Asia Pac ECM and Index Rebal, Shenton Research

Ke Yan, CFA, FRM

Asia Pac ECM and Index Rebal

Asia Pac IPO & Placement Research, China Biotech

Shenton Research

Shenton Research is an independent Asia Pacific equity specialist. Our quantitative research covers index rebalancing flows, alongside exchange data analytics accross Asia Pacific. On the equity capital markets side, we focus on Asia Pacific ECM, especially biotech and TMT. Our lead analyst is frequently cited by international media.

Quantitative Analysis

<ul>
<li>We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Aug 28th based on HKEx daily reports.</li>
<li>In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Kuaishou (1024 HK), Link Reit (823 HK).</li>
<li>In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Link Reit (823 HK), Kuaishou (1024 HK).</li>
</ul>


We analyze statistics on top repurchases over one week, one month, one quarter and one year periods ended on Aug 28th based on HKEx daily reports.
In the past 7 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Kuaishou (1024 HK), Link Reit (823 HK).
In the past 30 days, the top 3 companies that repurchased the most shares from the market were Tencent (700 HK), Link Reit (823 HK), Kuaishou (1024 HK).


Hong Kong Buybacks Weekly (Aug 28th): Tencent, Kuaishou, Link Reit, J&T Express, Tuhu Car

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>Maintain BUY. We are of the view that Tuhu’s 1H25 earnings were solid despite industry headwinds.</li><li>While the long-term story (larger after-sales market size with higher margins and fewer players as number of vehicles on the road and average age of vehicles rise in China) remains true, Tuhu’s superb management capabilities, which is likely to help it continue gaining market share, could make investors less concerned about short-term industry volatilities.</li><li>Solid 1H25 earnings with adjusted net profit beat.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Maintain BUY. We are of the view that Tuhu’s 1H25 earnings were solid despite industry headwinds.While the long-term story (larger after-sales market size with higher margins and fewer players as number of vehicles on the road and average age of vehicles rise in China) remains true, Tuhu’s superb management capabilities, which is likely to help it continue gaining market share, could make investors less concerned about short-term industry volatilities.Solid 1H25 earnings with adjusted net profit beat.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Tuhu Car (9690 HK) - Market Share Gain on Superb Management

<ul><li>Maintain BUY. Tuhu’s 2H24 earnings were largely in line with our expectation.</li><li>We find that the profitability of Tuhu’s franchised stores has been better than most auto after-market peers’, as more than 90% of Tuhu’s stores operating for over six months made profits in FY24.</li><li>Although it remains challenging for Tuhu to achieve a YoY increase in single-store revenue metrics amid macro uncertainties, we believe store number expansion could continue to drive revenue growth over the next few years. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Maintain BUY. Tuhu’s 2H24 earnings were largely in line with our expectation.We find that the profitability of Tuhu’s franchised stores has been better than most auto after-market peers’, as more than 90% of Tuhu’s stores operating for over six months made profits in FY24.Although it remains challenging for Tuhu to achieve a YoY increase in single-store revenue metrics amid macro uncertainties, we believe store number expansion could continue to drive revenue growth over the next few years. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Tuhu Car (9690 HK) - Still Better Positioned than Most Rivals

Index Rebal/Special Situations, Quiddity Advisors

Janaghan Jeyakumar, CFA

Index Rebal/Special Situations

Quiddity Advisors

Pan-Asia Catalysts/Events

Index Rebalance

<ul>
<li>The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.</li>
<li>In this insight, we take a look at the final rankings of potential ADDs and potential DELs for the December 2024 index rebal event.</li>
<li>We do not expect any changes for the HSTECH index in December 2024. However, we expect there to be capping flows of US$1,079mn one-way.</li>
</ul>


The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
In this insight, we take a look at the final rankings of potential ADDs and potential DELs for the December 2024 index rebal event.
We do not expect any changes for the HSTECH index in December 2024. However, we expect there to be capping flows of US$1,079mn one-way.


