In today’s briefing:
- StubWorld: Geely Is (Mostly) Trading “Rich”; And May Still Bump Zeekr Terms
- Green Tea Group IPO – Peer Comp & Thoughts on Valuation
- Wanda Hotel Development’s Asset Sale: Potential Upside and Key Risks Analyzed
- Lucror Analytics – Morning Views Asia
- SMIC 1Q25 Strong Wafer Growth but Weak ASP. Same in 2Q. Large Capex to Continue in 2025.
- Cambodian Rubber Production Struggles To Keep Pace With Tire Exports
- Hua Hong: Very Poor Margins to Continue, Operating Losses for Longer
- Asia Real Estate Tracker (09-May-2025): GLP to right ship post $1.8B loss.
StubWorld: Geely Is (Mostly) Trading “Rich”; And May Still Bump Zeekr Terms
- Geely Auto (175 HK)‘s discount to NAV is less than half its 12-month average. And Geely is generally trading tighter to listed PRC auto peers.
- Preceding my comments on Geely – and NTT Data Corp (9613 JP) – are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
Green Tea Group IPO – Peer Comp & Thoughts on Valuation
- Green Tea Group (GTG) is looking to raise US$157m (HKD 1.2bn) in its upcoming Hong Kong IPO.
- GTG is the fourth largest Casual Chinese Cuisine player in Mainland China, it has been gaining market share historically and is likely to continue.
- GTG plans to accelerate its expansion of the restaurant network, focusing on expansion into tier two cities and below, with small restaurants rather than large ones.
Wanda Hotel Development’s Asset Sale: Potential Upside and Key Risks Analyzed
- Wanda Hotel Development plans to sell hotel management operations to Tongcheng Travel for HK$2.4bn, exceeding its market cap.
- WHD intends to return most sale proceeds to shareholders, retaining some for working capital and future investments.
- WHD retains valuable real estate assets, including Chicago condos and a Guilin shopping mall, with potential additional sales.
Lucror Analytics – Morning Views Asia
- In today’s Morning Views publication we comment on developments of the following high yield issuers: West China Cement, Medco Energi
- The US has unveiled a trade agreement with the UK. The US will maintain a 10% blanket tariff on UK imports, while UK duties on US goods will be reduced to 1.8% from 5.1%. It is unclear how the figures are tabulated.
- In addition, tariffs on UK autos will be adjusted such that a 10% tariff will apply to the first 100 k vehicle imports, with any additional vehicles facing a 25% rate.
SMIC 1Q25 Strong Wafer Growth but Weak ASP. Same in 2Q. Large Capex to Continue in 2025.
- 1H25 strong revenue growth continues as capacity increase, “production shifting back domestically”, but weakening ASP and clearly demand pull-in in 1H due to US tariffs and China domestic consumer subsidies.
- “2H not clear, especially after late 3Q”. Management mentions the usual macro / US tariffs unknowns. 2025 Capex similar to 2024 (US$7.7bn, 80% revenue), D&A increasing, ASP down, margins muted.
- The stock is as expensive as always. 49x 2025 EPS, 41x 2026. Consensus is not expecting a negative tariffs shock or weaker China domestic demand.
Cambodian Rubber Production Struggles To Keep Pace With Tire Exports
- In Q1 2025, Cambodia exports 59,754 tons of rubber, down 13.8% YoY
- Overall rubber production in Q1 2025, 64,080 tons, down 7.9% YoY
- Trump tariff, EUDR pose challenge to Cambodian rubber and tire
Hua Hong: Very Poor Margins to Continue, Operating Losses for Longer
- Operating loss in 1Q25 will persist in 2Q25 – I expect throughout 2025. Hua Hong rapid capacity increase is supposedly sold out but D&A is increasing much faster than revenue.
- Consensus is not expecting an end-demand slowdown resulting from US import tariffs, or sluggish China domestic consumption. Consensus expects Hua Hong to sell its capacity increase fully.
- Given losses in 1H25, Consensus EPS forecast is too high for 2025, probably for 2026 as well. Stock is expensive at 43x 2025 EPS, EPS forecasts looks too high.
Asia Real Estate Tracker (09-May-2025): GLP to right ship post $1.8B loss.
- GLP aims to bounce back from a $1.8B loss by selling its international funds business.
- BlackRock, Centurion, Coliwoo, and Arch are exploring residential opportunities at the Singapore Forum.
- The goal is to create a mutually beneficial situation for investors and occupiers through these discussions.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
