In today’s briefing:
- Alibaba (BABA): Overly Impacted, Accumulate Before 3Q22 Result
- ZZ CRRC Times Electric (3898): Electrification
- Linmon Media (柠萌影业) Pre-IPO – Consistently Putting up a Good Show
- China Travel Intl Inv (308 HK): The Fruit Has Ripened?
- Pre-IPO Biocytogen Pharmaceuticals – The Novel Development Model Offset the Pipeline’s Shortcomings
Alibaba (BABA): Overly Impacted, Accumulate Before 3Q22 Result
- The stock price declined to a very low level before the market fell.
- The Chinese e-commerce market is still promising despite of the high comparison base last year.
- We believe the stock has an upside of 68% for March 2023.
ZZ CRRC Times Electric (3898): Electrification
- The new product in IGBT for NEV will be the main driver going ahead riding on the growing EV ecosystem in China.
- The recent sell-off provides a good entry point for new investors. For those who are already invested, it provides an opportunity to add at a better price.
- It is a lesser-known NEV name in China that is still trading at a lower valuation compared to the mega-cap names such as CATL and BYD.
Linmon Media (柠萌影业) Pre-IPO – Consistently Putting up a Good Show
- Linmon Media (LM HK) is looking to raise about US$300m in its upcoming Hong Kong IPO.
- Linmon Media (LM) is a content production firm that operates the full value chain of investment, production, distribution, promotion and derivatives licensing of drama series.
- In this note, we take a look at LM’s business, financials, and share our thoughts on the IPO.
China Travel Intl Inv (308 HK): The Fruit Has Ripened?
- Share price of China Travel International Investment Hong Kong (308 HK) (CTII) rallied 23% in last 3 months and 81% from its trough, which has well reflected the FY21 turnaround.
- Risk-Return profile looks less attractive as its P/B multiple of 0.56x only provides 14% upside to the historical average of 0.63x. In other words, safety margin has diminished.
- Macro picture turned against CTII – weaker-than-expected CNY visitors in Shenzhen, escalating Omicron cases in Hong Kong and caution on domestic tourism outlook all point to a more challenging FY22.
Pre-IPO Biocytogen Pharmaceuticals – The Novel Development Model Offset the Pipeline’s Shortcomings
- The candidates in Biocytogen’s pipeline do not have advantages in development progress and also have to face fierce competition, so continuous large R&D investment in the future would be inevitable.
- However, the development model of Biocytogen is very novel and special, which could make it a rare target in the market if it is successfully listed.
- Therefore, the certainty of Biocytogen’s future growth is expected to improve gradually, and the mid- and long-term investment value would continue to increase due to the high moat.
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