Quiddity Leaderboard HSTECH Dec 24: Midea Group Question Mark and Final Rankings for Exp ADDs/DELs

Equity Long-Short

Mo Aziz

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tuhu-car-inc" target="_blank" data-smartkarma-citation="entities:36012:1" rel="noopener">Tuhu Car (9690 HK)</a> is poised to capture the lion share of China's automotive aftersales service industry that is forecasted to grow at 7.3% CAGR from 2023:30. </li>
<li>Tuhu is on an inflection of high earnings growth (+30% CAGR) as it has reached scalability, cost efficiency, and its younger shops are maturing profitably.    </li>
<li>Our fair value of HKD24 implies 25x FY25 PE - average for US peers. A bargain with 3-year CAGR of 30%, net cash, and churns high free cash flow.</li>
</ul>



Tuhu Car (9690 HK) is poised to capture the lion share of China's automotive aftersales service industry that is forecasted to grow at 7.3% CAGR from 2023:30. 
Tuhu is on an inflection of high earnings growth (+30% CAGR) as it has reached scalability, cost efficiency, and its younger shops are maturing profitably.    
Our fair value of HKD24 implies 25x FY25 PE - average for US peers. A bargain with 3-year CAGR of 30%, net cash, and churns high free cash flow.


Tuhu Car (9690 HK | BUY | TP:HKD24): Poised to Capture China's Auto Aftersales Service Market

China

Tuhu Car operates as an integrated online and offline platform for automotive services in China. The company offers a wide range of products and services, including tires, chassis parts, auto maintenance, repair, car detailing, and auto accessories, along with advertising, franchise, and SaaS solutions. Tuhu Car was founded in 2011 and is headquartered in Shanghai, China.

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Tuhu Car (9690 HK)

Hong Kong Buybacks Weekly (Aug 28th): Tencent, Kuaishou, Link Reit, J&T Express, Tuhu Car

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Tencent (700 HK),...

Ke Yan, CFA, FRM

Tuhu Car (9690 HK) - Still Better Positioned than Most Rivals

We find that the profitability of Tuhu’s franchised stores has been better than most auto after-market peers’, as more than 90% of Tuhu’s stores...

CMB International

Quiddity Leaderboard HSTECH Dec 24: Midea Group Question Mark and Final Rankings for Exp ADDs/DELs

Our current estimate of US$1,079mn one-way capping flow translates to a turnover of 4.4%. The final capping flows will be decided based on the...

Janaghan Jeyakumar, CFA

Tuhu Car (9690 HK | BUY | TP:HKD24): Poised to Capture China's Auto Aftersales Service Market

Tuhu Car (9690 HK) set to dominate China's automotive aftersales industry with high earnings growth potential and attractive valuation.

Mo Aziz

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Hong Kong Buybacks Weekly (Aug 28th): Tencent, Kuaishou, Link Reit, J&T Express, Tuhu Car

We analyzed the Hong Kong buyback data in the past week and highlight the top 3 companies that repurchased the most shares were Tencent (700 HK),...

Ke Yan, CFA, FRM

Tuhu Car (9690 HK) - Market Share Gain on Superb Management

While the long-term story (larger after-sales market size with higher margins and fewer players as number of vehicles on the road and average age...

CMB International

Tuhu Car (9690 HK) - Still Better Positioned than Most Rivals

We find that the profitability of Tuhu’s franchised stores has been better than most auto after-market peers’, as more than 90% of Tuhu’s stores...

CMB International

Quiddity Leaderboard HSTECH Dec 24: Midea Group Question Mark and Final Rankings for Exp ADDs/DELs

Our current estimate of US$1,079mn one-way capping flow translates to a turnover of 4.4%. The final capping flows will be decided based on the...

Janaghan Jeyakumar, CFA

Tuhu Car (9690 HK | BUY | TP:HKD24): Poised to Capture China's Auto Aftersales Service Market

​Tuhu Car (9690 HK) set to dominate China's automotive aftersales industry with high earnings growth potential and attractive valuation.

Mo Aziz

Tuhu Car (9690 HK) set to dominate China's automotive aftersales industry with high earnings growth potential and attractive valuation.