In today’s briefing:
- Trip.com (9961 HK, TCOM US): 4Q23, Revenue Up by 105%, But Reached Our Last Price Target
- [NetEase, Inc. (NTES US, BUY, TP US$118) TP Change]: Strong In-House Game Performance Drives Margins
- Trip.com (9961 HK): Looks to Reap More Recovery Benefits
- StandChart Is Likely to Have More China Bohai Impairment
- [Miniso Group (MNSO US, BUY, TP US$33) Company Update]: CNY Foot Traffic Growth Support Decent C1Q24
- Xiaocaiyuan International Holding Pre-IPO – Strong Network Expansion and Same Store Sales Growth
Trip.com (9961 HK, TCOM US): 4Q23, Revenue Up by 105%, But Reached Our Last Price Target
- The main businesses, hotel and air ticket bookings increased by 131% YoY and 86% YoY in 4Q23.
- The Chinese traveling market continued its recovery after the lift of the lockdown at the end of 2022.
- The stock price is close to our last price target – Downgrade to Hold.
[NetEase, Inc. (NTES US, BUY, TP US$118) TP Change]: Strong In-House Game Performance Drives Margins
- We expect NetEase to report C4Q23 revenue, GAAP op. profit and GAAP net income 4.9%, 5.7% and 8.5% vs. consensus.
- The robust topline growth was mainly contributed by revenue recognition of <Justice Mobile> in the peak summer season.
- The grossing of legacy titles like <FWWJ> is also growing steadily due to the low-price strategy. We raise our TP to US$118 to reflect the rich and diversified pipeline…
Trip.com (9961 HK): Looks to Reap More Recovery Benefits
- Trip.com Group (9961 HK) has a remarkable 4Q23 with adjusted net profit surged 437.1% YoY. Higher volume and better market efficiency have resulted in massive margin expansion.
- Net cash has ballooned to about 15% of its share price, and this has allowed it to carry out a massive US$300m Capital Return Program in 2024.
- Business has outperformed the industry in CNY, with domestic hotel and air business volume increased by 60% and 50% YoY. Its overseas platform also saw double-digit growth.
StandChart Is Likely to Have More China Bohai Impairment
- StandChart may need to take further impairment hit on China Bohai Bank
- VIU model is used to justify the higher carrying value compared to fair value of the holdings. There is zero headroom between the VIU model and the carrying amount.
- We looked at VIU model assumptions for HSBC and StandChart. A declining NIM is likely put further pressure on the VIU model output for StandChart.
[Miniso Group (MNSO US, BUY, TP US$33) Company Update]: CNY Foot Traffic Growth Support Decent C1Q24
- Intra-Urban mobility in major cities and foot traffic in leading shopping malls in China have demonstrated decent growth during 2024 CNY holiday period.
- We estimate Miniso domestic store sales increased 35% yoy during CNY-holiday and 11% yoy during Jan to mid-Feb 2024. We expect Miniso total revenue to increase 26% yoy in 1Q24.
- We maintain the stock as BUY and maintain TP at US$33/ADS.
Xiaocaiyuan International Holding Pre-IPO – Strong Network Expansion and Same Store Sales Growth
- Xiaocaiyuan International Holding (XCY HK) is looking to raise up to US$200m in its upcoming HK IPO.
- Xiaocaiyuan is a Chinese home-style cuisine restaurant operator. It prices its menus’ items to achieve average spending per consumer between RMB50 and RMB70 for its dine-in customers at its restaurants.
- In this note, we talk about the company’s historical performance.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
