ChinaDaily Briefs

Daily Brief China: ZTO Express, Meituan, JD Logistics, Shenzhen Mindray Bio-Medical Electronics, Country Garden Holdings Co, Kanzhun and more

In today’s briefing:

  • China Internet Weekly (13Mar2023): ZTO, Meituan, Alibaba, Trip.com, Dada, JD.com
  • Meituan: Scaling Back Ride-Hailing Business to Maintain Margins
  • JD Logistics (2618 HK): 4Q22, Outside Customer Revenue Continued Surging, Buy
  • Shenzhen Mindray Bio-Medical Electronics (300760.CH) – Shareholders’ Stock Selling and the Outlook
  • Morning Views Asia: Adani Transmission, Country Garden Holdings Co
  • [Kanzhun Ltd. (BZ US) Rating Change]: Nearing a Saturation Point…DG to SELL

China Internet Weekly (13Mar2023): ZTO, Meituan, Alibaba, Trip.com, Dada, JD.com

By Ming Lu

  • Grizzly Research LLC publishes a short selling report on ZTO.
  • Meituan plans to shift car hailing from direct operation to a platform for third-party operators.
  • Dada, which was acquired by JD.com last year, posts good 4Q22 results.

Meituan: Scaling Back Ride-Hailing Business to Maintain Margins

By Shifara Samsudeen, ACMA, CGMA

  • Several news media outlets reported last week that Meituan (3690 HK) is restructuring its ride-hailing services business to cut down costs as top line growth is slowing down.
  • Meituan launched ride-hailing services as a stand-alone app in 2017, it was merged into Meituan Super App in 2019. Relaunched as a stand-alone app in 2021 following Didi’s app removal.
  • Meituan has increased its headcount to compete with Douyin while has started hiring riders to launch services in Hong Kong which would likely to further drag down margins.

JD Logistics (2618 HK): 4Q22, Outside Customer Revenue Continued Surging, Buy

By Ming Lu

  • Total revenue increased by 41% YoY and revenue from external customers increased by 69% YoY in 4Q22.
  • We believe total revenue will grow by 26% in 2023 and 17% in 2024.
  • We also believe the stock has an upside of 58% and a price target of HK$20.

Shenzhen Mindray Bio-Medical Electronics (300760.CH) – Shareholders’ Stock Selling and the Outlook

By Xinyao (Criss) Wang

  • Several original shareholders reduced their holdings of Mindray, which indicates that the senior executives and major shareholders aren’t optimistic about Mindray’s outlook, putting the Company’s long-term growth under scrutiny.
  • Mindray’s performance in overseas markets could be under pressure, which is an uncertain factor to drag down this year’s performance growth. Supply chain issue would hinder Mindray’s breakthrough in high-end fields.
  • Performance slowdown could continue if without breakthroughs in new growth points or internationalization. Our forecast on 2023 growth is about 15%-18%. Mindray’s valuation may fall back to 30-35 PE TTM.

Morning Views Asia: Adani Transmission, Country Garden Holdings Co

By Charles Macgregor

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.


[Kanzhun Ltd. (BZ US) Rating Change]: Nearing a Saturation Point…DG to SELL

By Shawn Yang

  • We are concerned that BZ will incur higher sales marketing cost to maintain its increasingly sluggish MAU growth. 
  • We expect BZ to post C4Q22 revenue 2% higher than consensus, but with non-GAAP net margin 5.7ppt lower, due to lower GM and higher S&M.
  • We downgrade BZ from BUY to SELL rating, and cut TP to US$12.4, imply 51x PE in 2023, and the stock currently trading at 76x PE in 2023.

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