In today’s briefing:
- Shenzhou Intl (2313 HK): Nike Guidance Cut Presents An Opportunity
- Sinopharm Group (1099.HK) – Performance Pressure May Continue Until 2024H1
Shenzhou Intl (2313 HK): Nike Guidance Cut Presents An Opportunity
- Nike (NKE US) reported 2QFY24 results last week with a guidance cut, as the company cut FY24 full-year sales guidance to around +1%, compared to +mid-single-digit in the previous guidance.
- Shenzhou Intl Group Holdings (2313 HK) saw its stock drop by 8% the following day, given that Nike is Shenzhou’s most important customer, making up 30% of Shenzhou’s sales.
- Nike’s inventory is down another 14% yoy, and down high-single-digit compared to the previous quarter 1QFY24.
Sinopharm Group (1099.HK) – Performance Pressure May Continue Until 2024H1
- Sinopharm’s 23Q1-Q3 results were below expectations. The main reason for weak performance was due to the anti-corruption campaign, which led to profound and rapid changes in fundamentals and policy end.
- In Q4, the impact of anti-corruption would weaken and traditional distribution business would recover.So, 23Q4 performance should be better than Q3, but 23H2 performance would still be worse than 23H1.
- We lowered our forecast for 2023 – Revenue and net profit could achieve single-digit growth. Due to the high base in 23H1, growth in 24H1 could still be under pressure.
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