Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

<ul>
<li>Hong Kong markets continue to outperform this year with the HSCEI up 30% year to date.  Market breadth continues to be healthy with 80% of stocks over &gt; 200 DMA.</li>
<li>
<a href="https://www.smartkarma.com/entities/xpeng-inc-4cc65854-d10c-4d20-bf7e-ca0e016715ff" target="_blank" data-smartkarma-citation="entities:33772:1" rel="noopener">XPeng (9868 HK)</a> announced its new hybrid technology which gives vehicles a range of more than 870 miles (1400 Kms).  The company has delivered more than 120k vehicles YTD.</li>
<li>
<a href="https://www.smartkarma.com/entities/china-merchants-securities-co-4f5d644c-0051-426f-9706-eaa74b0ba280" target="_blank" data-smartkarma-citation="entities:22738:1" rel="noopener">China Merchants Securities Co Ltd (H) (6099 HK)</a> benefits from increased market turnover.   <a href="https://www.smartkarma.com/entities/yum-china-holdings-inc-0533692c-6dae-4014-baa1-ed0b050638f2" target="_blank" data-smartkarma-citation="entities:29259:1" rel="noopener">Yum China Holdings (9987 HK)</a> beat consensus for 3Q24 earnings and will continue its buyback program.</li>
</ul>


Hong Kong markets continue to outperform this year with the HSCEI up 30% year to date.  Market breadth continues to be healthy with 80% of stocks over &gt; 200 DMA.

XPeng (9868 HK) announced its new hybrid technology which gives vehicles a range of more than 870 miles (1400 Kms).  The company has delivered more than 120k vehicles YTD.

China Merchants Securities Co Ltd (H) (6099 HK) benefits from increased market turnover.   Yum China Holdings (9987 HK) beat consensus for 3Q24 earnings and will continue its buyback program.


The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (November 7)

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>3Q24 result was a strong beat, from sales to margin, to capital return program.</li><li>Going forward in 4Q24E, we remain optimistic and expect SSSG to turn around and margin to further improve, thanks to the excellent execution of various strategies like: 1) widening of customer base, 2) optimizing the delivery growth and 3) rolling out of more stores with new formats like K-coffee and Pizza Hut WOW.</li><li>Maintain BUY and raise TP to HK$ 451.11.</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.

3Q24 result was a strong beat, from sales to margin, to capital return program.Going forward in 4Q24E, we remain optimistic and expect SSSG to turn around and margin to further improve, thanks to the excellent execution of various strategies like: 1) widening of customer base, 2) optimizing the delivery growth and 3) rolling out of more stores with new formats like K-coffee and Pizza Hut WOW.Maintain BUY and raise TP to HK$ 451.11.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.

Yum China (9987 HK) - A Strong Beat once Again and We Are Optimistic

Investment Research - Asia Consumer Sector, Investory

Devi Subhakesan

Investment Research - Asia Consumer Sector

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/yum-china-holdings-inc-0533692c-6dae-4014-baa1-ed0b050638f2" target="_blank" data-smartkarma-citation="entities:29259:1" rel="noopener">Yum China Holdings (9987 HK)</a> reported a 33% YoY EPS growth on the back of 5% revenue growth for 3Q2024, showcasing robust shareholder value creation despite a challenging operating environment.</li>
<li>YumChina's 3Q results: New store additions and Innovative products continue to fire revenue growth despite challenging business environment; Operating margins improvement helped profit growth.</li>
<li>The company has plans to further step up the Capital returns program - a big driver in enhancing shareholder returns. </li>
</ul>



Yum China Holdings (9987 HK) reported a 33% YoY EPS growth on the back of 5% revenue growth for 3Q2024, showcasing robust shareholder value creation despite a challenging operating environment.
YumChina's 3Q results: New store additions and Innovative products continue to fire revenue growth despite challenging business environment; Operating margins improvement helped profit growth.
The company has plans to further step up the Capital returns program - a big driver in enhancing shareholder returns. 


