In today’s briefing:
- HSCI Index Rebalance Preview: Three Hot Inclusions to Stock Connect in June
- Kuaishou (1024 HK): FY2024 Result, Op Margin to 10% from 4%, Price to Be Double
- Shanghai Henlius Biotech (2696 HK) – Thoughts on 2024 Results And the H Share Full Circulation
- Bank Of China (3988 HK/601988 CH) Earnings on 26/3: Anticipated Price Movements and Options Insights
- Kunlun Energy (135 HK): Remains Very Decent
- Duality Biotherapeutics (映恩生物) Pre-IPO: A Closer Look at Its Core Products
- Lucror Analytics – Morning Views Asia
- Asia Real Estate Tracker (25-Mar-2025): Warburg Pincus JV acquires second Korean asset.
- 111, Inc. – Positioned to Leverage Market Turnaround When It Comes
- Monthly Chinese Tourism Tracker | Growth of Travel Demand Slowed in January-February (March 2025)
HSCI Index Rebalance Preview: Three Hot Inclusions to Stock Connect in June
- There have been 14 new listings on the Main Board of the HKEX in Q1. One listing is a transfer from the GEM Board and one is a De-SPAC.
- Of the 14 stocks, we see Mixue Group (2097 HK), Guming Holdings (1364 HK) and Bloks Group (1850960D CH) as potential HSCI inclusions in June.
- There are no lock-up expiries in the stocks ahead of inclusion in Southbound Stock Connect and the low float could take the stocks higher ahead of the index inclusion announcement.
Kuaishou (1024 HK): FY2024 Result, Op Margin to 10% from 4%, Price to Be Double
- Kuaishou (KS)’ operating margin improved to 10% in 2024 versus 4% in 2023.
- Online marketing revenue increased by 20% and GMV increased by 17% in 2024.
- We conclude an upside of 104% for the next twelve months.
Shanghai Henlius Biotech (2696 HK) – Thoughts on 2024 Results And the H Share Full Circulation
- Henlius has made a profit for the second year in a row.However, some investors are not satisfied with the quality of net profit growth in 2024 due to concerns behind.
- The implementation of H Share Full Circulation has a positive impact on financing ability, shareholder returns, market valuation of Henlius.The next goal is to be included in HK Stock Connect
- Lin Lijun’s continuous increase in Henlius holdings is an important reason for shares surge after privatization failure.Lin may keep pushing up share price so as to exit at higher price.
Bank Of China (3988 HK/601988 CH) Earnings on 26/3: Anticipated Price Movements and Options Insights
- Bank Of China Ltd (H) (3988 HK) /Bank of China (601988 CH) is scheduled to report its annual 2024 financial results on 26 March 2025, after market close.
- Expected Price Movement: Option implied movement is above the historically recorded movement.
- Implied Volatility, Options Strategies and Dividends: Discussion of implied volatility term structure and option strategies. Dividends are now semi-annual.
Kunlun Energy (135 HK): Remains Very Decent
- Kunlun Energy (135 HK)‘s net profit grew 7.9% in 2H24, accelerating from 2.6% in 1H24. It is encouraging to see the dividend payout ratio increase by 2pp YoY.
- An increase in the adoption of the residential price linkage system is positive for the dollar margin, while the distortion from E&P expiry will no longer impact earnings.
- With net cash equals HK$2.56/share, or 31% of the share price, such financial strength is unmatched by peers. Its PER valuations are also inexpensive.
Duality Biotherapeutics (映恩生物) Pre-IPO: A Closer Look at Its Core Products
- Duality Biotherapeutics, a China-based clinical-stage biotechnology company, plans to raise up to US$250m via a Hong Kong listing.
- We looked at the latest prospectus and noted it toned down the language and strengthened its team.
- We also compare the clinical readings of its core products with benchmark products.
Lucror Analytics – Morning Views Asia
- In today’s Morning Views publication we comment on developments of the following high yield issuers: China Water Affairs, Xiaomi Corp, Nickel Industries
- In the US, Atlanta Fed President Raphael Bostic said he anticipates only one interest rate cut this year, as he now thinks “we’re going to see inflation be very bumpy and not move dramatically and in a clear way to the 2% target”.
- Mr Bostic currently projects that inflation will return to the central bank’s 2% target at some point in early 2027, in line with the Fed’s projections published last week.
Asia Real Estate Tracker (25-Mar-2025): Warburg Pincus JV acquires second Korean asset.
- Warburg Pincus and Wide Creek JV have acquired GreenFort, a Korean logistic asset, marking their second investment in the country.
- Gaw Capital is set to discuss a joint venture with MTD TV for the development of 1,200 homes in an upcoming interview on Wednesday.
- Mitsubishi Estate has sold its stake in a Shinjuku office tower to a J-REIT for $190 million, continuing its strategic real estate transactions.
111, Inc. – Positioned to Leverage Market Turnaround When It Comes
- 111 chalks up its first annual operating profit despite challenging market.
- Seven years after launching its B2B operations, 111 delivered its first annual operational profit and positive operating cash flow.
- Ironically, this has happened in a year in which China’s healthcare system has been up against significant headwinds.
Monthly Chinese Tourism Tracker | Growth of Travel Demand Slowed in January-February (March 2025)
- Combined January-February activity indicates demand growth continues to slow down
- Similarly, capacity restoration & load factors on outbound flights appear to have stagnated
- We expect shares of Chinese airlines to continue to outperform travel platform Trip.com
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