In today’s briefing:
- Baicha Baidao (2555 HK) IPO: Valuation Insights
- Nongfu Spring (9633 HK): Criticism Not a Concern, Strong Performance, But Flat Price, Buy
- Horizon Robotics IPO Preview: “Journey Together”, Strong Business Position and Market Share Gains
- China Consumption Weekly (15Apr2024): NetEase, Activision Blizzard, Li Auto, Alibaba, Feihe, Uniqlo
- Sichuan Baicha Baidao IPO – Doesn’t Offer a Discount to Peers
- J&T Global Express Q124 Operating Stats: One Step Forward for Disclosure, & One Step Back
- Travelsky (696 HK | HOLD | TP:HKD9.92): Domestic Travel Will Support Growth
- 2024 High Conviction Update: Innovent (1801.HK) – Breakeven Is Still on Track Despite Soaring Costs
Baicha Baidao (2555 HK) IPO: Valuation Insights
- Sichuan Baicha Baidao Industrial (SCBCBDID CH), a leading freshly made tea drinks company, has launched an HKEx IPO to raise US$330 million. The shares will be listed on 23 April.
- We previously discussed the IPO in Baicha Baidao IPO: The Bull Case and Baicha Baidao IPO: The Bear Case.
- There are no cornerstone investors. Our valuation analysis suggests that Baicha is fairly valued at the HK$17.50 IPO price. Therefore, we would pass on the IPO.
Nongfu Spring (9633 HK): Criticism Not a Concern, Strong Performance, But Flat Price, Buy
- We believe the criticism against Nongfu Spring will eventually help the company.
- Catching the trend of sugar free, tea revenue surged by 83% in 2023.
- The company achieved higher growth and higher margin, but its stock price is still flat.
Horizon Robotics IPO Preview: “Journey Together”, Strong Business Position and Market Share Gains
- Horizon Robotics, a consumer-centric and fast-growing provider of integrated ADAS and AD solutions for passenger vehicles, filed for an IPO and plans to raise up to $500M in Hong Kong.
- Horizon Robotics was founded in 2015 by Dr. Yu Kai, Dr. Chang Huang, Ms. Feiwen Tao, and a group of scientists and tech entrepreneurs.
- I have a positive view of an upcoming IPO and believe Horizon Robotics is in a great position to capitalize on rapidly growing smart vehicles market in China and worldwide.
China Consumption Weekly (15Apr2024): NetEase, Activision Blizzard, Li Auto, Alibaba, Feihe, Uniqlo
- NetEase will be Activision Blizzard’s agency in China again after a divorce more than a year ago.
- Alibaba’s cloud service plans to reduce its overseas price offers by 23% on average.
- Infant formula companies, such as Feihe and Ausnutria, suffered from revenue shrinkage in 2023.
Sichuan Baicha Baidao IPO – Doesn’t Offer a Discount to Peers
- Sichuan Baicha Baidao Industrial is looking to raise up to US$330m in its HK IPO.
- SBBI sells new-style tea drinks through its ChaPanda stores. According to F&S, SBBI ranked third in China’s new-style tea shop market with a market share of 6.8% in FY23.
- We have looked at the company’s performance in our past note. In this note, we talk about valuations
J&T Global Express Q124 Operating Stats: One Step Forward for Disclosure, & One Step Back
- On April 9, J&T disclosed operating stats from Q124 — a positive surprise
- We welcome the disclosure, but J&T should also explain X-border’s demise
- We believe J&T’s China operation remains far less profitable than its peers’
Travelsky (696 HK | HOLD | TP:HKD9.92): Domestic Travel Will Support Growth
- Travelsky Technology Ltd H (696 HK) Jan-Feb operational data strong, volume processed by domestic +45% YoY and international by +52% YoY; much higher than the consensus 2024 forecast of 15%
- Traffic among the Big 3 Chinese airlines was up 46% YoY (-9% MoM) in March to +8% vs 2019. Domestic traffic rose 19% YoY (-11% MoM) to +24% vs 2019
- TP of HKD9.92 (+8% UPSIDE) is based on 2024 PE 14.8x (1SD below mean). The upside is uncompelling, but we advocate a HOLD as traffic growth is stronger than consensus
2024 High Conviction Update: Innovent (1801.HK) – Breakeven Is Still on Track Despite Soaring Costs
- 23H2 net loss significantly widened as cost control was not as tight as in 23H1. Expenses would remain high in 2024, since Innovent would continue expanding team in CVM field.
- Innovent may think that not many players will join the competition of weight loss drug in short-term, but the actual commercialization of mazdutide after launch could be full of uncertainties.
- It’s already good for Innovent to be breakeven in 2025. If Innovent breaks even in 2024, it will exceed expectations.Considering major policy shift, Innovent could experience a leap in valuation.
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