Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Tracking Traffic

Focusing on Asian logistics, transportation, and travel companies

Equity Bottom-Up

<ul>
<li>As in Q424, a sharp increase in OpEx led to margin compression at Trip.com in Q125</li>
<li>Trip.com's revenue growth in Q125 slowed vs Q424, but platform probably gained share</li>
<li>Within China's tourism segment, we still think the airlines can outperform Trip.com</li>
</ul>


As in Q424, a sharp increase in OpEx led to margin compression at Trip.com in Q125
Trip.com's revenue growth in Q125 slowed vs Q424, but platform probably gained share
Within China's tourism segment, we still think the airlines can outperform Trip.com


Trip.com Q125 Results | Rising Expenses Led to Margin Compression, Again | Still Prefer Airlines

<ul>
<li>March demand growth improved vs weak February, but Q125 showed clear slowdown vs trend</li>
<li>Relatively strong demand growth for outbound travel is no longer lifting airline load factors</li>
<li>Near-Term, we no longer view Chinese travel as attractive, as stocks appear to lack catalysts</li>
</ul>


March demand growth improved vs weak February, but Q125 showed clear slowdown vs trend
Relatively strong demand growth for outbound travel is no longer lifting airline load factors
Near-Term, we no longer view Chinese travel as attractive, as stocks appear to lack catalysts


Monthly Chinese Tourism Tracker | March and Q125 Demand Growth Weak Vs Trend (April 2025)

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In a rare move, <a href="https://www.smartkarma.com/entities/jardine-matheson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:19718:1" rel="noopener">Jardine Matheson (JM SP)</a>-controlled <a href="https://www.smartkarma.com/entities/hongkong-land-holdings-ltd" target="_blank" data-smartkarma-citation="entities:15465:1" rel="noopener">Hongkong Land (HKL SP)</a> has <a href="https://links.sgx.com/FileOpen/HKLH0424%20SGX.ashx?App=Announcement&amp;FileID=842372" target="_blank" rel="noopener">sold</a> nine floors (147,025 square feet) of One Exchange Square to <a href="https://www.smartkarma.com/entities/hong-kong-exchanges-clearing" target="_blank" data-smartkarma-citation="entities:490:1" rel="noopener">HKEX (388 HK)</a> for HK$6.3bn (US$810mn).</li>
<li>HKL plans to use the proceeds to provide enhancements to the property sold,  the reduction of net debt; and for a share buyback. Shares are up 9% as I type. </li>
<li>HKL is focussed on divesting US$4bn to US$6bn of its balance sheet assets in the next three years. HKL's CEO Michael Smith: "Recycling capital is our top priority right now".</li>
</ul>


In a rare move, Jardine Matheson (JM SP)-controlled Hongkong Land (HKL SP) has sold nine floors (147,025 square feet) of One Exchange Square to HKEX (388 HK) for HK$6.3bn (US$810mn).
HKL plans to use the proceeds to provide enhancements to the property sold,  the reduction of net debt; and for a share buyback. Shares are up 9% as I type. 
HKL is focussed on divesting US$4bn to US$6bn of its balance sheet assets in the next three years. HKL's CEO Michael Smith: "Recycling capital is our top priority right now".


Hongkong Land (HKL SP) Recycles Nine Floors Of One Exchange Square

<ul>
<li>Combined January-February activity indicates demand growth continues to slow down</li>
<li>Similarly, capacity restoration &amp; load factors on outbound flights appear to have stagnated </li>
<li>We expect shares of Chinese airlines to continue to outperform travel platform Trip.com</li>
</ul>


Combined January-February activity indicates demand growth continues to slow down
Similarly, capacity restoration &amp; load factors on outbound flights appear to have stagnated 
We expect shares of Chinese airlines to continue to outperform travel platform Trip.com


Monthly Chinese Tourism Tracker | Growth of Travel Demand Slowed in January-February (March 2025)

<ul>
<li>To avoid a political landmine, on the 4th March <a href="https://www.smartkarma.com/entities/ck-hutchison-holdings-ltd" target="_blank" data-smartkarma-citation="entities:132:1" rel="noopener">CK Hutchison Holdings (1 HK)</a>  <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2025/0304/2025030402128.pdf" target="_blank" rel="noopener">announced</a> a deal with Blackrock to offload its entire port ops, including the contentious Panama ports.</li>
<li>It's an astute deal selling to a buyer, ostensibly backed by the Trump administration, at the top of the market, knowing global trade could fall under a new tariff regime.</li>
<li>The risk to the transaction is one of timing. US/Panama approvals are a shoo-in. But it's a complex deal, which will take time to work through the system.</li>
</ul>


To avoid a political landmine, on the 4th March CK Hutchison Holdings (1 HK)  announced a deal with Blackrock to offload its entire port ops, including the contentious Panama ports.
It's an astute deal selling to a buyer, ostensibly backed by the Trump administration, at the top of the market, knowing global trade could fall under a new tariff regime.
The risk to the transaction is one of timing. US/Panama approvals are a shoo-in. But it's a complex deal, which will take time to work through the system.


Singapore

Mandarin Oriental International Limited is an owner and operator of luxury hotels, resorts, and residences. The Group now operates, or has under development, hotels in the Americas, Europe, Middle East, and North Africa. Mandarin Oriental International also operates, or has under development, residences at Mandarin Oriental.

Mandarin Oriental International (MAND SP)

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Mandarin Oriental International (MAND SP)

Trip.com Q125 Results | Rising Expenses Led to Margin Compression, Again | Still Prefer Airlines

China's leading travel platform Trip.com reported an unimpressive set of results earlier this week, as a sharp rise in OpEx led to margin compression.

Tracking Traffic

Monthly Chinese Tourism Tracker | March and Q125 Demand Growth Weak Vs Trend (April 2025)

Data from China's leading airlines and some popular regional destinations show a clear slowing of travel demand growth in March and Q125. For now,...

Tracking Traffic

Hongkong Land (HKL SP) Recycles Nine Floors Of One Exchange Square

More upside to come. This is one of the few bright spots in the Hong Kong commercial/office property space. Even after today's move, HKL is trading...

David Blennerhassett

Monthly Chinese Tourism Tracker | Growth of Travel Demand Slowed in January-February (March 2025)

The growth of Chinese travel demand appeared to slow in the first two months of 2025. We believe the Chinese airlines can continue to outperform...

Tracking Traffic

CK Hutch (1 HK): Still Trading Cheap

It's an astute deal selling to a buyer eager to please Trump at the top of the market, knowing that global trade could fall under a new tariff...

David Blennerhassett

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