Global Mobility/Transport, Equity Long-Short

Mohshin Aziz

Equity Bottom-Up

TUHU Car Inc. offers automotive services. The Company develops leading integrated online and offline platform which provides automotive maintenance, repair, detailing, and more. TUHU Car provides its services throughout Hong Kong.

<ul>
<li>Tuhu sets up operations in Malaysia, its first overseas expansion outside of Greater China.</li>
<li>We think Tuhu can dominate the market within 3-4 years, as there are no local establishments that can match its infrastructure, know-how, and capital base. </li>
<li>Fair value of HKD23 implies 22x FY26 PE - average for US peers. A bargain with 3-year CAGR of 30%, net cash, and churns high free cash flow.</li>
</ul>


Tuhu sets up operations in Malaysia, its first overseas expansion outside of Greater China.
We think Tuhu can dominate the market within 3-4 years, as there are no local establishments that can match its infrastructure, know-how, and capital base. 
Fair value of HKD23 implies 22x FY26 PE - average for US peers. A bargain with 3-year CAGR of 30%, net cash, and churns high free cash flow.


Tuhu Car (9690 HK | BUY | TP:HKD23): Tuhu Goes International, the Next Engine of Growth

Thematic (Sector/Industry)

<ul>
<li>Markets 93% priced for 25bps cut at 17 Sept FOMC; year-end split between additional 25bps or 50bps.    </li>
<li>Immense political heat on the Fed: POTUS Presses for cuts, Treasury Secretary Scott Bessent model flags for 150bps easing.    </li>
<li>We think the Fed will relent for a 25bps cut in Sep, Chairman Powell can't fight alone! </li>
</ul>


Markets 93% priced for 25bps cut at 17 Sept FOMC; year-end split between additional 25bps or 50bps.    
Immense political heat on the Fed: POTUS Presses for cuts, Treasury Secretary Scott Bessent model flags for 150bps easing.    
We think the Fed will relent for a 25bps cut in Sep, Chairman Powell can't fight alone! 


US Fed Rates: Data Dependence Meets Washington’s Heavy Hand

Zhongsheng Group Holdings Ltd. retails automobiles.  The Company imports and retails primarily luxury and mid- to high-end automobile brands.

<ul>
<li>Zhongsheng share price surged by 26% on Friday as investors warms up to China, and accumulate beaten down consumer stocks. Zhongsheng was the top performing HSI stock.  </li>
<li>Businesswise, nothing has changed and consensus earnings for Zhongsheng remain largely unchanged. It is all about positive re-rating of the Chinese markets. </li>
<li>Our fair value is raised to HKD16-20.5, based on historical mean PE of 9.4x and ceiling of 12x. Zhongsheng is still cheap and have further upside potential in our view. </li>
</ul>


Zhongsheng share price surged by 26% on Friday as investors warms up to China, and accumulate beaten down consumer stocks. Zhongsheng was the top performing HSI stock.  
Businesswise, nothing has changed and consensus earnings for Zhongsheng remain largely unchanged. It is all about positive re-rating of the Chinese markets. 
Our fair value is raised to HKD16-20.5, based on historical mean PE of 9.4x and ceiling of 12x. Zhongsheng is still cheap and have further upside potential in our view. 


Zhongsheng Group Holdings (881 HK, BUY, TP:HKD16.0-20.5): Long Overdue PoP, Still More Valuation Gap

<ul>
<li>
<a href="https://www.smartkarma.com/entities/tuhu-car-inc" target="_blank" data-smartkarma-citation="entities:36012:1" rel="noopener">Tuhu Car (9690 HK)</a> is poised to capture the lion share of China's automotive aftersales service industry that is forecasted to grow at 7.3% CAGR from 2023:30. </li>
<li>Tuhu is on an inflection of high earnings growth (+30% CAGR) as it has reached scalability, cost efficiency, and its younger shops are maturing profitably.    </li>
<li>Our fair value of HKD24 implies 25x FY25 PE - average for US peers. A bargain with 3-year CAGR of 30%, net cash, and churns high free cash flow.</li>
</ul>



Tuhu Car (9690 HK) is poised to capture the lion share of China's automotive aftersales service industry that is forecasted to grow at 7.3% CAGR from 2023:30. 
Tuhu is on an inflection of high earnings growth (+30% CAGR) as it has reached scalability, cost efficiency, and its younger shops are maturing profitably.    
Our fair value of HKD24 implies 25x FY25 PE - average for US peers. A bargain with 3-year CAGR of 30%, net cash, and churns high free cash flow.


Tuhu Car (9690 HK | BUY | TP:HKD24): Poised to Capture China's Auto Aftersales Service Market

Travelsky Technology Ltd H / Equity Bottom-Up

Travelsky Technology Limited provides information technology solutions for China's air travel and tourism industries.  The Company provides electronic travel distribution systems, or ETD, in China, develops airport passenger processing and air cargo systems, owns and operates real-time network for China's civil aviation industry, and operates Internet-based travel platform.

<ul>
<li>1H24 results was above expectation and showing good signs of cost control and topline recovery. We expect the momentum to continue. </li>
<li>Air traffic in China continues to grow strongly, with domestic travel leading the way. International traffic is picking up momentum, but still 23% gap to pre-Covid's numbers. </li>
<li>Revised fair value of HKD11.10 (+18% UPSIDE) is based on 2025 PE 12.5x (1SD below mean). </li>
</ul>


1H24 results was above expectation and showing good signs of cost control and topline recovery. We expect the momentum to continue. 
Air traffic in China continues to grow strongly, with domestic travel leading the way. International traffic is picking up momentum, but still 23% gap to pre-Covid's numbers. 
Revised fair value of HKD11.10 (+18% UPSIDE) is based on 2025 PE 12.5x (1SD below mean). 


Travelsky (696 HK | HOLD | TP:HKD11.0): Making Good Progress

Capital market veteran with 22 years experience with stints as an analyst (sell-side & buyside), investor relations and fund manager. 

My key expertise in the aviation sector. My definition of "aviation" includes airlines, travel tours, airports, airport retail & services, OEMs, online travel agents, aircraft lessors, air cargo/logistics, etc.   

I have an active watchlist consisting 190 companies across 41 countries. The aviation sector is highly cyclical and I am constantly evaluating signals to uncover attractive trade opportunities.