In this briefing:
- The GER Weekly EVENTS Wrap: Healius, FamilyMart, Healthscope, Myob and Hitachi
- TRACKING TRAFFIC/Chinese Tourism: Visits to Macau & HK Surge
1. The GER Weekly EVENTS Wrap: Healius, FamilyMart, Healthscope, Myob and Hitachi
Happy New Year! Below is a recap of the key event-driven research produced by the Global Equity Research team. This week we dig into the potential low-ball bid for Healius (HLS AU) , we update our view on the messy deal between Familymart Uny Holdings (8028 JP) and Don Quijote Holdings (7532 JP) as the deal shifts to earnings dislocation. In addition, we question the economics of a material bump for Healthscope Ltd (HSO AU), assess the reduced bid (and great call by Arun) on MYOB Group Ltd (MYO AU) and finally dig into the potentially risky acquisition by Hitachi Ltd (6501 JP) of ABB Ltd (ABBN VX)‘s power grids.
The rest of our event-driven research can be found below
Best of luck for the new week – Rickin, Venkat and Arun
2. TRACKING TRAFFIC/Chinese Tourism: Visits to Macau & HK Surge
A year ago we began publishing Tracking Traffic/Chinese Tourism as the hub for all of our research on China’s tourism sector. This monthly report features analysis of Chinese tourism data, notes from our conversations with industry participants, and links to recent company news and thematic pieces. Our aim is to highlight important trends in China’s tourism sector (and changes to those trends).
In this issue readers can find:
- A review of China’s outbound tourist traffic in November, which strengthened: Lifted by extraordinarily strong growth in visits to Hong Kong and, to a lesser extent, Macau, Chinese outbound travel demand rebounded strongly in the seven regional destinations we track. But the fact that November’s growth was led overwhelmingly by Hong Kong and Macau — destinations close enough for weekend or day trips from population centers in Southern China — suggests Chinese tourists’ purse strings are still tight.
- An analysis of November domestic Chinese travel activity, which turned weaker: November data from China’s three leading airlines and the Ministry of Transport show moderating domestic travel demand. For combined rail, highway, and air travel, November demand grew by less than 3% Y/Y. Along with the change in destination mix for outbound travel (that favors ‘nearby’ destinations), it now appears domestic demand has weakened, too.
- Links to other recent news & research on Chinese tourism: Readers can check out our quick takes on Macau’s December GGR figure, preliminary GTV and revenue figures released by Ctrip.Com International (Adr) (CTRP US), declining US visa issuance to Chinese tourists, and Qatar Airways’ new investment in a leading Chinese airline.
Although we remain positive on the long-term growth of Chinese tourism, it’s clear that near-term demand has weakened substantially. We continue to take a negative view of travel intermediaries like Ctrip, which face intensifying competition from many sources. We are more positive on the prospects of actual owners of Chinese travel and tourism assets, like hotel chain Huazhu Group (HTHT US) and Air China Ltd (H) (753 HK).
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