In today’s briefing:
- NWD 17 HK: Kitchen Sink Results, Overhang Removed, the BEST Stock to BUY in New Rate Cut Cycle
- Sun Art Retail (6808 HK): Alibaba’s Stake Draws PE Interest
- Monthly Chinese Tourism Tracker: Solid Outbound & Domestic Numbers in August | Cut Trip.com to HOLD
NWD 17 HK: Kitchen Sink Results, Overhang Removed, the BEST Stock to BUY in New Rate Cut Cycle
- NWD reported HKD20bn loss attributable to shareholders. There is no dividend declared. However, we view this as kitchen sink. The stock rallied 22% on Friday
- CEO Adrian Cheng stepped down and COO Eric Ma, former Secretary for Development for HK, is the new CEO. This represents a shift from family business to professional management
- As Fed initiated new rate cut cycle, NWD will benefit most given high gearing. With macro backdrop in U.S. and China, NWD is the Best stock to buy now
Sun Art Retail (6808 HK): Alibaba’s Stake Draws PE Interest
- Sun Art Retail (6808 HK) entered a trading halt under the Code on Takeovers and Mergers. Bloomberg suggests Alibaba Group Holding (BABA US)’s stake is attracting preliminary interest from PE.
- Alibaba built its 78.70% stake through two purchases in 2017 (HK$6.50) and 2021 (HK$8.10). An exit would align with the strategy to focus on the core business segments.
- The recent Miniso-Yonghui transaction could have prompted PE to act. An offer at book value would imply HK$2.50, a 40% premium to the last close price.
Monthly Chinese Tourism Tracker: Solid Outbound & Domestic Numbers in August | Cut Trip.com to HOLD
- Outbound & domestic travel activity continued to recover nicely in August
- Initial reports suggest Mid-Autumn Festival travel activity was solid, too
- After recent surge, we’ve cut Trip.com to HOLD; check out airlines instead
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