GREATER CHINA Strategy Alpha Picks: May Conviction Call: Adding CR Beer, Crystal, Geely, Haier, Kuaishou, Ningbo Tuopu, Pinduoduo, Shenzhou, and Tencent to our BUY list, closing out SELL calls. INDONESIA Strategy Alpha Picks: Slight Outperformance In A Bear Market: Our picks are BSDE, TLKM, ACES, BBTN, CMRY, SIDO, JSMR and AKRA. MALAYSIA Strategy Alpha Picks: Well-Positioned For 1Q Results Season: Our April picks again beat the KLCI. May 24 picks: GENM, Inari, Mah Sing, MrDIY, MYEG, Press Meta...
GREATER CHINA Results China Longyuan Power (916 HK/BUY/HK$5.72/Target: HK$6.40): 1Q24: Below expectations; low wind speed weighed on performance. COSCO SHIPPING Ports (1199 HK/BUY/HK$4.62/Target: HK$6.75): 1Q24: Results in line; steady performance in a seasonally slow quarter with headwinds. Dian Diagnostics (300244 CH/BUY/Rmb14.13/Target: Rmb18.50): 1Q24: ICL revenue growth satisfactory; esoteric testing and self-developed product segments remain 2024’s key growth drivers. Foshan Haitian Flavou...
Given the stabilising revenue growth and abundant cash on hand, mega-cap internet companies have been focusing on offering generous shareholder returns. For 2024, we expect consumption behaviour to switch to service and experience, which will continue to benefit OTA players. We believe other China internet names will outperform with overseas expansion and SFV players will continue to gain market shares with potential for take rate increases. Maintain MARKET WEIGHT.
GREATER CHINA Strategy Alpha Picks: April Conviction Calls: Adding AIA, Midea, Hansoh Pharmaceutical, Shenzhen Inovance and Trip.com to our BUY list, with SELL calls on BYD, EVE Energy, and Li Auto. INDONESIA Strategy Alpha Picks: Outperformance In Mar 24 and 1Q24: Our picks are ACES, BBTN, CMRY, SIDO, EXCL, MAPI, JSMR, CTRA, and AKRA. MALAYSIA Strategy Alpha Picks: Expanding The Variety Of Events Bets: Our Alpha Picks trounced the KLCI in Mar 24. Apr 24 picks: GENM, Inari, Mah Sing, MrDIY, MY...
What’s new: PDD’s reported 4Q23 results beat consensus and our expectations driven by improving consumer sentiment. PDD could continue to gain share in both domestic and overseas markets as the company remains focused on executing its high-quality development strategy in 2024. We maintain our PT at USD170. Analysts: Jin Yoon
PDD’s 4Q23 results beat expectations. Revenue surged 124% yoy to Rmb88.9b, 11% above consensus estimate, driven by strong advertising revenue growth and robust commission revenue generated from Temu. Gross margin contracted 17ppt yoy to 61%, due to higher cost from Temu. Non-GAAP net profit came in at Rmb25.5b, 51% above consensus estimate which translated to a non-GAAP net margin of 28.7%. Maintain BUY with a higher target price of US$183.00.
GREATER CHINA Results Geely Auto (175 HK/BUY/HK$8.83/Target: HK$11.00): 2023: Results beat on margins again; upgrade to BUY. Raise target price from HK$6.50 to HK$11.00. Innovent Biologics (1801 HK/BUY/HK$39.35/Target: HK$60.00): 2023: Results beat; well positioned for sustainable growth in 2024. Kuaishou (1024 HK/BUY/HK$52.25/Target: HK$85.00): 4Q23: Resilient earnings beat; strong ad monetisation momentum continues. Li Ning (2331 HK/HOLD/HK$21.45/Target: HK$19.60): 2023: Results miss; remain c...
Temu achieved strong user engagement growth after sponsoring the Super Bowl in the US in February. We lift our global 2024 GMV forecast for Temu to US$38b from US$34b previously in view of the strong sales growth in Jan-Feb 24 boosted by the Super Bowl. We expect the launch of the new semi-entrusted model in March to further contribute to GMV growth in 2024. To defend against the potential US policy risks, Temu is expected to pivot its focus on Europe, Latin America, and the Middle East.
GREATER CHINA Strategy Alpha Picks: March Conviction Call: Adding CMB, COLI, CR Beer, Kuaishou and TUL to our BUY list, closing out SELL calls. INDONESIA Strategy Alpha Picks: Significant Outperformance In Feb 24: Our picks are BBTN, CMRY, SIDO, EXCL, MAPI, JSMR, CTRA, MYOR and AKRA. MALAYSIA Strategy Alpha Picks: Focusing On Earnings Momentum: Our Alpha Picks underperformed the KLCI in Feb 24 (-0.9% vs 2.5%). Mar 24 picks significantly feature companies with good earnings momentum. SINGAPORE...
