In today’s briefing:
- Meituan Is the Biggest Beneficiary of China’s Domestic Travel Recovery
- MT/ Meituan (3690 HK): 1Q24, Total Revenue Up by 25% and Initiatives Loss Down by 45%
- Water Oasis (1161 HK): Dividend Cut As Company Gets Conservative
- QuantumPharm IPO – Most of the Potential Has Already Been Baked In
- Morning Views Asia: Greentown China, HPCL-Mittal Energy Ltd, Lippo Karawaci, Citicore Renewable Energy
- Morning Views Asia: Greentown China, HPCL-Mittal Energy Ltd, Lippo Karawaci, Citicore Renewable Energy
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Meituan Is the Biggest Beneficiary of China’s Domestic Travel Recovery
- During the upcoming Dragon Boat Festival, both flight and railway traffic seems sluggish, indicating a cooled-down enthusiasm for long-distance trips due to budget constraints.
- Data points to booming short-distance travel with self-driving as the major means, helped by lower price;
- Benefiting from hotel booking and catering, Meituan is the biggest beneficiary of such consumption downgrade.
MT/ Meituan (3690 HK): 1Q24, Total Revenue Up by 25% and Initiatives Loss Down by 45%
- Total revenue increased by 25% YoY and all business lines grew strongly.
- In 1Q24, the operating losses from new initiatives decreased by 45% YoY, but new initiatives revenue still grow.
- We conclude that the price target can be double of the market price.
Water Oasis (1161 HK): Dividend Cut As Company Gets Conservative
- Water Oasis (1161 HK) reported profits down 30% YoY (ex-one-off profits down 9% YoY only), but commentary cited headwinds in the business due to muted HK economic sentiment.
- Anticipating these headwinds, the company cut its semi-annual dividend by 50% to only 3.5 cents (implying a 7% yield on the current share price) despite a massive cash buildup.
- Net cash at 396 mn HKD is now 58% of the market cap. Given the current economic backdrop, we see a conservative approach to dividend payment in the medium term.
QuantumPharm IPO – Most of the Potential Has Already Been Baked In
- QuantumPharm (QUP HK) is looking to raise US$144m from its Hong Kong IPO.
- QuantumPharm is a R&D platform, utilizing quantum physics-based first-principles calculation, advanced AI, high-performance cloud computing, and scalable and standardized robotic automation to provide drug and material science R&D solutions.
- In our previous notes, we looked at the firm’s past performance and PHIP updates. In this note, we share our thoughts on valuations.
Morning Views Asia: Greentown China, HPCL-Mittal Energy Ltd, Lippo Karawaci, Citicore Renewable Energy
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.
Morning Views Asia: Greentown China, HPCL-Mittal Energy Ltd, Lippo Karawaci, Citicore Renewable Energy
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.