Yum China: Durian Pizza to Share Repurchase - Art of Delivering Shareholder Value

Analyst

Steve

<ul>
<li>China's catering industry has changed compared to pre-COVID19, where overall average selling price (ASP) is continually under pressure, and customers are increasing seeking value-for-money options due to weaker consumer sentiment. </li>
<li>Yum China's same-store-sales growth could be under pressure if the company cannot raise ASP easily like in previous years.  </li>
<li>Yum China's historical valuation should not be used as a benchmark, given that the growth profile has changed (new store openings reaching a plateau; sustained increased competition; lower ASP pressure). </li>
</ul>


China's catering industry has changed compared to pre-COVID19, where overall average selling price (ASP) is continually under pressure, and customers are increasing seeking value-for-money options due to weaker consumer sentiment. 
Yum China's same-store-sales growth could be under pressure if the company cannot raise ASP easily like in previous years.  
Yum China's historical valuation should not be used as a benchmark, given that the growth profile has changed (new store openings reaching a plateau; sustained increased competition; lower ASP pressure). 


Yum China (9987 HK/YUMC US):  Earnings And Derating Risks Not Priced In

<ul>
<li>The epicenter of the Asian ETF selloff last week was Japan, recording an outflow of nearly $100B from equity funds taking the net flows back to breakeven for the YTD.</li>
<li>
<a href="https://www.smartkarma.com/entities/seazen" target="_blank" data-smartkarma-citation="entities:14882:1" rel="noopener">Seazen (Formerly Future Land) (1030 HK)</a> and <a href="https://www.smartkarma.com/entities/swire-properties-ltd" target="_blank" data-smartkarma-citation="entities:5775:1" rel="noopener">Swire Properties (1972 HK)</a> had positive announcements 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> and <a href="https://www.smartkarma.com/entities/yum-china-holdings-inc-0533692c-6dae-4014-baa1-ed0b050638f2" target="_blank" data-smartkarma-citation="entities:29259:1" rel="noopener">Yum China Holdings (9987 HK)</a> announced earnings.
</li>
<li>
<a href="https://www.smartkarma.com/entities/china-unicom-hong-kong-ltd" target="_blank" data-smartkarma-citation="entities:1016:1" rel="noopener">China Unicom Hong Kong (762 HK)</a> shares are under pressure as the telco sector goes through a price war in cloud services and investors take profits from high dividend names.
</li>
</ul>


The epicenter of the Asian ETF selloff last week was Japan, recording an outflow of nearly $100B from equity funds taking the net flows back to breakeven for the YTD.

Seazen (Formerly Future Land) (1030 HK) and Swire Properties (1972 HK) had positive announcements while New Oriental Education &amp; Techn (9901 HK) and Yum China Holdings (9987 HK) announced earnings.


China Unicom Hong Kong (762 HK) shares are under pressure as the telco sector goes through a price war in cloud services and investors take profits from high dividend names.



The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (August 10)

China

Yum China Holdings, Inc. operates chain restaurants. The Company offers pizza, entrees, pasta, rice dishes, appetizers, soups, vegetables, beverages, and desserts. Yum China Holding conducts its business worldwide.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Yum China Holdings (9987 HK)

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (November 7)

Hong Kong markets are among the top performers this year. Short selling has declined as Southbound buying increases. Xpeng introduced a new hybrid...

David Mudd

Yum China (9987 HK) - A Strong Beat once Again and We Are Optimistic

Going forward in 4Q24E, we remain optimistic and expect SSSG to turn around and margin to further improve, thanks to the excellent execution of...

CMB International

Yum China (9987 HK/YUMC US): Earnings And Derating Risks Not Priced In

According to public news, several sell-side have come out with reports adjusting down estimates for the name in the last few days, citing negative...

Steve

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (August 10)

Japan had massive outflows in equity ETF's for the week. Property firms Seazen and Swire Properties had positive earnings news. New Oriental and...

David Mudd

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (November 7)

Hong Kong markets are among the top performers this year. Short selling has declined as Southbound buying increases. Xpeng introduced a new hybrid...

David Mudd

Yum China (9987 HK) - A Strong Beat once Again and We Are Optimistic

Going forward in 4Q24E, we remain optimistic and expect SSSG to turn around and margin to further improve, thanks to the excellent execution of...

CMB International

Yum China: Durian Pizza to Share Repurchase - Art of Delivering Shareholder Value

Well positioned to benefit from potential growth in retail spend and consumer confidence with effective deployment of announced stimulus package.

Devi Subhakesan

Yum China (9987 HK/YUMC US): Earnings And Derating Risks Not Priced In

According to public news, several sell-side have come out with reports adjusting down estimates for the name in the last few days, citing negative...

Steve

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (August 10)

Japan had massive outflows in equity ETF's for the week. Property firms Seazen and Swire Properties had positive earnings news. New Oriental and...

David Mudd