GREATER CHINA Strategy Alpha Picks: February Conviction Calls: We remain hedged, adding COSCO Shipping Holdings and Foxconn Industrial Internet to our BUY list, but include additional SELL calls on Li Auto and Xpeng. INDONESIA Strategy Alpha Picks: Outperformance in Jan 24: Our picks are EXCL, MAPI, BMRI, JSMR, BBNI, CTRA, MYOR and AKRA. MALAYSIA Strategy Alpha Picks: Eyes Also On Results Season Winners: Our Alpha Picks performance again trounced the KLCI in Jan 24 (+9.6% vs +4.0%). Feb 24 pic...
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.
GREATER CHINA Strategy Alpha Picks: January Conviction Calls: We add the potential beneficiaries of the upcoming CNY festival − Galaxy Entertainment and Trip.com − to our BUY list, but include SELL calls on BYD and Geely due to the subsidy reduction. INDONESIA Strategy Alpha Picks: Underperformance in 4Q23 and 2023: Our picks are MAPI, BMRI, JSMR, TLKM, BBNI, CTRA, MYOR and AKRA. MALAYSIA Strategy Alpha Picks: Domestic Event Winners: Our Alpha Picks outperformed the KLCI in Dec 23. Jan 24 pick...
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.
GREATER CHINA Strategy Alpha Picks: December Conviction Calls: We add a mix of turnaround stocks and beneficiaries of policy support to our BUY list − CSPC, HKEX, Lenovo, Longfor, Pinduoduo and Sunny Optical. INDONESIA Strategy Alpha Picks: Underperformance With A 3.7% Return: Our picks are GOTO, BMRI, JSMR, TLKM, BBNI, NCKL, CTRA, MYOR and AKRA. MALAYSIA Strategy Alpha Picks: Still Focusing On Domestic Winners: Our Alpha Picks trounced the FBMKLCI in Nov 23, mostly thanks to Hume’s run-up. De...
The Chinese economy will see a gradual climb higher in 2024, hitting 4% yoy growth, with private consumption providing much of the heavy lifting. Policy easing will be incremental, focusing on the real estate sector and local government financing. Until these issues are resolved, PE expansion will be limited. Thus, EPS growth will be the key driver, with an index target of 67.3pt. Our focus is on smart consumption, premiumisation and turnaround stocks, staying negative on the auto sector.
The Chinese economy will see a gradual climb higher in 2024, hitting 4% yoy growth, with private consumption providing much of the heavy lifting. Policy easing will be incremental, focusing on the real estate sector and local government financing. Until these issues are resolved, PE expansion will be limited. Thus, EPS growth will be the key driver and our index target is at 67.3pt. Our focus is on smart consumption, premiumisation and turnaround stocks. Staying the course. The Central Financ...
MSCI China rose only 2.3% mom in November while the HSI shed 0.4% mom over the same period, despite positive newsflow for the real estate sector. Investors preferred to sell into strength, as concerns over China’s slow economic growth remain. Looking ahead, the mid-Dec 23 Economic Work Conference may provide positive surprises and with MSCI China trading at 12-month forward PE of 9.3x, risk is skewed to the upside. We add CSPC, HKEX, Lenovo, Longfor, Pinduoduo and Sunny Optical to our BUY list.
With swift progress in GMV growth and market expansion, PDD is ramping up its efforts to develop Temu’s supply chain network. Nevertheless, its rapid expansion has also caused increasing concerns, mainly on Temu’s profitability and political risks that may potentially arise. Given Temu’s impressive performance in 3Q23, we have included Temu’s contribution in PDD’s valuation and conducted a scenario analysis of Temu’s impact on PDD’s valuation. Maintain BUY with a higher target price of US$173.00...
KEY HIGHLIGHTS Economics PMI A mixed bag despite negative headlines. Sector Automobile Weekly: EV sales fell and inventories piled up during 20-26 Nov 23. Maintain UNDERWEIGHT. Top SELLs: BYD and Ganfeng Lithium. Results CSPC Pharmaceutical Group (1093 HK/BUY/HK$7.05/Target: HK$9.20) 9M23: Results in line; new products to support double-digit revenue growth in 2024. Update PDD Holdings (PDD US/BUY/US$141.73/Target: US$173.00) Poised for a new cycle of revitalised growth propelled by Temu. T...
What's new: PDD’s reported 3Q23 results beat consensus and our expectations driven by improving consumer sentiment and encouraging results from its high-quality development strategy. PDD could continue to invest to stimulate the demand recovery. We up our PT from USD120 to USD170 on continued share gains in both domestic and international markets. Our revised PT of USD170 implies 4.2x FY24 EV/Revs. We maintain our BUY rating. Analysts: Jin Yoon
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