In today’s briefing:
- Kuaishou (1024 HK): Why Did the Market React Mutedly to Its Strong Profit Alert?
- EQD | Hang Seng Index (HSI) WEEKLY LONG: Support Levels and Probability
- ECM Weekly (6th August 2023) – Concord Biotech, SBFC Fin, Fadu, Mitsui Fudosan, Capitaland Ascott
- Hutchmed China Ltd (13.HK/HCM.US) 23H1 – This Company Is Becoming More Attractive
- [Li Auto (LI US, BUY, TP US$55) TP Change]: Witnessing Consolidation…Reiterate as Our Top Pick
- [Miniso Group (MNSO US, BUY, TP US$26) TP Change]: Shifting from Value- To Interest-Based Retailer
- Morning Views Asia: Bharti Airtel, China Jinmao Holdings, China Vanke , Greentown China
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Kuaishou (1024 HK): Why Did the Market React Mutedly to Its Strong Profit Alert?
- We believe that Kuaishou’s outsized bottom-line beat for 1H23 was driven by stronger advertising and e-commerce business and cost reduction than the street expected.
- However, the market’s muted response suggests that investors are looking beyond 1H23 or even FY23 to price in a mature growth outlook.
- Kuaishou is trading at ~40x our FY23 estimate against 24% earnings CAGR from 2023 to 2025 which represents a hefty valuation premium over other China tech giants.
EQD | Hang Seng Index (HSI) WEEKLY LONG: Support Levels and Probability
- The Hang Seng Index (HSI) closed down last week (CC=-1), briefly touching OVERSOLD territory, it may close higher this week.
- The HSI trend pattern currently identified with the Market Reversal Matrix (MRM) is quite bullish, on average.
- Support levels to go LONG are between 19367 (Q2/Median) and Q3 at 19021.
ECM Weekly (6th August 2023) – Concord Biotech, SBFC Fin, Fadu, Mitsui Fudosan, Capitaland Ascott
- Aequitas Research puts out a weekly update on the deals that were covered by the team recently along with updates for upcoming IPOs.
- In the IPO space, Concord Biotech Ltd (658823Z IN) and SBFC Finance Limited (1547353D IN) opened their respective IPO bookbuilds this week.
- On the Placements front, India began picking up steam post-earnings seasons.
Hutchmed China Ltd (13.HK/HCM.US) 23H1 – This Company Is Becoming More Attractive
- HUTCHMED’s 23H1 results were in line with expectation. We updated our forecast for the three core products. Its 2023 total revenue would achieve a high double-digit growth. HUTCHMED is undervalued.
- Performance prospects for 2024 and beyond largely depend on whether fruquintinib can smoothly obtain FDA approval in 2023, which means significant progress in internationalization and possibility of breakeven in 2025.
- Based on the performance so far, we think the clarity of HUTCHMED’s performance is high and the guidance given by management is reliable. The Company deserves more attention from investors.
[Li Auto (LI US, BUY, TP US$55) TP Change]: Witnessing Consolidation…Reiterate as Our Top Pick
- We expect Li Auto to report 2Q23 top line and GPM 2.3%/in line vs. cons. We think Li Auto’s share gain in Q1/Q2 reflects market consolidation.
- Our channel check found its weekly order intake remains robust at ~10k. We expect the capacity ramp-up to lead to Q3 delivery of ~100k, 12% vs. cons.
- We reiterate Li Auto as our top pick, due to 1) strong model cycle (L9/L8/L7) and channel expansion; 2) margin upside. Li’s MEGA BEV could be the next catalyst.
[Miniso Group (MNSO US, BUY, TP US$26) TP Change]: Shifting from Value- To Interest-Based Retailer
- We expect MNSO to report C2Q23 revenue 4.6% higher than cons and non-GAAP NI in-line with cons. The beat is due to strong sales from larger ticket size &store expansion.
- We think the brand upgrade strategy had effectively drove up Miniso stores’ blended ASP, combined with mild recovery of foot traffic, leading to 46% YoY growth in China revenue.
- Besides, we anticipate 37% YoY growth in oversea revenue and 43% YoY growth in total revenue in C2Q23. We maintain Buy rating and raise TP by US$0.5 to US$26.
Morning Views Asia: Bharti Airtel, China Jinmao Holdings, China Vanke , Greentown China
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.