Equity Analyst

Steve Zhou, CFA

Equity Bottom-Up

ANTA Sports Products Limited designs, develops, manufactures, and markets sportswear, including sports footwear and apparel for professionals and the general public.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/anta-sports-products-ltd" target="_blank" data-smartkarma-citation="entities:10261:1" rel="noopener">Anta Sports Products (2020 HK)</a>, <a href="https://www.smartkarma.com/entities/li-ning-co-ltd" target="_blank" data-smartkarma-citation="entities:6047:1" rel="noopener">Li Ning (2331 HK)</a>, and <a href="https://www.smartkarma.com/entities/xtep-international-holdings" target="_blank" data-smartkarma-citation="entities:18118:1" rel="noopener">Xtep International (1368 HK)</a> have announced 1Q24 operational updates, with additional color given in post conference calls.  </li>
<li>Anta: Retail sales started to accelerate in mid-March, and March were better than January and February. </li>
<li>Li Ning:  offline retail sales down low-single-digit in 1Q24, driven by wholesale down mid-single-digit, while retail grew mid-single-digit.  E-commerce grew 20-30% yoy.  </li>
</ul>



Anta Sports Products (2020 HK), Li Ning (2331 HK), and Xtep International (1368 HK) have announced 1Q24 operational updates, with additional color given in post conference calls.  
Anta: Retail sales started to accelerate in mid-March, and March were better than January and February. 
Li Ning:  offline retail sales down low-single-digit in 1Q24, driven by wholesale down mid-single-digit, while retail grew mid-single-digit.  E-commerce grew 20-30% yoy.  


Anta/Li Ning/Xtep:  China Sportswear 1Q24 Update

Pop Mart International Group L / Equity Bottom-Up

Pop Mart International Group Limited operates as a toys wholesales company. The Company provides trendy toys designing, production, marketing, and other services. Pop Mart International Group markets its products worldwide.

<ul>
<li>The thesis for <a href="https://www.smartkarma.com/entities/pop-mart-international-group-l" target="_blank" data-smartkarma-citation="entities:29016:1" rel="noopener">Pop Mart International Group L (9992 HK)</a> is the successful expansion of its international business, which made up 13% of sales in 1H23 but is growing exponentially. </li>
<li>This has been proved true in the latest announced 2023 results, with a 135% growth in 2023 for the international business, and a further &gt;100% growth guidance for 2024.</li>
<li>The company is trading at 24x 2024 earnings, assuming a 35% net profit growth in 2024. </li>
</ul>


The thesis for Pop Mart International Group L (9992 HK) is the successful expansion of its international business, which made up 13% of sales in 1H23 but is growing exponentially. 
This has been proved true in the latest announced 2023 results, with a 135% growth in 2023 for the international business, and a further &gt;100% growth guidance for 2024.
The company is trading at 24x 2024 earnings, assuming a 35% net profit growth in 2024. 


Pop Mart (9992 HK):  International Expansion Is For Real

JD.com, Inc. is an online direct sales company in China. The Company offers a wide selection of products through its website and mobile applications. JD.com sells appliances, computers, digital products, communication products, garments, books, and household items to consumers and vendors.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/jd-com-inc" target="_blank" data-smartkarma-citation="entities:29043:1" rel="noopener">JD.com (9618 HK)</a> announced this week that it has repurchased 2.8% of the outstanding shares of the company in the first quarter of 2024. </li>
<li>Improved shareholder returns is a key thesis for the stock, given that there is little market expectation on such given limited track record.</li>
<li>A positive catalyst on full year performance could be the government's announced stimulus policy for home appliance in April this year (trading old for new).</li>
</ul>



JD.com (9618 HK) announced this week that it has repurchased 2.8% of the outstanding shares of the company in the first quarter of 2024. 
Improved shareholder returns is a key thesis for the stock, given that there is little market expectation on such given limited track record.
A positive catalyst on full year performance could be the government's announced stimulus policy for home appliance in April this year (trading old for new).


JD.com (JD US / 9618 HK):  Announced 2.8% Share Buyback In 1Q24 + My 1Q24 Preview

China Tourism Group Duty Free / Equity Bottom-Up

China Tourism Group Duty Free Corporation Limited engages in sales of duty free goods and tax goods. The Company sells tobacco, wine and spirits, perfume, cosmetics, fashion and accessories, watches, jewelry, food, luggage products,and other products. China Tourism Group Duty Free also engages in investment and development of tourism destination commercial complexes.

