HPHT briefly underperformed the broader Drewry port equity index in 2H21, but thereafter the stock resumed its relative outperformance. Despite the recent outperformance, the company’s stock remained in the undervalued territory, based on its current EV/EBITDA multiple, which is below compared to its peers and its long-term average. We continue to believe that at the current price the stock is value accretive for mid-to-long term investors. We reiterate our Attractive rating on HPHT with a fair ...
China’s PV retail sales surged by more than 50% mom over 6-12 Jun 22, beating estimates. Auto dealers turn optimistic on 2H22 outlook. The state reiterates its support for the EV industry with the roll-over of purchase tax exemption. In June, two electric SUVs hit the market, and the market seems to prefer Li Auto L9 to Nio ES7. Maintain OVERWEIGHT. Top picks: BYD, GWM, Minth and Zhongsheng. Downgrade Geely from BUY to HOLD, as stock price almost hit our target.
China’s daily average PV retail sales grew 47% mom over 16-22 May 22, as OEMs have been ramping up production volume after resuming production since late-April. CPCA expects PV retail sales volume to rebound 26% mom to 1.32m units in May, albeit still 19% below that in May 21. The State Council on 23 May 22 announced Rmb60b in purchase tax reduction for PVs. Maintain OVERWEIGHT. Top picks: BYD, GWM and Geely.
Tencent reported weak 4Q21 results. Revenue grew by 7.9% yoy to Rmb144.2b, broadly in line with consensus estimates. Gross margin declined by 4ppt yoy during 4Q21 to 40.1% mainly due to continued investment in key strategic areas, in line with consensus expectation. Non-GAAP operating margin contracted by 5.5ppt yoy to 23%. Non-GAAP net margin declined 7.6ppt yoy to 17.3%, in line with street estimate. Maintain BUY with a lower target price of HK$502.00.
HUTCHISON PORT HDG.TRUST (SG), a company active in the Transportation Services industry, sees its general evaluation downgraded to Neutral on account of a double requalification. The independent financial analyst theScreener just removed a fundamental star(s) for a 2 over 4-star rating. As such, market behaviour has also deteriorated and is evaluated as moderately risky. theScreener believes that the loss of a star(s) and the increased risk justifies the general evaluation downgrade, which passe...
Until mid-2020, the stock price of Hutchison Port Holding Trust was on a downward trajectory, eroding about 90% of investors’ wealth in nine years of its listing in 2011. However, after the receipt of the Hong Kong Competition Commission’s approval for Hong Kong Seaport Alliance in 2H20, the stock witnessed a strong price reversal. From mid-2020 - to date, the stock is up whopping 147.5% vs Drewry’s equity index gain of 19.6%. On 9 February 2022, stock touched our previously estimated fair value...
The Chinese equities market remained volatile in Feb 22 as escalating geopolitical tensions and fresh regulatory scrutiny of China’s tech sector frazzled investors. Despite the setbacks, we expect the markets to continue their slow recovery, based on our expectations that peak regulatory risks have passed with most of the bad news already priced in and for more uplifting policy signals during the “Two Sessions” meeting.
The container ports and terminals sector is witnessing increased adoption of innovative technologies such as automation and digitalisation. Higher automation reduces labour costs, which in turn lowers operating leverage and can make operating profit more resilient. However, this may lead to strained relations with the trade union. Currently, terminal operators are opting for varying degrees of automation, depending on their financial and technical resources. We are optimistic about the current a...
Chinese equities could stay volatile in Sep 21 as further policy details on regulating the tech sector may still be announced. However, we see an increasing possibility of macro policy easing. Hence, we are making a measured increase in portfolio beta and add Anhui Conch, HKex, Tinci Materials, Yongda Auto and Zoomlion to the BUY list.
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
On 26 July 2021, Hutchison Port Holdings Trust (HPHT or the company) announced strong 1H21 financial results. Robust demand from the developed countries (especially the US and Europe), and a lower base of 1H20 helped the company report significantly higher volumes (+13%) and top-line (+25%) in 1H21. Consequentially, the company’s EBITDA jumped by 30% translating into a higher margin of 61.7% (vs 59.2% in 1H20). Moving forward, we expect the current positive trend to continue but the pace of grow...
Opposite moves of SOFIX 563.86 (+0.11%) fixed the main index almost unchanged. Eurohold (EUBG, BGN 2.56, +2.4%) offset the drop in Doverie (DUH, BGN 7.24, -2.16%), Albena (ALB, BGN 33.00 ,-2.37%) and First Investment Bank (FIB, BGN 1.72, -1.71%). The most traded name Advance Terrafund (ATER, BGN 2.48, unch) registered BGN 142K daily turnover but sellers found adequate demand and the REIT closed without change on Tuesday.
Despite the significant run-up in the past year (up 113%), we believe the stock of Hutchison Port Holdings Trust (HPHT or the company) still has the potential to move upwards. The company, after consolidating its position in the Hong Kong market, has sensed a long-term opportunity in China and opted to expand its operating capacity. In the past three quarters, Chinese container volumes have surged benefitting from the robust demand recovery (especially from the developed world). We believe this ...
The US automobile market and European EV market are recovering strongly, which bodes well for the earnings of Chinese automobile parts suppliers like Nexteer, FYG, Minth and CATL. Among them, Nexteer has the highest exposure to the US and European markets, and its revenue will be increasingly driven by EV-related steering products. CATL is set to tap the burgeoning European EV market. Maintain MARKET WEIGHT. Top picks: Nexteer and CATL.
South-bound capital flow from newly-raised funds pushed consumption market leader stocks to higher valuations in the second half of January. While share prices in the last week have seen some volatility, given reduction in liquidity on part of PBOC to reduce bubble concerns, we still expect consumer stocks to remain a core sector holding and thus outperform in the medium run. Maintain OVERWEIGHT.
TNH will acquire a 49% stake in property management company Chengdu Holytech Property at a consideration of ~Rmb296.6m, and at around 14x 2019 PE, which is in line with recent M&As in the market. We are positive on the news as the acquisition is aligned with management’s strategy of expanding outside the GBA and the scope of TNH’s services. Management remains confident on achieving its current earnings guidance of >80% growth. Maintain BUY with a lower target price of HK$11.77.
17 Education is a leading online tuition provider in China. The company was founded by former regional head of New Oriental Education and launched book building to raise up to USD 315m to list in the US. In our previous note we discussed that 17 Education has a unique business model whereby it provides a free in-school solution to teachers, students and parents and upsells after-school paid tuition. On one hand, it has a large pool of verified students to upsell its paid after-school tuition. O...
17 Education is a leading online tuition provider in China. The company was founded by former regional head of New Oriental Education and is looking to raise up to USD 300m via a listing in the US. 17 Education has a unique business model whereby it provides a free in-school solution to teachers, students and parents and upsells after-school paid tuition. On one hand it has a large pool of verified students to upsell its paid after-school tuition. On the other hand its conversion and market sha...
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