In today’s briefing:
- China Comm Const (1800 HK): Robust Growth Prospects Accelerating
- High Dividend Yield, Expansion Outside China, Listed HK Apparel/Footwear Stocks Screener
- [Blue Lotus New Energy Sector Update]: Rocky but Firm: China New Energy’s Venture Overseas
- Legend Biotech (LEGN.US) Offer Update – Some New Information About the Takeover Worth the Attention
China Comm Const (1800 HK): Robust Growth Prospects Accelerating
- China Communications Construction (1800 HK)‘s overseas contracts surged sharply in 2Q24 as market share gained. Slow domestic contracts are transient as bond issues will accelerate.
- Its backlog continued to grow to 4.7x 12-month forward revenue, which is higher than the 5-year average of 4.1x. Improving margin trend in 1Q24 will sustain into 2H24.
- With a projected ROE of 8.4% for the next two years, its 0.2x P/B is inexpensive. It is also attractive based on dividend yields of 7.7% and 8.4%, respectively.
High Dividend Yield, Expansion Outside China, Listed HK Apparel/Footwear Stocks Screener
- We compile a list of ten high-yielding/net cash or low-net debt stocks in HK’s apparel/footwear value chain. HK is a pariah for investors, and trailing dividend yields are approaching 6-20%.
- As in other insights, we don’t estimate future earnings for all companies, but we indicate if the company has quality by measuring long-term ROCE (average five years).
- By expanding outside of China, most of these companies have derisked themselves from the trade war ( to the extent they can) and are also ready for earnings inflection.
[Blue Lotus New Energy Sector Update]: Rocky but Firm: China New Energy’s Venture Overseas
- We tallied China renewable energy industry’s expansion overseas in June 2023 and recalibrated our result about one year after.
- We see Chinese firm’s strategy of building capacities in the outskirt of US/Europe hard to defeat;
- The negative is manufacturing job losses at home. We also find more local competition in solar PV invertors.
Legend Biotech (LEGN.US) Offer Update – Some New Information About the Takeover Worth the Attention
- This takeover could be at negotiation stage and different parties haven’t reached an agreement.When Legend Bio releases official announcement, it means main issues of the deal have been agreed upon.
- Genscript will be a big winner if Legend Bio is acquired. Major shareholders would take measures to maximize personal interests.The concern is whether Genscript will offer dividends to small/medium shareholders/investors.
- Whether the takeover is successful or not, reasonable valuation of Legend Bio is between US$12.5- US$15 billion. Due to uncertainties, we recommend investors buy Legend Bio directly rather than Genscript.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