<ul>
<li>Since my previous insight on <a href="https://www.smartkarma.com/entities/china-tourism-group-duty-free" target="_blank" data-smartkarma-citation="entities:36229:1" rel="noopener">China Tourism Group Duty Free (1880 HK)</a> in October 2023, the stock has declined 33%, and year-to-date, the stock has declined 13%.</li>
<li>The company faces headwinds from continued overall weakness in Hainan duty free sales and potentially increased competition in Hainan.</li>
<li>The company already announced preliminary 1Q24 results, with sales down 9% yoy and net profit flat.  The company is trading at 18x 2024 earnings.</li>
</ul>


Since my previous insight on China Tourism Group Duty Free (1880 HK) in October 2023, the stock has declined 33%, and year-to-date, the stock has declined 13%.
The company faces headwinds from continued overall weakness in Hainan duty free sales and potentially increased competition in Hainan.
The company already announced preliminary 1Q24 results, with sales down 9% yoy and net profit flat.  The company is trading at 18x 2024 earnings.


China Tourism Group Duty Free (1880 HK):  Headwinds Persist

Alibaba Group Holding  / Equity Bottom-Up

Alibaba Group Holding Limited provides online sales services. The Company provides internet infrastructure, electronic commerce, online financial, and internet content services through its subsidiaries. Alibaba Group Holding offers its products and services worldwide.

<ul>
<li>It is well-known that Alibaba (ADR) (BABA US) is cheap (9x FY24 PE, fiscal year ending March; 8x FY23 free cash flow; net cash 25% of market cap).</li>
<li>Taking into account all of the major moving parts, I believe Alibaba can now be categorized as a good value stock. </li>
<li>Shareholder returns through buyback and dividend, minus stock-based compensation in 2023 calendar year equal to around 5% yield.</li>
</ul>


It is well-known that Alibaba (ADR) (BABA US) is cheap (9x FY24 PE, fiscal year ending March; 8x FY23 free cash flow; net cash 25% of market cap).
Taking into account all of the major moving parts, I believe Alibaba can now be categorized as a good value stock. 
Shareholder returns through buyback and dividend, minus stock-based compensation in 2023 calendar year equal to around 5% yield.


Alibaba (9988 HK):  Value Proposition Looks Clean

Over 13 years of professional experience covering mainly Asian consumer companies in sell-side and buy-side.

Steve Zhou, CFA
Equity Analyst

Anta/Li Ning/Xtep: China Sportswear 1Q24 Update

Anta Sports (2020 HK), Li Ning (2331 HK), and Xtep International (1368 HK) have announced 1Q24 operational updates, with additional color given in...

Steve Zhou, CFA

Pop Mart (9992 HK): International Expansion Is For Real

Pop Mart announced the 1Q24 operational update yesterday after market close. Sales grew 40-45% yoy in the quarter, as domestic China sales grew 20...

Steve Zhou, CFA

China Tourism Group Duty Free (1880 HK): Headwinds Persist

China Tourism Group Duty Free (1880 HK) stock has declined 33% since October 2023, facing challenges from weak Hainan duty free sales and...

Steve Zhou, CFA

Alibaba (9988 HK): Value Proposition Looks Clean

According to public news, Jack Ma has written a long post in Alibaba's internal website, titled "To reform, to innovation". This is the first...

Steve Zhou, CFA

Anta/Li Ning/Xtep: China Sportswear 1Q24 Update

Anta Sports (2020 HK), Li Ning (2331 HK), and Xtep International (1368 HK) have announced 1Q24 operational updates, with additional color given in...

Steve Zhou, CFA

Pop Mart (9992 HK): International Expansion Is For Real

Pop Mart announced the 1Q24 operational update yesterday after market close. Sales grew 40-45% yoy in the quarter, as domestic China sales grew 20...

Steve Zhou, CFA

JD.com (JD US / 9618 HK): Announced 2.8% Share Buyback In 1Q24 + My 1Q24 Preview

​JD.com repurchased 2.8% of its shares in 1Q24, aiming to boost shareholder returns with potential government stimulus for home appliances as a...

Steve Zhou, CFA

China Tourism Group Duty Free (1880 HK): Headwinds Persist

​China Tourism Group Duty Free (1880 HK) stock has declined 33% since October 2023, facing challenges from weak Hainan duty free sales and...

Steve Zhou, CFA

Alibaba (9988 HK): Value Proposition Looks Clean

According to public news, Jack Ma has written a long post in Alibaba's internal website, titled "To reform, to innovation". This is the first...

Steve Zhou, CFA

JD.com repurchased 2.8% of its shares in 1Q24, aiming to boost shareholder returns with potential government stimulus for home appliances as a...

China Tourism Group Duty Free (1880 HK) stock has declined 33% since October 2023, facing challenges from weak Hainan duty free sales and...