Greater China Equity Long/Short Analyst

Eric Chen

Equity Bottom-Up

Beijing Capital International Airport (BCIA) / Equity Bottom-Up

Beijing Capital International Airport (BCIA)

<ul>
<li>Market's muted response to the airport's worse-than-expected 1H24 losses suggest investors are looking beyond.</li>
<li>While non-aviation businesses will remain under pressure in the near-term, potential for earnings growth from fare hike could be significant and is not at all reflected at current valuation.</li>
<li>Free cash flow turning positive in 2024 also open to door for restoring dividend payments, which will be another catalyst for stock re-rating. Risk reward payoff gets increasingly positive.   </li>
</ul>


Market's muted response to the airport's worse-than-expected 1H24 losses suggest investors are looking beyond.
While non-aviation businesses will remain under pressure in the near-term, potential for earnings growth from fare hike could be significant and is not at all reflected at current valuation.
Free cash flow turning positive in 2024 also open to door for restoring dividend payments, which will be another catalyst for stock re-rating. Risk reward payoff gets increasingly positive.   


BCIA (694 HK): Risk Reward Payoff Gets Increasingly Attractive

Podcast by Magellan Asset Management, Magellan Asset Management

MAGELLAN - IN THE KNOW

Podcast by Magellan Asset Management

Magellan Asset Management

‘In The Know’ is a new monthly investment podcast brought to you by Magellan Asset Management, one of Australia’s leading global equities investors. We seek to bring you timely, unique and thought-provoking insights to help you make sense of today’s investment landscape. From deep dives into the latest macroeconomic and geopolitical issues, to our analysis on sectors and stocks on global markets. Join Magellan, as they connect with a myriad of experts in their field, including CEOs of stocks we hold, global leaders and consultants in finance, investing, risk and politics, and key members of our investment team and business. ‘In The Know’ - a monthly podcast from Magellan is worth investing your time in! Magellan - Experts in global investing.

Thematic (Sector/Industry)

<ul>
<li>Gerald Stack, Ben McVicar, and Ofa Karlina discuss investing in infrastructure and the opportunities it offers</li>
<li>Infrastructure assets provide essential services like energy, water, and transport, leading to reliable and predictable long-term demand</li>
<li>Short-term problems or opportunities in infrastructure companies can impact share prices, creating investment opportunities for savvy investors</li>
</ul>
<p><em>This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.</em></p>


Gerald Stack, Ben McVicar, and Ofa Karlina discuss investing in infrastructure and the opportunities it offers
Infrastructure assets provide essential services like energy, water, and transport, leading to reliable and predictable long-term demand
Short-term problems or opportunities in infrastructure companies can impact share prices, creating investment opportunities for savvy investors

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

Lessons Learnt from Investing in Essential Services

<ul>
<li>Recent newsflow and company results suggest China outbound travel is on track to recover to pre-pandemic level by the end of this year.</li>
<li>China airports have different exposures to outbound travel, which largely determines the scale of their duty-free shopping business and earnings upside amidst this recovery cycle.</li>
<li>Beijing Capital Airport offers best risk/return profile among listed China airports in our view as current valuation does not fully capture even a conservative scenario of recovery in outbound travel.</li>
</ul>


Recent newsflow and company results suggest China outbound travel is on track to recover to pre-pandemic level by the end of this year.
China airports have different exposures to outbound travel, which largely determines the scale of their duty-free shopping business and earnings upside amidst this recovery cycle.
Beijing Capital Airport offers best risk/return profile among listed China airports in our view as current valuation does not fully capture even a conservative scenario of recovery in outbound travel.


China Airports: Beijing Capital Airport Offers Best Risk/Return Payoff

Global Mobility/Transport, Equity Long-Short

Mohshin Aziz

China Tourism Group Duty Free Corp Ltd / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/china-tourism-group-duty-free-corp-ltd" target="_blank" data-smartkarma-citation="entities:12278:1" rel="noopener">China Tourism Group Duty Free Corp Ltd (601888 CH)</a> (CTG) announced last week a new supplementary contract for its duty-free airport businesses in Beijing and Shanghai airports</li>
<li>The new deal aims to promote collaborations between the airports and CTG, acting like true partners. However, we think it is more positive for airports and slight detriment to CTG</li>
<li>Maintain our Bullish call with an unchanged target price of CNY106 (+27% UPSIDE), based on the company's lowest recorded PE ratio in the past 10 years of 23.2x into FY24</li>
</ul>



China Tourism Group Duty Free Corp Ltd (601888 CH) (CTG) announced last week a new supplementary contract for its duty-free airport businesses in Beijing and Shanghai airports
The new deal aims to promote collaborations between the airports and CTG, acting like true partners. However, we think it is more positive for airports and slight detriment to CTG
Maintain our Bullish call with an unchanged target price of CNY106 (+27% UPSIDE), based on the company's lowest recorded PE ratio in the past 10 years of 23.2x into FY24


