Research from Asian Century Stocks, Asian Century Stocks

Michael Fritzell

Research from Asian Century Stocks

Providing financial journalism in the Asia-Pacific

Asian Century Stocks

Asian Century Stocks is a newsletter providing financial journalism for companies and stocks in the Asia-Pacific. 
The Asian Century Stocks logotype “百” stands for “one hundred” or a “century”. The economic centre of gravity is moving towards Asia. Yet most global investors are missing out.

Equity Bottom-Up

<ul><li><a href="https://www.smartkarma.com/entities/prada-s-p-a" target="_blank" data-smartkarma-citation="entities:889" rel="noopener">Prada S.P.A. (1913 HK)</a> (1913 HK —US$18 billion) is a strange beast.</li><li>It’s an Italian fashion group listed in Hong Kong, of all places. Many European and American investors ignore the name, which has caused Prada to trade at a considerable discount to its peers.</li><li>The first Prada shop was opened in 1913 by Mario Prada, a former leather goods salesman who imported English handbags and travel accessories and sold them to the Italian elite.</li></ul>

Prada S.P.A. (1913 HK) (1913 HK —US$18 billion) is a strange beast.It’s an Italian fashion group listed in Hong Kong, of all places. Many European and American investors ignore the name, which has caused Prada to trade at a considerable discount to its peers.The first Prada shop was opened in 1913 by Mario Prada, a former leather goods salesman who imported English handbags and travel accessories and sold them to the Italian elite.

Prada (1913 HK): High Fashion at 14x EV/Pretax Profit with an Alt-Data Catalyst

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

<ul>
<li>China ETF flows were steady for the week, however Southbound Connect flows were negative for the first time since February.</li>
<li><a href="https://www.smartkarma.com/entities/prada-s-p-a" target="_blank" data-smartkarma-citation="entities:889:1" rel="noopener">Prada S.P.A. (1913 HK)</a>  shares standout in the luxury brand sector as Miu Miu sales surged.  <a href="https://www.smartkarma.com/entities/wuxi-apptec-co-ltd-bf4a1265-beef-48b6-b82d-29308426030f" target="_blank" data-smartkarma-citation="entities:27795:1" rel="noopener">WuXi AppTec (2359 HK)</a> slightly beat estimates but still have BioSecure Act overhang.</li>
<li>Property development firms <a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Properties (101 HK)</a> and <a href="https://www.smartkarma.com/entities/wharf-holdings-ltd" target="_blank" data-smartkarma-citation="entities:51:1" rel="noopener">Wharf Holdings (4 HK)</a> were hurt by poor results, while <a href="https://www.smartkarma.com/entities/new-oriental-education-techn" target="_blank" data-smartkarma-citation="entities:32210:1" rel="noopener">New Oriental Education &amp; Techn (9901 HK)</a> saw earnings miss estimates.</li>
</ul>


China ETF flows were steady for the week, however Southbound Connect flows were negative for the first time since February.
Prada S.P.A. (1913 HK)  shares standout in the luxury brand sector as Miu Miu sales surged.  WuXi AppTec (2359 HK) slightly beat estimates but still have BioSecure Act overhang.
Property development firms Hang Lung Properties (101 HK) and Wharf Holdings (4 HK) were hurt by poor results, while New Oriental Education &amp; Techn (9901 HK) saw earnings miss estimates.


The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (August 2)

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

<ul><li>4Q results were a beat to us and consensus, with the quarter’s net revenue expanding by cFX +18.1%.</li><li>The strength was mainly driven by 82% growth in Miu Miu (vs CMBIe 50%+).</li><li>All regions marked robust growth, especially Japan (cFX +38%) and APAC (cFX +32%), when the US continued to record sequential improvement as we had expected. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

4Q results were a beat to us and consensus, with the quarter’s net revenue expanding by cFX +18.1%.The strength was mainly driven by 82% growth in Miu Miu (vs CMBIe 50%+).All regions marked robust growth, especially Japan (cFX +38%) and APAC (cFX +32%), when the US continued to record sequential improvement as we had expected. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Prada SpA (1913 HK) - 4Q23 CFX Revenue +18%; Miu Miu Overshot

