In today’s briefing:
- HSI Index Options Weekly (March 03-07): Alibaba’s Breakout and Policy Support Boost HSI
- [JD.com, Inc (JD US, BUY, TP US$52) Earnings Review]: Market Calls for Longer-Term Growth Drivers
- Soundwill Holdings (878 HK): Foo Family’s Offer at HK$8.50
- JD Logistics Q424 Earnings: Taobao / Tmall Access Fails to Generate Expected Benefits
- Last Week in Event SPACE: Cheung Kong, Macromill, China National Building Material, Canvest
- China Healthcare Weekly (Mar.9) – 11th VBP, PD-1/VEGF BsAb Outlook, MIXUE’s Stunning IPO Debut
- HSCEI Index Options Weekly (March 03-07): Strong Gains as Skew Signals Tail Demand
HSI Index Options Weekly (March 03-07): Alibaba’s Breakout and Policy Support Boost HSI
- Positive sentiment helps push HSI to new highs aided by rally in Alibaba.
- Implied vol at high levels but so far supported by historic vols that are above implieds.
- We highlight a large trade in out-of-the-money Calls for May expiry.
[JD.com, Inc (JD US, BUY, TP US$52) Earnings Review]: Market Calls for Longer-Term Growth Drivers
- JD C4Q24 revenue exceeded our estimate/consensus by 3%/4% and adjusted NI by 16%/19%, driven by subsidies and logistic efficiency gains.
- We expect JD to maintain 11% YoY revenue growth in C1H25 but moderate to 5.9% in 2H.
- We maintain JD.com’s TP at US$ 52 and the BUY rating. Market concern on lack of details for long term driver is valid but JD.com still has time.
Soundwill Holdings (878 HK): Foo Family’s Offer at HK$8.50
- Soundwill Holdings (878 HK) announced a privatisation offer from the Foo Family, the largest shareholder, at HK$8.50 (HK$7.50 cash + HK$1.00 special dividend), a 62.8% premium to the undisturbed price.
- Key conditions include approval by at least 75% of independent shareholders (<10% of independent shareholders rejection) and a headcount test. No disinterested shareholder holds a blocking stake.
- While the offer is light compared to peer multiples, it is attractive compared to historical trading ranges. A low AGM minority participation rate facilitates the vote.
JD Logistics Q424 Earnings: Taobao / Tmall Access Fails to Generate Expected Benefits
- Investors had hoped to see tangible benefits of Taobao / Tmall access in Q424 results
- But revenue growth acceleration was unimpressive, and core margins fell noticeably
- We believe its disappointing Q424 numbers will result in near-term underperformance
Last Week in Event SPACE: Cheung Kong, Macromill, China National Building Material, Canvest
- Did Trump do CKH (1 HK) a solid, convincing them to sell assets that have profited from international trade growth, just as Trump starts imposing tariffs on anything that moves?
- An OK package for Seven & I (3382 JP). Not perfect. SEI IPO’s a bit dodgy. It may be designed to spur ACT into action, but isn’t an awful fallback.
- Macromill (3978 JP)‘s Offer bumped. If you want to make sure this deal doesn’t get done, do the things you need to do to make sure it doesn’t get done.
China Healthcare Weekly (Mar.9) – 11th VBP, PD-1/VEGF BsAb Outlook, MIXUE’s Stunning IPO Debut
- The 11th national VBP is expected to start in 2025H1. Companies such as Kelun, CSPC, Qilu Pharmaceuticals, Fosun Pharma, China Resources Pharmaceutical, etc. are expected to be affected the most.
- It is estimated that the entire market of PD-1/L1 x VEGF BsAb is approximately US$20-30 billion. AK112 is expected to seize about 40%-50% of the market or US$8-15 billion.
- MIXUE’s IPO debut was stellar. Conservative investors can considering taking profits as risk of share price corrections has increased. Radical investors can choose to bet on valuation exceeding Nongfu Spring.
HSCEI Index Options Weekly (March 03-07): Strong Gains as Skew Signals Tail Demand
- HSCEI rebounded 5.90%, reversing last week’s weakness and extending its rally since mid-January.
- Volatility softened in the short term, with implieds trending below key historic vol measures.
- Skew shifted as demand for tail risk increased, with both out-of-the-money Puts and Calls seeing higher implied volatility, reflecting a bid for protection and upside exposure.
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