In today’s briefing:
- Weekly Deals Digest (22 Dec) – Kingston, Fengxiang, Yashili, Golden Energy, Olam, SSREIT, Warrego
- China Healthcare Weekly (Jan.20) – NRDL Negotiation Results, JW Therapeutics, Sirnaomics, Antengene
- Alibaba Group Holdings: Staying the Course
- Tencent Music Entertainment(TME.US) 4Q22 Preview: Raise TP for Gradual but Slow Recovery
- JD Logistics(2618.HK) 4Q22 Preview: Topline Reacceleration Supported by Retail Recovery
- Morning Views Asia: Fosun International, Yankuang Energy Group
- KE Holdings(BEKE.US) Preview:C4Q22 Marked the Beginning of 2023 Recovery
- Bilibili(Bili.US) 4Q22 Preview: Raise TP for More Optimistic Outlook in 2023
- ZTO Express(ZTO.US) 4Q22 Preview: Maintain Leadership and Benefit from Industry Rebound
Weekly Deals Digest (22 Dec) – Kingston, Fengxiang, Yashili, Golden Energy, Olam, SSREIT, Warrego
- A weekly summary of key developments across ECM and Event-Driven names tracked by us across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Thailand, Korea, India and Chinese ADRs.
- ECM developments – iQIYI Inc (IQ US), Bilibili Inc (BILI US) placements, VinFast (1905332D VN) continues to pre-market a US$1bn IPO.
- Event-Driven developments – China Internet (810 HK), Shandong Fengxiang (9977 HK), Kingston Financial (1031 HK), Golden Energy & Resources (GER SP), Olam Group (OLG SP), Sabana Industrial REIT (SSREIT SP).
China Healthcare Weekly (Jan.20) – NRDL Negotiation Results, JW Therapeutics, Sirnaomics, Antengene
- The 2022 NRDL negotiation results were released. We analyzed some points worth investor’s attention.
- The “safety pad” brought by medical insurance is difficult to ensure products future sales.Even after entering NRDL, how to improve patient/doctor coverage is an important problem for enterprises to consider.
- Here are some companies that investors are interested in. We mainly analyzed some key points of them, including Sirnaomics (2257 HK), JW Therapeutics (2126 HK), Antengene (6996 HK).
Alibaba Group Holdings: Staying the Course
- Average fund weights in Alibaba among 270 active EM funds fell from a peak of 6.3% in October 2020 to between 1.7% and 2.5% over the last 18 months.
- Significant switch from Growth to Value, with Value/Yield funds at record ownership levels whilst Aggressive Growth scale back holdings.
- Fund ownership trends are positive, with a growing number of managers making the move to overweight whilst index weights and prices remain at these levels.
Tencent Music Entertainment(TME.US) 4Q22 Preview: Raise TP for Gradual but Slow Recovery
- We estimate that TME’s 4Q22 topline/bottom line would be (2.5%)/3.8% vs cons., because of disturbance in its social entertainment and ads business.
- We forecast net income would only slightly beat cons by 6.1%, due to likely expense rebound and no major improvement on main businesses.
- Reiterate SELL rating but raise TP to US$ 6.7 to reflect margin beat and improvement of macro environment. Our TP implies 12.3X PE in 2023.
JD Logistics(2618.HK) 4Q22 Preview: Topline Reacceleration Supported by Retail Recovery
- We expect JDL (including Deppon) to report C4Q22 net revenue in line with cons., and non-IFRS net margin beat cons. by 0.5ppt.
- We expect JDL’s top line to reaccelerate starting in C2Q23, supported by recovery of JD GMV, growing standalone delivery services, and returning demand for integrated supply chain services.
- Increasing scale and improving operating efficiency in warehousing and transportation will contribute to JDL’s margin expansion. We upgrade JDL to BUY rating and raise TP to HK$ 21.
Morning Views Asia: Fosun International, Yankuang Energy Group
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.
KE Holdings(BEKE.US) Preview:C4Q22 Marked the Beginning of 2023 Recovery
- We expect BEKE C4Q22 revenue and non-GAAP NI to be 9% and 64% above consensus. The bottom line beat is a result of earning leverage;
- We expect the market monthly EH/NH transaction volume to turn positive growth in C1H23, with resumed offline activities and continuing policy support as main drivers
- We raise TP by US$1 to US$20: 1) dialling up GTV in 4Q22, 2) faster pace transaction recovery in 2023, and 3) rebase FX from 7.05 to 6.77 in valuation.
Bilibili(Bili.US) 4Q22 Preview: Raise TP for More Optimistic Outlook in 2023
- While BILI’s top line in 4Q22/2023 would be in line, we suggest that its bottom line in 4Q22/2023 would beat cons. by 6%/18% due to cost-savings and optimized monetization efficiency.
- BILI’s adjusted net loss would be significantly narrowed to (3.2)bn RMB in 2023, per our estimation. However, we still have concerns about some of BILI’s fundamentals.
- Maintain SELL but raise TP to US$ 16.4, implying 1.8X PS in 2023.
ZTO Express(ZTO.US) 4Q22 Preview: Maintain Leadership and Benefit from Industry Rebound
- Based on our tracking, ZTO’s parcel volume in C4Q22 increased 4.5% YoY and 4.1% QoQ,and its market share reached 21.8%, up 1.6ppt YoY and down (0.4ppt) QoQ due to seasonality.
- ZTO benefits from the recovery of eCommerce and industry volume. It is highly competitive both in pricing and in service quality, which fend off peers under escalating competition into 2023.
- Maintain BUY and raise TP to US$35.0 due to industry rebound and ZTO’s competitive edges in service and pricing. Our TP implies 23x P/2023E.
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