In today’s briefing:
- BEA – Far Worse Deterioration in Hong Kong than Other Regions & Sharply Lower HFD Centa City Index
- [XPeng Inc. (XPEV US, SELL, TP US$2) Earnings Review]: Delivery Goal for MONA M03 Is Unrealistic
- Innovent Biologics (1801 HK) Adds to Its Oncology Portfolio
- SITC International (1308 HK): Advancing Amid the Challenging Time
- Morning Views Asia: Sunny Optical Technology Group, Xiaomi Corp
- Full Truck Alliance Q224 Results: Generally Strong Growth | Attractive Closer to US$7 Per ADS
- Legend Biotech: Achieving Regulatory Milestones and Market Approval! – Major Drivers
- [Vipshop (VIPS US, BUY, TP US$14.5) TP Change]: Buying for Dividend Yield and Cash Flow Yield
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BEA – Far Worse Deterioration in Hong Kong than Other Regions & Sharply Lower HFD Centa City Index
- Data from Bank of East Asia (23 HK) is just out with poor 1H24 results YoY
- Notable in its release are its Hong Kong overdue exposure by over three months
- Hong Kong region income is the worst affected by credit costs, this does not seem to be over
[XPeng Inc. (XPEV US, SELL, TP US$2) Earnings Review]: Delivery Goal for MONA M03 Is Unrealistic
- XPeng (XPEV) reported C2Q24 top line, non-GAAP operating loss and GAAP net income in line, 5.4% worse and 7.5% better than our estimate.
- We raised our MONA forecast by 13% but still significantly below XPEV’s guidance. We believe management guidance is overly optimistic;
- We maintain a SELL rating on the stock and TP unchanged.
Innovent Biologics (1801 HK) Adds to Its Oncology Portfolio
- Dupert, a drug for the special treatment of non-small cell cancer has been approved by the NMPA.
- In 2022, China recorded the highest number of new cancer cases, and their exceptional high incidence of smoking is of particular concern.
- Innovent’s portfolio of nine oncology drugs is very attractive in the biggest cancer market.
SITC International (1308 HK): Advancing Amid the Challenging Time
- SITC International (1308 HK)‘s management guided for a promising outlook for 2H24, with strong load performance in Jul-Aug, and better long-term contract rates YoY.
- Gross margin expanded 4.5pp in 1H24 despite a 5.3% drop in average freight rate, thanks to good cost control with lower chartered-in costs and more self-owned vessels.
- Net cash increased 195% from end-FY23, and we are confident that its 70% payout ratio can be maintained. Its P/B is still below the 5-year average.
Morning Views Asia: Sunny Optical Technology Group, Xiaomi Corp
Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.
Full Truck Alliance Q224 Results: Generally Strong Growth | Attractive Closer to US$7 Per ADS
- Another set of strong results from YMM, revenue and core earnings both up
- Need to monitor orders per MAU; reason for decline in Q224 unclear
- Maintain US$9.45/ADS target price, ADSs are attractive closer to US$7
Legend Biotech: Achieving Regulatory Milestones and Market Approval! – Major Drivers
- Legend Biotech, during their second quarter 2024 earnings call, presented a detailed insight into its operations, financial health, and the strides it’s making in the pharmaceutical space, particularly regarding CARVYKTI, their FDA-approved treatment for multiple myeloma.
- The company reported an 18.5% quarter-over-quarter revenue growth amounting to $186 million for CARVYKTI, which marks a robust 60% increase year-over-year.
- Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.
[Vipshop (VIPS US, BUY, TP US$14.5) TP Change]: Buying for Dividend Yield and Cash Flow Yield
- Vipshop reported C2Q24 revenue and profit were in-line vs. the street, but the mid-point of C3Q revenue guide missed by 8% due to soft apparel demand;
- VIPS has been post growth for some time. However, its healthy cash flow ensures a 75% dividend payout ratio as promised by the company.
- We cut our CY24 EPS estimate by 8.4% due to soft apparel demand, leading to a US$ 14.5 TP, but maintain BUY on a post-subsidy recovery.