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...
HKEX reported 1Q24 earnings of HK$2.97b, 6.7% ahead of our expectations. The strong earnings beat was due to better external portfolio gains, higher LME trading fees and lower D&A expenses, partly offset by higher opex. We are now more optimistic about the bourse operator’s earnings outlook on an encouraging headline ADT recovery and resilient NII in a longer-than-expected high-rate environment. Upgrade to BUY with a higher target price of HK$285.00.
KEY HIGHLIGHTS Sector Automobile China’s PEV sales grew 9% yoy and 12% wow during the week of 15-21 Apr 24, implying a 44.9% market share. BYD, Zeekr and XPeng saw sales rebound during the week, in line with expectations; Aion, Li Auto and Tesla posted lower sales, below expectations. Tesla posted disappointing 1Q24 results on a sales drop, and cut prices of Model Y/3 by 5-6%. Li Auto also cut prices by 5-7%, intensifying the price war. Maintain UNDERWEIGHT. Top SELLs: BYD, Li Auto and XPeng. ...
GREATER CHINA Sector Automobile Weekly: EV sales rebound for two weeks in a row, but price war intensifies. Maintain UNDERWEIGHT. Top SELLs: BYD, Li Auto and XPeng. Top BUYs: CATL and Yadea. Results ASMPT (522 HK/BUY/HK$102.30/Target: HK$120.00) 1Q24: Solid results, more positive updates to advanced packaging business. EVE Energy (300014 HK/SELL/ Rmb34.27/Target: Rmb20.00) ...
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...
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...
HKEX’s 4Q23 results were largely within our expectation if we exclude the one-off HK$246m valuation loss on an unlisted equity investment. Adjusted revenue and net profit tumbled 1.9%/4.6% yoy due to subdued cash and derivative trading, partly offset by higher commodity ADV and robust NII. EBITDA margin was squeezed by 5.7ppt yoy on higher operating expenses. Maintain HOLD with a higher target price of HK$262.00, implying 2024F PE of 28.8x.
GREATER CHINA Sector Automobile: Weekly: PEV market share rebounds; price war heats up. Maintain UNDERWEIGHT. Top SELLs: XPeng. Top BUY: CATL, Tuopu and Desay SV. Results Budweiser APAC (1876 HK/BUY/HK$12.68/Target: HK$19.50): 2023: Results miss; mixed signals from the results. Hong Kong Exchanges and Clearing (388 HK/HOLD/HK$242.80/Target: HK$262.00): 4Q23: Passable results. Maintain HOLD. NetEase (9999 HK/BUY/HK$176.20/Target: HK$202.00): 4Q23: Earnings miss; upcoming blockbusters in 2024. New...
KEY HIGHLIGHTS Sector Automobile Weekly: PEV market share rebounds; price war heats up. Maintain UNDERWEIGHT. Top SELLs: XPeng. Top BUY: CATL, Tuopu and Desay SV. Results Budweiser APAC (1876 HK/BUY/HK$12.68/Target: HK$19.50) 2023: Results miss; mixed signals from the results. Hong Kong Exchanges and Clearing (388 HK/HOLD/HK$242.80/Target: HK$262.00) 4Q23: Passable results. Maintain HOLD. NetEase (9999 HK/BUY/HK$176.20/Target: HK$202.00) 4Q23: Earnings miss; upcoming blockbusters in 2024...
GREATER CHINA Update Hong Kong Exchanges and Clearing (388 HK/HOLD/HK$243.60/Target: HK$260.00): Risk-off mode continues. INDONESIA Results Bank Tabungan Negara (BBTN IJ/BUY/Rp1,345/Target: Rp1,700): 4Q23: Net profit up 41% qoq on strong non-interest income and lower CoC. MALAYSIA Results Malaysia Marine and Heavy Engineering Holdings (MMHE MK/BUY/RM0.48/Target: RM0.60): 2023: Performance missed expectations on absence of cost provision/tax recoveries. We still see value in MMHE, as market c...
KEY HIGHLIGHTS Update Hong Kong Exchanges and Clearing (388 HK/HOLD/HK$243.60/Target: HK$260.00): Risk-off mode continues. TRADERS’ CORNER Wynn Macau, Limited (1128 HK): Trading Buy range: HK$6.92-7.07 BOC Hong Kong (Holdings) Limited (2388 HK): Trading Buy range: HK$18.90-19.10
HKEX released its market operational data for Jan 24. Headline ADT dipped marginally mom, but derivative trading remained active with 12.4% mom ADV growth due to a rise in hedging activities against the market downturn. Looking ahead, we opine a new ADT upcycle and more sustained market valuation re-rating are unlikely in the near term due to poor market sentiment. Maintain HOLD with a lower target price of HK$260.00 to reflect earnings revisions and a higher discount rate.
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...
We expect HKEX to report a marginal net profit dip in 4Q23 due to sluggish core revenue, compensated by robust NII. However, a disappointing ADT recovery and peaking NII have cast uncertainties on the bourse’s 2024 earnings, prompting us to downgrade HKEX to HOLD with a target price of HK$300.00. We think HKEX's current valuation of -1.0SD is relatively fair given the market's current cautious sentiment due to China's slowing economy and looming political uncertainties.
KEY HIGHLIGHTS Update Anta Sports (2020 HK/BUY/HK$70.15/Target: HK$109.60) 2023 sales met expectations; expect Amer spin-off and separate listing to happen before Mar 24. Hong Kong Exchanges and Clearing (388 HK/HOLD/HK$255.80/Target: HK$300.00) 4Q23 results preview: Limited earnings growth ahead; downgrade to HOLD. HSI AND HS TECH INDEX OUTLOOK
GREATER CHINA Update Anta Sports (2020 HK/BUY/HK$70.15/Target: HK$109.60): 2023 sales met expectations; expect Amer spin-off and separate listing to happen before Mar 24. Hong Kong Exchanges and Clearing (388 HK/HOLD/HK$255.80/Target: HK$300.00): 4Q23 results preview: Limited earnings growth ahead; downgrade to HOLD. INDONESIA Sector Automobile: Nov 23 car unit sales decline for the fifth consecutive month. Maintain MARKET WEIGHT. MALAYSIA Strategy Breaking Away From The January Jinx: Malaysia...
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...
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...
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.
October headline ADT plunged 12.7% mom to HK$78.8b mainly due to weak investor sentiment as concerns over the economic recovery momentum persisted. Although November ADT rebounded 14.4% after the levy cut announcement, it still remains below the HK$100b level. Nonetheless, we still expect the potential year-end rally and earlier rate cut bets to contribute to improved ADT and stock price performance. Maintain BUY. Target price: HK$370.00.
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