In today’s briefing:
- Oriental Watch (398 HK): H1 FY24 Lower than Expectation But A 15% Div Yield, Cash >60% of Mkt Cap
- 2024 High Conviction – Giant Biogene – Growth Rate Keeps Moving Higher
- [Xiaomi Inc.(1810HK,SELL,TP HK$12.6) Earnings Review]: Mi14 Success Does Not Alter Overall Headwinds
- 2024 High Conviction – ZJLD – Buoyed by a Premiumisation Shift
- BOC Aviation (2588 HK, BUY, TP:HKD70): High Quality Safe Bet
Oriental Watch (398 HK): H1 FY24 Lower than Expectation But A 15% Div Yield, Cash >60% of Mkt Cap
- Oriental Watch (398 HK) reported an 8% YoY profit decline for H1 FY24 (Vs. our expectation of 10-15% growth) due to a higher taxation rate and lower margins in HK.
- Despite that, the company distributed 100% of its profits for a 28.5 cent HKD/share dividend (15% annualized) and built net cash/investments to 1.25 bn HKD (62% of market cap).
- Trading at 7x FY24e PE with abundant cash and real estate with a 15% yield, the stock is worth exploring with the perspective of building a high-yield portfolio.
2024 High Conviction – Giant Biogene – Growth Rate Keeps Moving Higher
- Giant Biogene was listed in Hong Kong IPO in 2022. It has done well since and is now trading 45% above its IPO price, but its still cheap.
- GB is a leader in the bioactive ingredient-based professional skin treatment product industry in China.
- In this note, we will talk about the company’s past performance and future prospects.
[Xiaomi Inc.(1810HK,SELL,TP HK$12.6) Earnings Review]: Mi14 Success Does Not Alter Overall Headwinds
- Xiaomi reported C3Q23 top-line, non-GAAP EBIT, and GAAP net profit (2%), 7% and in-line vs. our est., and in-line, 4%, and 13%, vs. consensus respectively.
- Xiaomi’s recent run could be short lived, as (1) Huawei will soon launch mid-range 5G handsets, (2) the Mi 14 will soon face new high-end Android competition;
- And (3) its underinvested EV project could disappoint. We maintain our SELL rating and HK$ 12.6 TP, implying 28x CY24 P/E.
2024 High Conviction – ZJLD – Buoyed by a Premiumisation Shift
- In Apr 2023, ZJLD Group (6979 HK) raised around US$676m in its HK IPO. While it initially had a turbulent listing, the shares are now trading above its IPO price.
- ZJLD Group (ZJLD) is a Chinese liquor company primarily producing baijiu.
- In this note, we will talk about the company’s past performance and future prospects.
BOC Aviation (2588 HK, BUY, TP:HKD70): High Quality Safe Bet
- BOC Aviation (2588 HK) (BOCA) is the highest-quality aircraft leasing company, with a young asset portfolio, quality clientele, cheapest credit facility, and superb risk management.
- Outlook is attractive, strong demand and scarce supply ensures high lease rates and profits. Asset disposals have all recorded a healthy surplus, a potential earnings surprise.
- Our TP of HKD70/share implies 0.94x FY24 (22% UPSIDE) potential
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