In today’s briefing:
- Last Week in Event SPACE: Naspers/Prosus, Swire Pacific, NTT, Aussie Tax-Loss Selling
- [Meituan (3690 HK, BUY, TP HK$165) TP Change]: Competition with Douyin Continues, Cut TP to HK$165
- [XPeng Inc. (XPEV US, BUY, TP US$13.7) Target Price Change]: Buy on More Visibility of Future Growth
- EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades-Chasing Stocks Higher
Last Week in Event SPACE: Naspers/Prosus, Swire Pacific, NTT, Aussie Tax-Loss Selling
- The Naspers (NPN SJ) / Prosus (PRX NA) circularity was too complex. Lots of people hated it. It was actually easier than most thought, but optically was difficult to reconcile.
- Swire Pacific (19 HK) was a clear buy: there is no justification for assigning a similar discount for cash from the US Coke ops as you would to unlisted ops
- A residual NTT (9432 JP) individual small-holder shareholding tenure reward does not get split 25:1 when the stock gets split 25:1. It doesn’t mean much, but it’s an interesting artefact.
[Meituan (3690 HK, BUY, TP HK$165) TP Change]: Competition with Douyin Continues, Cut TP to HK$165
- We expect that Meituan and Douyin engaged in fierce competition in 2Q23. Meituan intensified its efforts in three aspects: commission reduction and rebates, promotion of “Meituan Quanquan,” and video subsidy.
- However, our 2Q23 Meituan revenue/profit estimates are in-line/34% higher vs. cons. This is mainly because it was Meituan’s first quarter of counterattack.
- Meituan’s counterattack has shown initial results, in Douyin’s slowing local services growth during 618, and the return of merchants. We maintain Meituan’s BUY rating, but lowered TP to HK$ 165.
[XPeng Inc. (XPEV US, BUY, TP US$13.7) Target Price Change]: Buy on More Visibility of Future Growth
- We are more positive on G6’s potential due to attractive pricing and higher conversion rate brought by nationwide availability of display vehicles.
- The success of G6 will add visibility of its growth due to the shared architecture. We reiterate a rebound of sales momentum starting from 2Q23, driven by:
- 1) increased order intake of P7i and G6; 2) faster channel expansion than its peers. We raise our TP to US$ 13.7. Our TP implies 2.5x PS.
EQD | Volatility Update: Weekly Review of Vol Changes and Best Trades-Chasing Stocks Higher
- Weekly summary of vol changes and moves across Global Markets
- Analysing ATM volatility and skew changes over the last 5 days
- We suggest a few trades to take advantage of the implied vol surfaces
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