In today’s briefing:
- Anta/Li Ning/Xtep: China Sportswear 1Q24 Update
- Horizon Robotics Pre-IPO – The Positives – Rapid Revenue Growth
- Tiantan (600161CH) To Acquire Weiguang (002880CH)- New King Rises in China’s Blood Products Industry
- Horizon Robotics Pre-IPO – The Negatives – Large Part of the Growth Stems from Its JV
- Fosun Tourism (1992 HK): A Long-Awaited Upturn
- Meituan (3690 HK): Lack of Clear Topline Driver Remains a Concern
Anta/Li Ning/Xtep: China Sportswear 1Q24 Update
- Anta Sports Products (2020 HK), Li Ning (2331 HK), and Xtep International (1368 HK) have announced 1Q24 operational updates, with additional color given in post conference calls.
- Anta: Retail sales started to accelerate in mid-March, and March were better than January and February.
- Li Ning: offline retail sales down low-single-digit in 1Q24, driven by wholesale down mid-single-digit, while retail grew mid-single-digit. E-commerce grew 20-30% yoy.
Horizon Robotics Pre-IPO – The Positives – Rapid Revenue Growth
- Horizon Robotics is looking to raise US$500m in its upcoming Hong Kong IPO. The bookrunners on the deal are GS, MS and China Securities.
- Horizon Robotics (HR) is a provider of advanced driver assistance systems (ADAS) and autonomous driving (AD) solutions for passenger vehicles, empowered by its proprietary software and hardware technologies.
- In this note, we talk about the positive aspects of the deal.
Tiantan (600161CH) To Acquire Weiguang (002880CH)- New King Rises in China’s Blood Products Industry
- Guangming District State-owned Assets Supervision and Administration Bureau reached a cooperation agreement with China National Biotec to establish a joint venture, which will become the new controlling shareholder of Weiguang.
- Since Tiantan is already Sinopharm’s subsidiary, there will be horizontal competition issue in the field of blood product business between Tiantan and Weiguang, mainly due to significant business overlap.
- Some spin-offs and integrations are expected between Tiantan and Weiguang. As the reform of SOE enters a new stage, the two companies could end up very different.
Horizon Robotics Pre-IPO – The Negatives – Large Part of the Growth Stems from Its JV
- Horizon Robotics is looking to raise US$500m in its upcoming Hong Kong IPO. The bookrunners on the deal are GS, MS and China Securities.
- Horizon Robotics (HR) is a provider of advanced driver assistance systems (ADAS) and autonomous driving (AD) solutions for passenger vehicles, empowered by its proprietary software and hardware technologies.
- In this note, we talk about the not-so-positive aspects of the deal.
Fosun Tourism (1992 HK): A Long-Awaited Upturn
- Fosun Tourism (1992 HK) saw a healthy 15.8% overall business volume growth in 1Q24, with net profit sustaining improvement. This should justify a catch-up in share price.
- The cumulative bookings for Club Med for 1H24 have increased 13% YoY, while those for 2H24 have increased 10%. Positive forward bookings indicate an encouraging outlook.
- Four new Club Med resorts to be opened in 2024 and the increase in attractiveness of Hainan after it turns into a duty-free island by 2025 are both drivers.
Meituan (3690 HK): Lack of Clear Topline Driver Remains a Concern
- Meituan has navigated through its most challenging period since IPO as competition moderates and reorg comes close to completion.
- 1Q results should kick off an upward earnings cycle through to the end of 2024 when the company’s efforts to revamp loss-making new initiative businesses gather pace.
- That said, lack of clear topline driver remains the key reason for our cautious view about the sustainability of re-rating. Maintain neutral.
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