGHTS Sector Automobile Weekly: May ICE-car sales beat estimates on price cuts. EV sales are in line, driven by exports. Maintain UNDERWEIGHT with a preference for the EV segment. Top BUYs: BYD, Li Auto and CATL. Healthcare Be selective amid challenges and attractive emerging valuations. Results Trip.com (9961 HK/BUY/HK$268.60/Target: HK$411.00) 1Q23: Robust earnings beat; anticipating a meaningful recovery in outbound travel. TRADERS’ CORNER Trip.com Group Limited (9961 HK): Tradin...
- Jin Yoon
TCOM 1Q23 Results: Robust Demand into 2H
What's new: Trip.com’s reported 1Q23 results were above consensus and our expectations. Travel activities could remain robust in 2Q and heading into summer driven by pent up demand in both domestic and outbound markets. We maintain our PT at USD 45. Analysts: Jin Yoon
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