In today’s briefing:
- BUY/SELL/HOLD: Hong Kong Stock Updates (September 21)
- Fu Shou Yuan (1448.HK) – The Business Model Has “Flaws”
- Monthly Chinese Express Tracker | Price Pressures Ease | X-Border Re-Accelerates | (September 2024)
- Helixtap China Report: Inclement Weather And Arbitrage Buying Spurs Chinese Prices
- KE (BEKE US): Why Earning Money in Weak Market
- Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 23)
BUY/SELL/HOLD: Hong Kong Stock Updates (September 21)
- The conglomerate sector continues to show momentum in Hong Kong while the materials and energy sectors lag
- Weibo (9898 HK)Weibo Corp (WB US) was rated a BUY as valuations and potential catalysts from parent Alibaba Group Holding (9988 HK) could support a higher stock price.
- China East Education (667 HK) was upgraded to BUY with higher higher price target due to profit increase. Dongfang Electric (1072 HK) was initiated with a BUY with strong upside.
Fu Shou Yuan (1448.HK) – The Business Model Has “Flaws”
- The sharp decline in revenue/profits indicates that Fu Shou Yuan’s business model is not as excellent as previously imagined. The Company’s performance would still be heavily influenced by macro factors.
- Once Fu Shou Yuan slows down external expansion and explores endogenous growth, it usually doesn’t require too much capital, which means the Company would have greater motivation to distribute dividends.
- The economic downturn leading to performance headwinds is just short-term logic. In the long run, the logic behind the increasing demand in funeral industry has not changed. Valuation would rebound.
Monthly Chinese Express Tracker | Price Pressures Ease | X-Border Re-Accelerates | (September 2024)
- August parcel volume growth moderated, but easing price pressure matters more
- In July & August, Chinese X-border parcel volume growth re-accelerated
- We believe easing price pressure should lead to express margin expansion
Helixtap China Report: Inclement Weather And Arbitrage Buying Spurs Chinese Prices
- Adverse weather impacts Chinese prices
- Arbitrage buying spurs prices up
- TSR inventory drops in September
KE (BEKE US): Why Earning Money in Weak Market
- In 2Q24, KE’s revenue grew by 20% YoY despite the weak property market.
- We believe property developers and personal landlords need KE more than the prosperous time.
- We believe the stock has an upside of 148% for the end of 2025. Buy.
Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 23)
- Hong Kong tech sector leads the market higher with increased momentum and lower volatility. Short selling has abated with unwind of HKD carry trade.
- Sands China (1928 HK) had a breakout from a Falling Wedge pattern. The share price broke above its short-term averages with increasing momentum.
- China Feihe (6186 HK) broke out from its downtrend with a Reversal from its U-Shaped Bottom. Techtronic Industries (669 HK) broke out to a new YTD high.
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