In today’s briefing:
- HKBN (1310 HK): China Mobile Comes Knocking. Again.
- SF Holdings A/H Listing – Lower End Looks Digestable
- Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for December
- Quiddity Leaderboard HSCEI Dec 24: Time for a LONG-SHORT Trade
- Quiddity Leaderboard HSTECH Dec 24: Large Flow Expectations Although No Index Changes Expected
- Trip.com (9961.HK, TCOM): 3Q24, Still Healthy, But Stock Price Exceeded Our Last Target
- SF Holding H Share Listing (6936 HK): Valuation Insights
- Pre-IPO S.F. Holding (6936 HK) – Thoughts on Valuation and the Outlook
- ZTO Express Q324 Results: Shift in Strategy Leads to Lower Core Margins & FY24 Guidance Cut | AVOID
- IO Weekly Technicals Review [2024/46]: IO to Rise on Seasonality
HKBN (1310 HK): China Mobile Comes Knocking. Again.
- HKBN Ltd (1310 HK), a Hong Kong broadband play, is never short on privatisation rumours. China Mobile (941 HK) is reportedly (again) holding talks with HKBN’s major shareholders.
- China Mobile is a logical suitor. I highly doubt a non-PRC (government-affiliated) corporation would be permitted to take HKBN private.
- Previous takeover rumours over the years came to nought. It may be different this time. HKBN was suspended this morning pursuant to the Takeovers Code.
SF Holdings A/H Listing – Lower End Looks Digestable
- S.F. Holding (002352 CH), China’s largest express delivery company, is now looking to raise around US$800m in its H-share listing in Hong Kong.
- SFH is the largest integrated express logistics service provider in China and the fourth largest in the world. It has been listed on the Shenzhen Stock Exchange since 2017.
- We have covered the company and deal background in our previous notes. In this note, we talk about the IPO pricing.
Hang Seng Index (HSI) Rebalance Preview: Inclusion Candidates for December
- Post market close on Friday, Hang Seng Indexes will announce the changes for the Hang Seng Index (HSI INDEX) that will be implemented at the close on 6 December.
- With no increase in the number of index constituents this calendar year, there could be inclusions in December. The process of getting to 100 index constituents could drag into 2026.
- Short interest is especially large in Sinotruk, Giant Biogene, Kuaishou Technology, ASMPT and JD Logistics and inclusion could set off some short covering.
Quiddity Leaderboard HSCEI Dec 24: Time for a LONG-SHORT Trade
- The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
- The official index changes will be confirmed later this week on Friday 22nd November 2024.
- In this insight, we take a look at our final index change expectations and updated flow estimates for the upcoming index rebal event.
Quiddity Leaderboard HSTECH Dec 24: Large Flow Expectations Although No Index Changes Expected
- The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
- The official index changes and indicative weights for the December 2024 index rebal event will be announced later this week on Friday 22nd November 2024.
- In this insight, we take a look at our updated flow expectations.
Trip.com (9961.HK, TCOM): 3Q24, Still Healthy, But Stock Price Exceeded Our Last Target
- The stock has risen by 38% since our last buy rate.
- The 3Q24 results are still healthy – both growth rate and operating margin.
- We set a downside of 19% for the end of 2025.
SF Holding H Share Listing (6936 HK): Valuation Insights
- S.F. Holding (002352 CH) has launched its H Share listing at HK$32.30-36.30 per share. Pricing will be on 25 November, and the listing on 27 November.
- We previously discussed the listing in SF Holding H Share Listing: Updates Point to Improving Fundamentals and SF Holding H Share Listing: AH Discount Views.
- Our valuation analysis suggests that the H Share listing range is attractive. We would participate in the listing.
Pre-IPO S.F. Holding (6936 HK) – Thoughts on Valuation and the Outlook
- One important reason S.F. chose to go public on Hong Kong stock market is due to financial pressure, which mainly comes from its heavy asset development model and internationalization strategy.
- Considering the discount of the H-share price versus the A-share price, if the IPO pricing is at the lower limit of the range, then the safety margin would be higher.
- In the short term, S.F. is better than JD Logistics, so its valuation should be higher than JD Logistics and industry average. Future valuation expansion depends on international business performance.
ZTO Express Q324 Results: Shift in Strategy Leads to Lower Core Margins & FY24 Guidance Cut | AVOID
- Going into FY24, ZTO aimed to focus on price, cede volume share in support of margins
- It hasn’t worked: in Q324, adj EBITDA margin fell -290 bps Y/Y despite higher ASPs
- Q324 results reveal weak earnngs growth, & reduced FY24 volume target; AVOID
IO Weekly Technicals Review [2024/46]: IO to Rise on Seasonality
- SGX Iron Ore Futures dropped to USD 96.71/ton, down USD 5.49/ton, hitting a low of USD 96.30/ton amid pressure from declining housing prices and industrial output in China.
- Chinese portside inventories increased by 120k tons WoW to 148.51m tons last week, while average daily port discharge volumes rose by 131k tons WoW to 3.18m tons.
- Despite weak economic data from China, SGX Iron Ore Futures may rebound in November-December as pre-Lunar New Year restocking boosts steel demand.
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