2Q24 revenue growth was lukewarm, hampered by a subdued macro backdrop, but most earnings beats were delivered by internet companies. We expect consumers to continue switching to service- and experience-oriented, which will benefit OTA, local life services and online games amid the summer holiday period. Key catalysts in 2H24 that will drive internet companies’ valuation repair include shareholder returns, cross-border expansion, easing competition and more, in our view. Maintain MARKET WEIGHT.
GREATER CHINA Economics Inflation Deflationary pressures rising. Sector Construction Building on the positive development of macroeconomic policies in 2H24-2025. Internet 2Q24 results wrap-up: Overall earnings beat; 2H24 outlook remains promising. INDONESIA Small...
GREATER CHINA Strategy Alpha Picks: September Conviction Calls: We expect an improving operating performance among selected companies in September, and add AIA, COLI, Desay SV, Galaxy Entertainment, Meituan, Ping An and TUL to our BUY list and add Li Auto as a SELL. INDONESIA Strategy Alpha Picks: Trailing The JCI’s Strong Performance In Aug 24: Our picks are ICBP, TOWR, BBNI, BMRI, BBRI, EXCL, CTRA, BBTN, CMRY, SIDO and JSMR. MALAYSIA Strategy Alpha Picks: Adapting To A Bipolar Market: Our Al...
The MSCI China rose 0.8% in August, trailing the HSI’s 3.7%, as the former was weighed by the weaker performance of utilities, materials and consumer staples. Looking ahead, we opine that the Fed rate cut in Sep 24 should be priced in and we do not expect ratesensitive sectors to outperform. We are adding AIA, COLI, Desay SV, Galaxy Entertainment, Meituan, Ping An and The United Laboratories to our BUY list. We remain cautious on the EV sector, adding Li Auto to our SELL list.
TCOM delivered a strong 2Q24 earnings beat. 2Q24 net revenue rose 13.5% yoy to Rmb12.8b and was 47% above 2019 levels, in line with consensus estimates. Non-GAAP net profit was Rmb5b, with net margin expanding 8.5ppt yoy to 39%, beating our and consensus estimates. TCOM guided for 3Q24 revenue growth of 11-16% yoy to Rmb15.3b-16b, in line with consensus estimates. Maintain BUY with a lower target price of HK$534.00 (US$68.00).
KEY HIGHLIGHTS Results Anta Sports (2020 HK/BUY/HK$71.65/Target: HK$109.60) 1H24 core net profit rose 17% yoy. Management keeps its retail sales target for the Anta brand in the teens, but has slightly lowered the target for Fila to a high single digit due to the weak performance of Fila Fusion and Fila Kids. However, management is maintaining operating margin targets for both Anta brand and Fila. Descente and KOLON are expected to continue delivering rapid growth in the next two years. On s...
GREATER CHINA Results Anta (2020 HK/BUY/HK$71.65/Target: HK$109.60) 1H24: Results beat. Fila's guidance slightly lowered; new brands performed well. China Overseas Property Holdings (2669 HK/BUY/HK$4.63/Target: HK$7.20) 1H24: Results meet expectations; higher dividend payout ratio. Hansoh Pharmaceutical Group Company (3692 HK/BUY/HK$18.22/Target: HK$27.00) 2Q24: Margins deteriorate; automation demand outlook remains sluggish. Shenzhen Inovance (300124 CH/BU...
What’s new: Trip.com’s reported 2Q24 revs that were in-line with consensus but below our expectations. Travel demand remains resilient where total rev growth could be similar (or potentially better) in 3Q than 2Q. We maintain our PT at USD65. Analysts: Jin Yoon
In our base case, we expect the MSCI China index to range trade for the rest of 2024 due to uncertainties over the duration of economic adjustment. Upside risk comes from the start of the Fed’s easing cycle as it opens the way for further monetary easing in China. But this should be complemented by demand-side policies for greater impact. In the meantime, we have a barbell strategy, preferring TMT, tech hardware and defensives like banks, communication services and utilities. Pricing in slowe...
GREATER CHINA Strategy Alpha Picks: August Conviction Calls: We expect stimulus to be announced in August and add COSCO Shipping Ports, Haier Smart Home, and KE Holdings to our BUY list and add SELL call on WuXi Bio, and XPeng. INDONESIA Strategy Alpha Picks: Underperformance in Jul 24: Our picks are BBNI, BMRI, BBRI, EXCL, CTRA, BBTN, CMRY, SIDO and JSMR. MALAYSIA Strategy Alpha Picks: Raising The M&A And Monetisation Bets: Our Alpha Picks marginally beat the KLCI. Jul 24 picks: Ekovest, Gamu...
