Daily Brief China: Alibaba Group Holding , New Oriental Education & Techn, Huawei Technology, ENN Natural Gas, Haier Smart Home , Sun Hung Kai Properties and more

• Investor confidence toward the Chinese tech sector remains fragile after the government crackdown, and Alibaba Group was particularly hard hit due to Jack Ma’s previous conflicts with Chinese regulators.
• Growth of its main eCommerce business is in question given the softening Chinese economy and intense competitions. Additionally, the growth of its cloud computing unit is also slowing down. 
• China’s stock market stabilization fund is not likely to benefit Alibaba directly as it will be used to buy onshore stocks only. 

• New Oriental Education & Techn (9901 HK) reported better than expected FY2Q24 results last night, with sales up 36% yoy and net profit up 183% yoy.
• The company further guided a 42-45% sales growth in FY3Q24, well above market consensus. 
• The visibility for the next 2-3 years is actually quite high post-“double reduction” policy.

• Huawei Technologies Co. Ltd. on Thursday launched the latest version of its own operating system — HarmonyOS NEXT, which will no longer support Android apps and can only accommodate apps specifically developed for it.
• The Chinese telecom equipment giant said the Beta version for developers will be released in the second quarter, and the general version for consumers in the fourth quarter.
• Insiders from Huawei expect the new Mate smartphones to be released in the second half with the HarmonyOS NEXT installed.

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• ENN Natural Gas

• Haier Smart Home (6690 HK)‘s management is confident about the FY24 outlook, with net profit growth of 12-13% can be sustained.  
• Casarte will continue to lead with 10-15% revenue increase. There is room for further margin expansion led by overseas markets and process optimisation in the domestic market.
• The plunge in real estate market does not have a material impact on sales and HSH is positive on replacement/upgrade demand. Its FY24F PER of 10.1x is undemanding.

• The data in this insight is collated from the “shareholding disclosure” link on the HKEx website.
• Often there is a corresponding HKEx announcement on the increase – or decrease – in the shareholding by directors. Or pledging. However, such disclosures are by no means an absolute.
• The key stocks mentioned in this regular insight are Sun Hung Kai Properties (16 HK), Wuxi Biologics (2269 HK), Sichuan Kelun-Biotech Biopharm (6990 HK), and Wisdom Sports (1661 HK).