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In today’s briefing:
- BYD (1211 HK): All NEV Stocks Plunged After Strong Industry Data – Opportunity Coming
- [Alibaba (BABA US, SELL, TP US$68) TP Change]: Return to Taobao Is a Return to Lower Take-Rate
- Quiddity Leaderboard CSI 300/500 Jun 24: Some Changes in Rankings; US$2.3bn One-Way
- Zhubajie Pre-IPO Tearsheet
- BYD Vs Tesla: Part Deux
- China Catering: Channel Checks Reinforcing Our Bullish View on DPC Dash
- Sa Sa Intl (178 HK): A Slow Recovery But……
- Morning Views Asia:
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BYD (1211 HK): All NEV Stocks Plunged After Strong Industry Data – Opportunity Coming
- NEV sales volume grew by 47% YoY in December 2023 and 36% in 2023.
- BYD’s sale volume grew by 62%, higher than the industry average, 36%, in 2023.
- All NEV stocks plunged, but we still believe BYD has an upside of 61%.
[Alibaba (BABA US, SELL, TP US$68) TP Change]: Return to Taobao Is a Return to Lower Take-Rate
- We expect BABA to report CY4Q23 top-line, adjusted EBITA and non-GAAP net income (3.2%), (7.1%) and (3.0%) vs. consensus.
- We estimate Taobao/Tmall GMV grew 2.4%, but was offset by lower take-rate, we expect;
- BABA’s “Return to Taobao” strategy tilts traffic to low-priced Taobao products to fight PDD for low-priced mindset.
Quiddity Leaderboard CSI 300/500 Jun 24: Some Changes in Rankings; US$2.3bn One-Way
- CSI 300 represents the 300 largest stocks by market capitalization and liquidity from the entire universe of Shanghai and Shenzhen Stock Exchanges. CSI 500 represents the next largest 500 names.
- In this insight, we take a look at the potential ADDs/DELs for the CSI 300 and CSI 500 rebalance in June 2024.
- Since my December 2023 insight, a couple of names have left the CSI 300 Expected ADDs basket and have been replaced by two other names.
Zhubajie Pre-IPO Tearsheet
- Zhubajie Co Ltd (ZHUHKZ HK) is looking to raise at least US$100m in its upcoming Hong Kong IPO. The bookrunners on the deal are Citic Securities, and CCB International.
- Zhubajie (ZBJ) is a customized enterprise services e-commerce platform in China.
- The firm focuses on using technologies to match the service demands of enterprise clients with the skills of service providers, facilitating transactions between its ZBJ platform.
BYD Vs Tesla: Part Deux
- BYD (1211 HK) overtook Tesla Motors (TSLA US) as the largest EV maker by deliveries in December 2023.
- Tesla is suspending work at its Berlin factory temporarily due to the tension in the Red Sea, while BYD’s supply chain is all in China.
- BYD is trading at deep discount to Tesla on PEG, PER, and PBR.
China Catering: Channel Checks Reinforcing Our Bullish View on DPC Dash
- We had conversations with industry consultants and business executives from China’s catering sector to understand the impact of the country’s weak economy on consumer behavior and sector outlook for 2024.
- We expect moderate pricing competition, continued rise of social media in generating online food orders and key industry players’ increased focus on smaller-size store formats.
- While we are still cautious about the sector in general, we reiterate bullish view on DPC Dash, which we believe will outperform and has potential to double in two years.
Sa Sa Intl (178 HK): A Slow Recovery But……
- 3Q FY24 sales of Sa Sa International Hldgs (178 HK) have recovered to 49% of the FY19 level. Although this is slower than market expectations, the improving trend remains intact.
- Stronger Rmb, more attractions in Hong Kong, resumption of “multiple-entry permits” for Shenzhen residents, and more new stores at Sa Sa will drive the rest of this year.
- Consensus forecasts are conservative, expecting FY24 earnings just 46% of FY19. With current share price down from HK$1.00-1.50 range during 2020, Sa Sa’s valuations are too depressed.
Morning Views Asia:
Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.