In this briefing:
- HK Connect Discovery Weekly: PICC, Xinyi Solar (2019-03-08)
- Japan Tobacco: No Dire Consequences Despite Late Entry to Heated Tobacco
1. HK Connect Discovery Weekly: PICC, Xinyi Solar (2019-03-08)
In our Discover HK Connect series, we aim to help our investors understand the flow of southbound trades via the Hong Kong Connect, as analyzed by our proprietary data engine. We will discuss the stocks that experienced the most inflow and outflow by mainland investors in the past seven days.
We split the stocks eligible for the Hong Kong Connect trade into three groups: component stocks in the HSCEI index, stocks with a market capitalization between USD 1 billion and USD 5 billion, and stocks with a market capitalization between USD 500 million and USD 1 billion.
In this insight, we will highlight PICC and Xinyi Solar.
2. Japan Tobacco: No Dire Consequences Despite Late Entry to Heated Tobacco
- Late entry to Japanese heated tobacco market resulted in Japan Tobacco (2914 JP) losing market share to peers
- New product launches to give Japan Tobacco a fighting chance against IQOS
- Early maturity of heated tobacco in Japan: a blessing in disguise for Japan Tobacco
- Pricing power is expected to be back on track in future
- PloomTECH will soon be ready to compete with IQOS at a global level
- More product offerings targeting different customer needs in reduced risk products category
- International segment volume growth driven by global flagship brands and acquisitions
- Market unjustly penalising Japan Tobacco for the early maturity of heated tobacco segment
- Transformation of dividend yield from industry worst to industry best
- Undervalued at 10.09x EV/Forward EBIT: DCF target price yields 21.8% upside
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