In today’s briefing:
- S&P500/400/600 Index Rebalance: DASH In as Stability Trumps Volatility
- Quiddity TDIV/50/100 Mar25 Results: US$500Mn+ One-Way Flows Collectively; Only One Surprise
- JD.com (9618 HK) FY Earnings Recap: Intra-Day Swing of 7.3%.
- MIXUE Group (2097.HK) – Updates on Performance Forecast and Valuation Outlook
- Significant Share Buybacks Are Key to Improving Profitability of Capital
- ECM Weekly (10th Mar 2025) – BYD, Japan Post, Mixue, Sanhua, Chifeng, Nanshan, Goertek, Travel Food
- Multi Bintang Indonesia (MLBI IJ): Steady FY24, 9% Yield and >80% ROCE
S&P500/400/600 Index Rebalance: DASH In as Stability Trumps Volatility
- There are 4 changes for the S&P 500 INDEX, 6 changes for the S&P Midcap400 Index and 14 changes for the S&P SmallCap600 Index at the March rebalance.
- DoorDash (DASH US) was newly eligible after meeting the profitability criterion, while AppLovin (APP US), Coinbase Global (COIN US) and Interactive Brokers Group, Inc (IBKR US) were overlooked again.
- There will be more same-way flow for the S&P 500 INDEX (SPX INDEX) adds and deletes from the Select Sector index trackers.
Quiddity TDIV/50/100 Mar25 Results: US$500Mn+ One-Way Flows Collectively; Only One Surprise
- The index changes for the T50/100 index family and the TDIV index were confirmed after market close on Friday 7th March 2025.
- There will be one change for T50 and two other changes for T100. There will be no changes for the TDIV index but there will be capping flows.
- In this insight, we will take a look at our final flow expectations for the March 2025 index rebal event.
JD.com (9618 HK) FY Earnings Recap: Intra-Day Swing of 7.3%.
- JD.com (9618 HK) Q4 2024 earnings significantly exceeded analyst expectations with revenue reaching RMB 347 billion (13.4% YoY increase).
- The stock experienced a volatile two-day reaction, rising 8.4% on March 6 followed by a 5.0% decline on March 7, resulting in a net gain of 3.03%.
- Options strategies including straddles, strangles, and call calendar spreads were actively traded ahead of earnings with potential intraday profitability. Longer dated implied volatility decreased following the announcement.
MIXUE Group (2097.HK) – Updates on Performance Forecast and Valuation Outlook
- MIXUE’s IPO debut was stellar. the IPO pricing of HK$202.5/share was indeed conservative. MIXUE is able to obtain more valuation premium space after IPO from a relatively low IPO pricing.
- However, concerns on future performance growth remains. Investors need to pay attention to the performance verification. Market sentiment is becoming “overheated”, and the pressure for short-term stock price corrections increases.
- We updated our forecast for 2025-2027. If based on P/E of 20-25x, market value is HK$109.4-136.8 billion, HK$122.5-153.2 billion, HK$134.8-168.5 billion based on 2025, 2026 and 2027 net profit, respectively.
Significant Share Buybacks Are Key to Improving Profitability of Capital
- While the company’s attitude toward shareholder returns has been positive, the 11% dividend increase is not expected to reduce cash on hand by much.
- In a condition where so much cash has accumulated, it’s not a bad idea to use DOE as a guide to avoid accumulating cash on hand above a certain level.
- Since FY3/2025 profits will grow in non-manufacturers, which has relatively low profit margin, the overall profit margin of companies won’t increase. Therefore, unless assets are reduced significantly, ROE will soft.
ECM Weekly (10th Mar 2025) – BYD, Japan Post, Mixue, Sanhua, Chifeng, Nanshan, Goertek, Travel Food
- Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
- On the IPO front, Mixue Group (2097 HK) provided some much needed relief to the HK tea chains, Seoul Guarantee Insurance (031210 KS) might not do the same this week.
- On the placements front, BYD (1211 HK)‘s jumbo offering has been doing well, while Japan Post Bank (7182 JP) hasn’t been correcting much.
Multi Bintang Indonesia (MLBI IJ): Steady FY24, 9% Yield and >80% ROCE
- Multi Bintang Indonesia (MLBI IJ) delivered steady FY24 growth, with revenue and profits up 1.9% and 7.1% YoY, respectively. Q4 FY24, however, underperformed expectations with revenue/profits up 0.6%/1.7% YoY.
- Although Q4 typically represents >30% of overall annual revenue/profits, being the strongest season, its performance was disappointing compared to the strong 21%/35% YoY revenue/profit growth seen in Q3 2024.
- Multi Bintang Indonesia (MLBI IJ) represents tremendous value with a dividend yield of 9% (100% payout), ROEs exceeding 80%, and a cheap multiple of 11x FY24 PE.
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