China Tourism Group (601888 CH | BUY | CNY): New Duty-Free Contracts with Airports, Slight Negative

HK/China Equity Long-Short

Osbert Tang, CFA

<ul>
<li>Data from <a href="https://www.smartkarma.com/entities/trip-com-group-ltd-23a341d0-4f63-4175-a8c5-ee990906cacd" target="_blank" data-smartkarma-citation="entities:36424:1" rel="noopener">Trip.com Group (9961 HK)</a> showed good improvement in travel demand for the 2024 New Year holidays. The volume of various orders has surged between 2x and 5x YoY. </li>
<li>Aggregate net profit for the tourism and hospitality sector has turned around to Rmb20.4bn in 3Q23, from losses of Rmb24.7bn a year ago, demonstrating solid profitability recovery.</li>
<li>An average of 32% drop in the sector's share price YTD is unjustified. We like <a href="https://www.smartkarma.com/entities/tongcheng-travel-holdings-ltd" target="_blank" data-smartkarma-citation="entities:27363:1" rel="noopener">Tongcheng Travel (780 HK)</a>, <a href="https://www.smartkarma.com/entities/air-china-ltd-h" target="_blank" data-smartkarma-citation="entities:8239:1" rel="noopener">Air China (H) (753 HK)</a> and <a href="https://www.smartkarma.com/entities/fosun-tourism-group" target="_blank" data-smartkarma-citation="entities:27439:1" rel="noopener">Fosun Tourism (1992 HK)</a>.  </li>
</ul>


Data from Trip.com Group (9961 HK) showed good improvement in travel demand for the 2024 New Year holidays. The volume of various orders has surged between 2x and 5x YoY. 
Aggregate net profit for the tourism and hospitality sector has turned around to Rmb20.4bn in 3Q23, from losses of Rmb24.7bn a year ago, demonstrating solid profitability recovery.
An average of 32% drop in the sector's share price YTD is unjustified. We like Tongcheng Travel (780 HK), Air China (H) (753 HK) and Fosun Tourism (1992 HK).  


China Tourism and Hospitality Industry: Boom in 2024 New Year Travel Demand

China

Shanghai International Airport Co., Ltd. operates Pudong Airport and Hongquiao airport in Shanghai.   The Company provides a full range of services including air traffic control, terminal management, cargo handling, advertising, space rental, and other related services.

Shanghai International Airport (600009 CH)

Price Gauge
52-week Range	0.00 - 0.00
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Shanghai International Airport (600009 CH)

BCIA (694 HK): Risk Reward Payoff Gets Increasingly Attractive

Market's muted response to weaker-than-expected 1H24 preliminary results suggest investors are looking beyond. Potential price hikes and resumption...

Eric Chen

Lessons Learnt from Investing in Essential Services

The podcast explores the benefits of investing in infrastructure assets for reliable long-term cash flows and opportunities for growth.

MAGELLAN - IN THE KNOW

China Airports: Beijing Capital Airport Offers Best Risk/Return Payoff

China outbound travel is set to recover to pre-pandemic levels by year-end, with Beijing Capital Airport offering the best risk/return profile...

Eric Chen

China Tourism Group (601888 CH | BUY | CNY): New Duty-Free Contracts with Airports, Slight Negative

China Tourism Group has signed a new contract to promote collaborations with airports in Beijing and Shanghai. Market sees it as negative, but we...

Mohshin Aziz

China Tourism and Hospitality Industry: Boom in 2024 New Year Travel Demand

China's National Immigration Administration estimates there will be 1.56m travelers passing through immigration during the 2024 Chinese New Year...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

BCIA (694 HK): Risk Reward Payoff Gets Increasingly Attractive

Market's muted response to weaker-than-expected 1H24 preliminary results suggest investors are looking beyond. Potential price hikes and resumption...

Eric Chen

Lessons Learnt from Investing in Essential Services

The podcast explores the benefits of investing in infrastructure assets for reliable long-term cash flows and opportunities for growth.

MAGELLAN - IN THE KNOW

China Airports: Beijing Capital Airport Offers Best Risk/Return Payoff

​China outbound travel is set to recover to pre-pandemic levels by year-end, with Beijing Capital Airport offering the best risk/return profile...

Eric Chen

China Tourism Group (601888 CH | BUY | CNY): New Duty-Free Contracts with Airports, Slight Negative

​China Tourism Group has signed a new contract to promote collaborations with airports in Beijing and Shanghai. Market sees it as negative, but we...

Mohshin Aziz

China Tourism and Hospitality Industry: Boom in 2024 New Year Travel Demand

China's National Immigration Administration estimates there will be 1.56m travelers passing through immigration during the 2024 Chinese New Year...

Osbert Tang, CFA

China outbound travel is set to recover to pre-pandemic levels by year-end, with Beijing Capital Airport offering the best risk/return profile...

China Tourism Group has signed a new contract to promote collaborations with airports in Beijing and Shanghai. Market sees it as negative, but we...