In today’s briefing:
- Alibaba (BABA US): Fighting Back
- Add Meituan on Rumors of Social Benefit Payments
- DPC Dash Pre-IPO – The Negatives – Lags the Leader, Remains Loss Making
- Kuaishou: Domestic Business Turns Profitable for the First Time
- Geely – ’22 Target Miss Already in Expectations, Catalysts for ’23
- Sunshine Insurance Group Pre-IPO – PHIP Updates – Mixed Bag
- Growatt Technology IPO: Growing Watts
- China Dongxiang (3818 HK): Losses Narrowing Down, a Good Sign
Alibaba (BABA US): Fighting Back
- Ownership in Alibaba Group Holdings is on the rise among active Greater China managers.
- Stock price below $100 a catalyst for active Greater China managers to buy back in, with Invesco, JP Morgan and E Fund among those opening positions
- Alibaba remains well behind both TSMC and Tencent on an average weight basis and is the 2nd largest underweight in the Greater China region.
Add Meituan on Rumors of Social Benefit Payments
- Meituan’s recent price decline was partly due to the rumors about the social benefit payments.
- First, rumors are unverified statements. There was no such meeting at all.
- Second, the social benefit payment impact is probably controllable. I think the recent price decline provides a chance of adding on the stock.
DPC Dash Pre-IPO – The Negatives – Lags the Leader, Remains Loss Making
- DPC Dash aims to raise around US$100m in its Hong Kong IPO.
- The company is the exclusive master franchisee for Domino’s Pizza in China, HK and Macau. DPC operated 562 stores across 13 cities, as of Nov 2022.
- In this note, we will talk about the not-so-positive aspects of the deal.
Kuaishou: Domestic Business Turns Profitable for the First Time
- Kuaishou Technology (1024 HK) reported 3Q2022 results. Revenue grew 12.9% YoY to RMB23.1bn (vs consensus RMB22.6bn) while reported operating losses declined to RMB2.6bn (vs consensus RMB3.1bn) from RMB3.1bn in 3Q2021.
- The company’s domestic business made an operating profit for the first time while there has been significant reduction in operating losses from the overseas business
- Kuaishou’s share price moved up 7% during today’s trade following its earnings announcement and we think there is further upside to the company’s current share price.
Geely – ’22 Target Miss Already in Expectations, Catalysts for ’23
- Sector headwinds including supply chain shortage and business interruptions from Covid lockdown is easing.
- More new models in pipeline to drive sales volumes and earnings in 2023E
- Valuation re-rating would be triggered with earning recovery, consensus estimate upgrades, Zeekr ramping up and potentially Zeekr spin off.
Sunshine Insurance Group Pre-IPO – PHIP Updates – Mixed Bag
- Sunshine Insurance Group (SIG), a life, health and P&C insurance company, aims to raise up to US$1bn in its HK IPO.
- SIG is an integrated insurance provider which offers both life and health (L&H) and property and casualty (P&C) insurance in China.
- We have looked at the company’s past performance in our previous notes. In this note, we will talk about the updates from its latest filings.
Growatt Technology IPO: Growing Watts
- Growatt Technology (1833969D CH), a leading PV invertors manufacturer, is pre-marketing a US$500 million HKEx IPO in October, according to press reports.
- We previously discussed the IPO in Growatt Technology IPO: The Bull Case and Growatt Technology IPO: The Bear Case.
- The PHIP which disclosed the 1H22 results and latest developments suggests that Growatt is delivering high growth, profitability and cash generation.
China Dongxiang (3818 HK): Losses Narrowing Down, a Good Sign
- Lower losses for investment business and sportswear retailing have contributed to a 48.4% reduction in losses for 1H FY23 at China Dongxiang Group Co (3818 HK).
- The resumption of interim special dividend is a welcoming sign. Inventory clearance, store optimisation, cost reduction and growth at the PHENIX ski wear brands are positive drivers.
- Its market capitalisation of HK$1.88bn represents a steep discount of 79% to its cash and investment portfolio of Rmb8.46bn, and this also means sportswear business is free.
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