In today’s briefing:
- StubWorld: Hanwha Corp; Genscript Biotech/Legend Biotech
- Tencent (700 HK): 3Q24, Better Game Revenue and Better Gross Margins
- Technically Speaking, Breakouts and Breakdowns: HONG KONG (NOVEMBER 13)
- BeiGene (6160.HK/BGNE.US) 24Q3 – Things Are on Track Despite BRUKINSA’s Disappointing QoQ Growth
- Silergy (6415.TT): It Will Grow in 4Q24, While Auto Is Expected to Grow to 15% by the End of 2025.
- [Kuaishou (1024 HK, BUY, TP HK$75) Preview]: C3Q24 Preview: Solid Growth and Faster Growth Ahead
StubWorld: Hanwha Corp; Genscript Biotech/Legend Biotech
- Hanwha Corporation (000880 KS) is “expensive” on my monitor. But that doesn’t paint the whole picture. And what’s up with Genscript Biotech (1548 HK)‘s deconsolidation of Legend Biotech (LEGN US)?
- Preceding my comments on Hanwha and Genscript Biotech/Legend Biotech 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%.
Tencent (700 HK): 3Q24, Better Game Revenue and Better Gross Margins
- In 3Q24, game revenue increased by 13% YoY, higher than our estimate, 9% YoY.
- The gross margins of all business lines improve in 3Q24, especially “others”.
- We set the upside at 50% and the price target at HK$605 for the end of 2025. Buy.
Technically Speaking, Breakouts and Breakdowns: HONG KONG (NOVEMBER 13)
- Although Hong Kong markets have slumped after Trump’s election, mainland China’s markets have gained. Southbound net buying of HK stocks hit a 2024 high on the day Trump won.
- Sands China (1928 HK) had a breakout from a double top as Macau recorded good Golden Week arrivals. Blue Moon Group Holdings (6993 HK) had a breakout after 3 years.
- CanSino Biologics (6185 HK) formed a breakout after a new vaccine was approved and it reported better results. Haidilao International Holding (6862 HK) share price advanced as it expands stores.
BeiGene (6160.HK/BGNE.US) 24Q3 – Things Are on Track Despite BRUKINSA’s Disappointing QoQ Growth
- BRUKINSA QoQ growth slowed down to single digit in 24Q3, thus dragging down the overall product revenue growth.However, such QoQ growth and market share growth were still higher than Imbruvica/Calquence.
- BRUKINSA’s full-year revenue is expected to reach US$2.5 billion. Due to lower 24Q3 product revenue growth, we adjusted our 2024 forecast – Full year revenue would reach about US$3.7 billion.
- BeiGene’s performance in 24Q1-Q3 is still on track. Peak sales of BRUKINSA + tislelizumab is about US$5.5 billion. Reasonable market value range for BeiGene is US$18.5-27.5 billion.
Silergy (6415.TT): It Will Grow in 4Q24, While Auto Is Expected to Grow to 15% by the End of 2025.
- In the 3rd quarter of 2024, revenue was NT$4,284 million, the gross margin (GM) was 55%, the operating profit margin (OPM) was 24%, and the net margin was 15%.
- The Gen-4 product line is ramping up and is expected to contribute around 4% of total revenue by the end of 2025.
- Chinese current economic stimulus programs may impact demand in the Consumer segment.
[Kuaishou (1024 HK, BUY, TP HK$75) Preview]: C3Q24 Preview: Solid Growth and Faster Growth Ahead
- We expect Kuaishou to report C3Q24 revenue, IFRS operating profit and IFRS net income in-line, 5.9%, and 7.0% vs. consensus.
- The quarter is marked by robust advertising but moderated GMV growth due to weak consumption.
- We maintain our BUY rating and TP of HK$75 .
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