<ul><li>We envisage that Prada will deliver another solid quarter with 12% cFX Group sales growth to EUR1.3bn, thanks to comparable growth in the retail segment, which, in our view, will regain its momentum by lapping on a sequentially easier comp of the quarter.</li><li>By region, Asia again is a major driver with cFX 20%+ growth supported by China’s recovering outbound tourism.</li><li>The same should also benefit Japan, which simultaneously enjoys tailwind from a favourable currency and sets to deliver cFX 35% sales growth. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We envisage that Prada will deliver another solid quarter with 12% cFX Group sales growth to EUR1.3bn, thanks to comparable growth in the retail segment, which, in our view, will regain its momentum by lapping on a sequentially easier comp of the quarter.By region, Asia again is a major driver with cFX 20%+ growth supported by China’s recovering outbound tourism.The same should also benefit Japan, which simultaneously enjoys tailwind from a favourable currency and sets to deliver cFX 35% sales growth. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Prada SpA (1913 HK) – 4Q Preview: CFX/Reported Sales +12.1%/6.4%

Cross Asset Strategy

<ul>
<li>Hong Kong market quietly broke its downward trend channel last week, however the HSI met strong resistance at 18200 (100 Week Moving Average).</li>
<li>
<a href="https://www.smartkarma.com/entities/picc-property-casualty-h" target="_blank" data-smartkarma-citation="entities:350:1" rel="noopener">PICC Property &amp; Casualty H (2328 HK)</a> and <a href="https://www.smartkarma.com/entities/china-petroleum-chemical-h" target="_blank" data-smartkarma-citation="entities:369:1" rel="noopener">China Petroleum &amp; Chemical (386 HK)</a> broke to new highs relative to MSCI indices.  Sinopec may benefit from stronger RMB in 2H24.
</li>
<li><a href="https://www.smartkarma.com/entities/shenzhou-intl-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:10415:1" rel="noopener">Shenzhou Intl Group Holdings (2313 HK)</a> had a short-term turnaround from its downtrend.  The company reported growth in sales and better margins in 2Q24.</li>
</ul>


Hong Kong market quietly broke its downward trend channel last week, however the HSI met strong resistance at 18200 (100 Week Moving Average).

PICC Property &amp; Casualty H (2328 HK) and China Petroleum &amp; Chemical (386 HK) broke to new highs relative to MSCI indices.  Sinopec may benefit from stronger RMB in 2H24.

Shenzhou Intl Group Holdings (2313 HK) had a short-term turnaround from its downtrend.  The company reported growth in sales and better margins in 2Q24.


Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 3)

Italy

Prada S.p.A. is an Italian fashion company that designs, manufactures, promotes and sells high-end leather goods, ready-to-wear and footwear through various brands.

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Prada S.P.A. (1913 HK)

Prada (1913 HK): High Fashion at 14x EV/Pretax Profit with an Alt-Data Catalyst

Prada (1913 HK —US$18 billion) is a strange beast. It’s an Italian fashion group listed in Hong Kong, of all places. Many European and American...

Asian Century Stocks

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (August 2)

Southbound Connect flows were negative for the first week since February. Prada benefited from a weak JPY and Wuxi AppTec beat estimates. HK...

David Mudd

Prada SpA (1913 HK) - 4Q23 CFX Revenue +18%; Miu Miu Overshot

All regions marked robust growth, especially Japan (cFX +38%) and APAC (cFX +32%), when the US continued to record sequential improvement as we had...

CMB International

Prada SpA (1913 HK) – 4Q Preview: CFX/Reported Sales +12.1%/6.4%

We envisage that Prada will deliver another solid quarter with 12% cFX Group sales growth to EUR1.3bn, thanks to comparable growth in the retail...

CMB International

Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 3)

Hong Kong market broke its downtrend however it met strong resistance just above 18k. PICC and Sinopec broke to new highs relative to MSCI...

David Mudd

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