In today’s briefing:
- Plover Bay (1523 HK): Slight Deceleration But Solid H1 FY25 And Optimistic Future Growth
- Joy City (207 HK): Minorities Should Take The Cash
- Luckin Coffee’s U.S. Invasion: A Brewing Storm for Starbucks!
- Lucror Analytics – Morning Views Asia
- Continue Adding Exposure to China; Short-Term Supports to for This ACWI-US Pullback
- Hong Kong Single Stock Options Weekly (July 28–Aug 01): Reversal Hits, Breadth Collapses, Vol Steady
Plover Bay (1523 HK): Slight Deceleration But Solid H1 FY25 And Optimistic Future Growth
- Plover Bay Technologies (1523 HK) reported 9.9%/13.4% YoY revenue/net profit growth, led by growth from customers in the EMEA and Asia (with the US being a drag).
- Earnings were more or less in line with our preview, Plover Bay (1523 HK): Preview On Earnings For H1 2025, but revenues were slightly weaker, and margins were stronger.
- The stock trades at 21.5x PE FY25e (assuming 15% growth), with a 4.4% dividend yield (assuming an 80% payout), but we acknowledge there could be upside to our earnings.
Joy City (207 HK): Minorities Should Take The Cash
- Chinese property play Joy City (207 HK) has announced a Scheme buyback, with a price of $0.62/share (declared final), a 67.57% premium; but more like a 158% premium to undisturbed.
- Yes, this is a 70% discount to NAV. Yet Joy City has traded at P/B of 0.14x, on average, the past five years. Earnings have trended south in that timeframe.
- The IFA will likely cite liquidity and Joy City’s historical discount to NAV, and opine “reasonable”, and probably even “fair”. It is what it is for long-suffering shareholders.
Luckin Coffee’s U.S. Invasion: A Brewing Storm for Starbucks!
- Luckin Coffee reported strong financial results for the first quarter of 2025, underlining significant year-over-year growth in both revenue and profitability.
- The company revealed a 41% increase in total net revenues, reaching approximately RMB 8.9 billion, mainly driven by a 42% rise in gross merchandise value (GMV) amounting to RMB 10.4 billion.
- The growth in revenue was primarily fueled by expanded product sales through increased customer transactions, supported by an extensive store network.
Lucror Analytics – Morning Views Asia
- In today’s Morning Views publication we comment on developments of the following high yield issuers: MGM China, SK Hynix, Tata Steel, Vedanta Resources
- Short-end UST yields rose slightly yesterday, extending Wednesday’s post-Fed curve flattening trend. The yield on the 2Y UST rose 2 bps to 3.96%, while the yield on the 10Y UST was stable at 4.38%. Equities ended the day mixed.
- The S&P 500 erased a rally earlier in the day on renewed tariff concerns, declining 0.4% to 6,339. The Nasdaq closed flat at 21,122, after Microsoft and Meta Platforms reported solid results.
Continue Adding Exposure to China; Short-Term Supports to for This ACWI-US Pullback
- We remain near-term bullish since our 4/22/25 Compass, and our intermediate-term outlook remains bullish as well (as of our 5/14/25 Compass), with Int’l Compass reports all echoing this sentiment.
- We will maintain our bullish intermediate-term view as long as market dynamics remain healthy and the SPX and ACWI-US are above 6028-6059 (up from 5700-5785) and $119-$121.
- $128, $125-$126, and $123-$123.50 are short-term supports to watch on ACWI-US; we will maintain our near-term bullish outlook as long as $123 support holds.
Hong Kong Single Stock Options Weekly (July 28–Aug 01): Reversal Hits, Breadth Collapses, Vol Steady
- HSI reversed course with four straight down days to close the week sharply lower.
- Breadth collapsed, with only a small fraction of names finishing higher; option volumes rose into the decline with Puts taking more than their usual share of activity.
- Implied vols fell on the week, erasing last week’s gains and not showing signs of stress at this point.
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