Chinese equities fell more than 2% in July, losing initial gains after the Third Plenum did not lead to new stimulus policies. For August, 1H24 results would be the catalyst for most stocks, and we expect earnings of EV names to be under pressure given the intense price competition. We add Cosco Shipping Ports, Haier Smart Home, and KE Holdings to our BUY list and SELL on WuXi Bio and XPeng to diversify away our market risk exposure.
GREATER CHINA Strategy Alpha Picks: August Conviction Calls We expect stimulus to be announced in August and add COSCO Shipping Ports, Haier Smart Home, and KE Holdings to our BUY list and add SELL call on WuXi Bio, and XPeng. Small-Mid Cap Monthly Reiterate BUY on Crystal amid share price pullback; eyes on interim dividend surprise. Sector Automobile ...
The HSI and MSCI China fell 2.0% and 2.8% mom respectively in June, as investors locked in profits amid weaker-than-expected macro data. A continuation of the rally that began in January hinges on the policy announcements from the Third Plenum. Looking ahead, we remain sellers of BYD due to intense competition in the EV segment and are adding ASMPT, Innovent, Poly Property Services, TAL Education and Trip.com.
GREATER CHINA Strategy Alpha Picks: July Conviction Call: Adding ASMPT, Innovent, Poly Property Services, TAL Education and Trip.com to our BUY list; hedging with SELL call on BYD. INDONESIA Strategy Alpha Picks: Outperformance In Jun 24 And 2Q24: Our picks are BMRI, BBRI, EXCL, BSDE, TLKM, ACES, BBTN, CMRY, SIDO and JSMR. MALAYSIA Strategy Alpha Picks: Opting For More Adventurous Choices: Our Alpha Picks beat the KLCI again. Jul 24 picks: BURSA, Ekovest, Gamuda, Lagenda, Mah Sing, MYEG, Pekat...
GREATER CHINA Strategy Alpha Picks: July Conviction Call Adding ASMPT, Innovent, Poly Property Services, TAL Education and Trip.com to our BUY list; hedging with SELL call on BYD. Small/Mid Cap Highlights Crystal International (2232 HK/BUY/HK$3.95/Target: HK$4.76) 1Q24 preview: Expecting interim DPS to more than double. INDONESIA Strategy Alpha Picks: Outperformance In Jun 24 And 2Q24 Our picks are BMRI, BBRI, EXCL, BSDE, TLKM, ACES, BBTN, CMRY, SIDO and JSM...
We expect travel enthusiasm to be fuelled by various catalysts moving into 2H24, such as: a) continuous robust overseas travel demand boosted by the upcoming summer holidays, Euro 2024 and Paris Olympics; b) the implementation of visa-free policies that will unlock demand for both inbound and bound travel; and c) travel consumption upgrade. We expect the travel growth to soften slightly in 2Q/3Q24 and reaccelerate in 4Q24 due to the base effect. Maintain MARKET WEIGHT.
We believe efforts in user-focused and overseas expansion strategies will continue to help e-commerce companies regain GMV growth momentum and potentially improve take rates. We expect consumption behaviour to become service- and experienceoriented, which will benefit OTA players. With increasing shareholder returns and the recent ADR convertible issuance, the market will continue to focus on stock yields, companies’ cash positions and domestic regulations. Maintain MARKET WEIGHT.
GREATER CHINA Sector Automobile Weekly: EV sales pull back last week. Maintain MARKET WEIGHT. Top BUYs: Geely, CATL, Tuopu and Joyson Electronics. Top SELLs: XPeng. Internet Strategic revamp to foster re-accelerating growth and shareholders’ return. INDONESIA Update Bank Tabungan Negara (BBTN IJ/BUY/Rp1,240/Target: Rp1,700) ...
GREATER CHINA Strategy Market Strategy 2H24: Building blocks in place. Results Meituan (3690 HK/BUY/HK$112.70/Target: HK$130.00) 1Q24: Earnings beat. ISHT margin to stabilise in 2Q24; upgrade To BUY. INDONESIA Results Merdeka Copper Gold (MDKA IJ/HOLD/Rp2,460/Target: Rp2,500) 1Q24: EBITDA below expectations with potential improvement ahead. MALAYSIA Sector Gaming ...
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