In today’s briefing:
- [Alibaba (BABA US, SELL, TP US$66) TP Change]: What It Takes for Us to Be More Positive on BABA?
- StubWorld: Union Stikes Impact MGM; MGM China Tops Pre-Covid Numbers
- ZJLD Group (6979 HK): Fundamentals Intact; Share Price Wrongfully Punished
- Vanke Offloads Shanghai Mall at Discount
- EQD | HSI Rally: Possible Brief Stop This Week
[Alibaba (BABA US, SELL, TP US$66) TP Change]: What It Takes for Us to Be More Positive on BABA?
- BABA reported C4Q23 top line, non-GAAP operating profit and GAAP net income in-line, 3.8% and (71)% vs. our estimates.
- The discrepancy between non-GAAP operating and GAAP net is due to restructuring charges;
- A few clients asked what it would take to be more positive on BABA. To us, grasp of its situation and alignment of the organization must happen first…
StubWorld: Union Stikes Impact MGM; MGM China Tops Pre-Covid Numbers
- MGM China Holdings (2282 HK)‘s FY23 top line surpasses pre-Covid levels. MGM Resorts International (MGM US) figures hit by union strike at MGM Grand Detroit.
- Preceding my comments on MGM are the current setup/unwind tables for Asia-Pacific Holdcos.
- These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.
ZJLD Group (6979 HK): Fundamentals Intact; Share Price Wrongfully Punished
- Many China consumer stocks, including ZJLD Group (6979 HK), have been sold off heavily in the past 6 months, primarily driven by a fear of deflation and weak consumer sentiment.
- ZJLD Group is one of the exceptions, with fundamentals intact while share price heavily sold off.
- Shares look attractive vs. its high growth rate and strong management team, and especially with the return of Southbound connect post holidays.
Vanke Offloads Shanghai Mall at Discount
- China Vanke Co. Ltd. is selling its entire stake in a Shanghai retail complex to Link Real Estate Investment Trust (Link Reit) at a discount, as the indebted developer offloads assets to ease liquidity crunch.
- Hong Kong-listed Link Reit, Asia’s largest real estate investment trust, said in a Friday filing that it agreed to acquire a 50% stake in Qibao Vanke Plaza from Vanke at 2.38 billion yuan ($334 million).
- Link Reit already owns the remaining 50% stake in the plaza after a 2.77-billion-yuan purchase from Vanke’s partner GIC Pte. Ltd. in April 2021.
EQD | HSI Rally: Possible Brief Stop This Week
- The Hang Seng Index is rallying as anticipated in a previous insight, but it could stop this week and pullback a bit.
- 3 possible trades available: go SHORT and hold to profit from a re-start of the downtrend, go SHORT and close after 1 week, wait the pullback and go LONG.
- It’s unclear at the moment if the index will go lower or rebound after the upcoming pullback.
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