In today’s briefing:
- Tesla Posted Strong Q1 Results (Thanks to China)/Elon Is Looking For Other People’s Money
- Hong Kong F&B: Stock Screening As Social-Distancing Curbs Ease
- JD.com (9618) Support Break to Reach Our Buy Zone
- Campus Activewear IPO – Peer Comparison-Competitive Market, Firm Has Been Resilient During Pandemic
- Campus Activewear Pre-IPO – Synergistic Business Model, but in a Fragmented Industry
- Shiseido: Shanghai Lockdown Adds Pressure to Faltering Japanese Cosmetics
- Laughing Water Capital Q1 2022 Letter
- Fosun Tourism (1992 HK): Well Geared Towards Global Travel Recovery
Tesla Posted Strong Q1 Results (Thanks to China)/Elon Is Looking For Other People’s Money
- Tesla should probably thank its China operations for another record quarter as strong pricing and lag in hits from cost inflation made profits soar.
- Next quarter will be tougher as China’s business conditions rapidly deteriorate amid the worst Covid surge in two years.
- Meanwhile, CEO Elon Musk is on the hunt for cash to buy Twitter.
Hong Kong F&B: Stock Screening As Social-Distancing Curbs Ease
- Hong Kong’s hospitality industry has endured three years of upheaval, first with the democracy protestors in 2019, which slowed inbound, followed by the onset of Covid in early 2020.
- Beginning today, 21 April, the Government commenced the relaxation of most social distancing measures, to be eased over three phases.
- This evolving dynamic is welcome, yet the progress and recovery for many operators may be gradual.
JD.com (9618) Support Break to Reach Our Buy Zone
- JD.com met our 240+ short zone and has gapped below immediate 215 support, opening the way for C wave decline to our target and buy zone near 180.
- RSI trendline rejection sets up a slide to the sub 30 area which mean we will at least hit 180 if not reach for 160.
- Holding the 160 low sets up an intermediate long trade. Be aware that there will be some wide tactical swing over the turbulent summer cycle.
Campus Activewear IPO – Peer Comparison-Competitive Market, Firm Has Been Resilient During Pandemic
- Campus Activewear Ltd (1535013D IN) is looking to raise about US$184m in its India IPO, via a 100% secondary selldown.
- While there are other domestically listed footwear makers, Campus’ competitors generally market a broader product offering, ranging from casual, formal or outdoor shoes etc..
- Campus’ performance was amongst the most resilient during the pandemic, but its margins continues to trail peers.
Campus Activewear Pre-IPO – Synergistic Business Model, but in a Fragmented Industry
- Campus Activewear Ltd (1535013D IN) is looking to raise about US$200m in its India IPO, via a 100% secondary selldown.
- Campus Activewear is a lifestyle-oriented sports and athleisure footwear firm based in India.
- Operating under the “CAMPUS” brand, the firm offers a diverse portfolio of styles, color palettes, and price points.
Shiseido: Shanghai Lockdown Adds Pressure to Faltering Japanese Cosmetics
- The market position of Japanese cosmetics in China is weakening with Japanese exports declining around 5.0% YoY in January and February 2022.
- With Shanghai under a strict lockdown and the recovery of inbound demand taking more time than expected, it is possible that Shiseido Company (4911 JP) could downgrade its 2022 guidance.
- These forces could take Shiseido’s valuation multiples to the pre-2013 level, resulting in a downside of close to 30%.
Laughing Water Capital Q1 2022 Letter
- Laughing Water Capital returned approximately -12.5% in the first quarter of 2022.
- Most of the quarter our results tracked the indexes pretty closely, but as the indexes rallied into quarter end, our portfolio did not.
Fosun Tourism (1992 HK): Well Geared Towards Global Travel Recovery
- Fosun Tourism (1992 HK) (FTG) is not a China play and, instead, it has excellent exposure to the global travel industry recovery particularly through its ownership in Club Med.
- 1Q22 showcased a very solid 306.6% rebound in business volume of resorts and tourism destination operations and tourism and leisure services and solutions business, and the trend will continue.
- We think Club Med’s exposure to overseas recovery, Atlantis Sanya’s ride on domestic demand and new resorts’ good position to capture China’s travel recovery are key drivers for FTG.
Before it’s here, it’s on Smartkarma
