Greater China Equity Long/Short Analyst

Eric Chen

Equity Bottom-Up

Hainan Meilan International Airport / Equity Bottom-Up

<ul>
<li>1H23 results missed our expectation because stronger-than-expected revenue was outweighed by surge in operating costs as company took from its parent the overall operation of Phase I and II.</li>
<li>We expect slow recovery in duty-free sales and elevated cost base will continue pressuring its bottom line in 2H23 and see possibility to return to profitability by 1H24.</li>
<li>While recent share price correction has priced in the weak outlook somehow, we can’t rule out further volatility post results. We are now neutral on the stock.</li>
</ul>


1H23 results missed our expectation because stronger-than-expected revenue was outweighed by surge in operating costs as company took from its parent the overall operation of Phase I and II.
We expect slow recovery in duty-free sales and elevated cost base will continue pressuring its bottom line in 2H23 and see possibility to return to profitability by 1H24.
While recent share price correction has priced in the weak outlook somehow, we can’t rule out further volatility post results. We are now neutral on the stock.


Meilan Airport (357 HK): Not Out of the Woods Yet

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 115.0% as of Jul 28th.</li>
<li>The average A-H premium changed by 0.8ppt week on week, led by information technology, communication services, energy and offset by health care, consumer staples.</li>
<li>We highlight weekly changes in A-H premium for China Vanke, CITIC Sec, China Pacific, BYD, CMOC, GF Sec, CICC.</li>
</ul>


We analyse the changes of A-H premium on 143 stocks over the last week. The average A-H premium was 115.0% as of Jul 28th.
The average A-H premium changed by 0.8ppt week on week, led by information technology, communication services, energy and offset by health care, consumer staples.
We highlight weekly changes in A-H premium for China Vanke, CITIC Sec, China Pacific, BYD, CMOC, GF Sec, CICC.


A-H Premium Weekly (Jul 28th): China Vanke, CITIC Sec, China Pacific, BYD, CMOC, GF Sec, CICC

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 21st.</li>
<li>We estimate the weekly outflows to be US$1,012.2 million, led by information technology, financials, and offset by consumer discretionary, communication services, real estate.</li>
<li>We highlight flows for ZTE, Moutai, Zhongji Innolight, Longi Green, CATL.</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 21st.
We estimate the weekly outflows to be US$1,012.2 million, led by information technology, financials, and offset by consumer discretionary, communication services, real estate.
We highlight flows for ZTE, Moutai, Zhongji Innolight, Longi Green, CATL.


Northbound Flows (Jul 21st): ZTE, Moutai, Zhongji Innolight, Longi Green, CATL

<ul>
<li>We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 14th.</li>
<li>We estimate the weekly inflows to be US$2,869.4 million, led by consumer discretionary, consumer staples, financials sectors.</li>
<li>We highlight flows for Moutai, CATL, Wuliangye, China Yangtze Power, China Telecom, Inspur Electronic Information Industry, Tcl Technology, China Mobile, BYD, Haitian Flavouring, Wus Printed Circuit (Kunshan).</li>
</ul>


We analyze the weekly Shanghai/Shenzhen northbound Connect flows with our data engine for holding position as of July 14th.
We estimate the weekly inflows to be US$2,869.4 million, led by consumer discretionary, consumer staples, financials sectors.
We highlight flows for Moutai, CATL, Wuliangye, China Yangtze Power, China Telecom, Inspur Electronic Information Industry, Tcl Technology, China Mobile, BYD, Haitian Flavouring, Wus Printed Circuit (Kunshan).


Northbound Flows (Jul 14th): Moutai, CATL, Wuliangye, Yangtze Power, China Telecom, Haitian

China Tourism Group Duty Free Corp Ltd / Equity Bottom-Up

<ul>
<li>CDF’s 1H23 preliminary results suggest that business recovery remains on track. Voices of bottom-fishing are getting louder as free fall in its share price already erased 50% market cap YTD.</li>
<li>We believe the dynamics have fundamentally changed compared to three years ago when CDF was the stock market darling. Investors need be aware of the anchoring effect in making decisions.</li>
<li>Moderate growth, pressured margin and contracted valuation multiple will be the new reality facing investors of the stock in our view. Wait for better entry point.</li>
</ul>


CDF’s 1H23 preliminary results suggest that business recovery remains on track. Voices of bottom-fishing are getting louder as free fall in its share price already erased 50% market cap YTD.
We believe the dynamics have fundamentally changed compared to three years ago when CDF was the stock market darling. Investors need be aware of the anchoring effect in making decisions.
Moderate growth, pressured margin and contracted valuation multiple will be the new reality facing investors of the stock in our view. Wait for better entry point.


China Tourism Duty Free Corp (601888. CH): Is Now Good Time for Bottom-Fishing?

China

China Tourism Group Duty Free Corporation Limited engages in sales of duty free goods and tax goods. The Company sells tobacco, wine and spirits, perfume, cosmetics, fashion and accessories, watches, jewelry, food, luggage products,and other products. China Tourism Group Duty Free also engages in investment and development of tourism destination commercial complexes.

China Tourism Group Duty Free Corp Ltd (601888 CH)

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China Tourism Group Duty Free Corp Ltd (601888 CH)

Meilan Airport (357 HK): Not Out of the Woods Yet

1H23 results suggests slow recovery in duty free sales and elevated cost base will continue pressuring its bottom line and profitability probably...

Eric Chen

A-H Premium Weekly (Jul 28th): China Vanke, CITIC Sec, China Pacific, BYD, CMOC, GF Sec, CICC

We analyzed A-H premium changes in the past week and highlight A-H premium changes for China Vanke, CITIC Sec, China Pacific, BYD, CMOC, GF Sec, CICC.

Ke Yan, CFA, FRM

Northbound Flows (Jul 21st): ZTE, Moutai, Zhongji Innolight, Longi Green, CATL

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for ZTE, Moutai, Zhongji Innolight, Longi Green, CATL.

Ke Yan, CFA, FRM

Northbound Flows (Jul 14th): Moutai, CATL, Wuliangye, Yangtze Power, China Telecom, Haitian

We analyzed northbound Shanghai/Shenzhen connect flows in the past week and highlight flows for Moutai, CATL, Wuliangye, China Yangtze Power, China...

Ke Yan, CFA, FRM

China Tourism Duty Free Corp (601888. CH): Is Now Good Time for Bottom-Fishing?

Moderate growth, pressured margin and contracted valuation multiple will be the new reality facing investors of the stock in our view. Wait for...

Eric Chen

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)