In today’s briefing:
- Alibaba Cloud – On Path to Fetch Zero Dollar Valuation
- Leapmotor IPO Preview
- Pinduoduo (PDD): 2Q22, Viewpoint Opposite to Marvelous Performance
- YH Entertainment IPO – While Smaller than Peers, It Is a Lot Cheaper as Well
- Leapmotor Pre-IPO – PHIP Updates – 6M22 Sales Doing Well, Catching up with the Rest
- ESG Mutual Funds Are Not to Be ESG Investing for Show
- IPAR: Primetime of the Year Begins
- JD Health (6618.HK) 2022H1 – A Second Growth Point Is Needed to Reassure Investment Logic
- PepsiCo Inc: Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (08/22)
- Restaurant Brands International: Increased Digital Push Through New Agencies & Other Drivers
Alibaba Cloud – On Path to Fetch Zero Dollar Valuation
- State-Owned-Entities (SOEs) in Tianjin are set to complete the migration of their data from private sector operators like Alibaba Group (9988 HK) to a state-backed cloud by 30th Sept 2022.
- This has already started to tip the balance of power in Chinese cloud computing in favour of politically favoured cloud operators like China Telecom.
- We think the impact of nationalising the cloud could escalate to Alibaba Cloud’s overseas markets as most of its customers overseas are Chinese companies with a global presence.
Leapmotor IPO Preview
- Leapmotor is getting ready to complete its IPO in Hong Kong in the next few weeks, aiming to raise US$1 billion to US$1.5 billion.
- Leapmotor is one of the fastest growing pure play EV companies in China in terms of delivery volume. Leapmotor shipped more than 43,000 EVs in 2021, up 443.5% YoY.
- Leapmotor’s revenue surged from 117 million RMB in 2019 to 3,132 million RMB in 2021. Operating margin improved from -625% in 2019 to -137.7% in 2020, and -91.6% in 2021.
Pinduoduo (PDD): 2Q22, Viewpoint Opposite to Marvelous Performance
- In 2Q22, revenue growth rate accelerated and the operating profit achieved record high.
- However, we believe PDD does not fully explain its exclusive advantages over competitors.
- We set a downside of 19% and a price target of US$47 for year end 2023.
YH Entertainment IPO – While Smaller than Peers, It Is a Lot Cheaper as Well
- YH Entertainment Group (2306 HK) is looking to raise up to US$144m in its Hong Kong IPO.
- YH Entertainment (YHE) is an artist management company in China. Its business covers the entire artist management industry value chain, from auditioning, training, artist operation to artist promotion.
- As per Frost & Sullivan (F&S), YHE was ranked first amongst artist management companies in China with a market share of 1.9%, based on artist management revenue generated in 2021.
Leapmotor Pre-IPO – PHIP Updates – 6M22 Sales Doing Well, Catching up with the Rest
- Leapmotor (LM) aims to raise around US$1.5bn in its Hong Kong IPO. LM is a smart EV company based in China, founded in 2015.
- As of end Jun 22, it had delivered a total of 104,829 cars with most of its sales coming from its mini units, T03.
- In our previous notes, we spoke about the company’s past performance. In this note, we will have a look at its PHIP updates.
ESG Mutual Funds Are Not to Be ESG Investing for Show
- Not many individual investors understand the value of ESG investing and buy ESG investment trusts, as inflows/outflows from ESG investment trusts have much to do with market volatility.
- It’s unclear how much ESG investing contributed to the performance, as aspects were saved by the performance of sectors in which they invest and by the benefits of weak yen.
- Efforts must be made to help individual investors understand the value of ESG investing and encourage long-term investment. To this end, investment managers should establish investment approach to ESG investing.
IPAR: Primetime of the Year Begins
- IPAR has taken over the Donna Karan and DKNY brands setting the stage for further growth with larger brand licenses in its portfolio
- IPAR reported second quarter sales of $244.7 million, which was in line with IPAR’s preannouncement
- The Euro declining in value versus the US Dollar dented European sales growth figures, but sales managed to increase by double-digits over last year
JD Health (6618.HK) 2022H1 – A Second Growth Point Is Needed to Reassure Investment Logic
- JD Health bucked the trend and grew in 2022H1. The Company has turned a profit first in front of its competitors Alibaba Health and Ping An Good Doctor.
- The performance of the second growth point would determine whether JD Health can maintain good momentum under the challenges of policy risks and possible future bottlenecks of products revenue growth.
- Hopefully, the smart healthcare solutions and digital health business or the pet healthcare business can achieve breakthroughs. Then, there’re more certainty in long-term performance and valuation growth of JD Health.
PepsiCo Inc: Financial Forecasts, DCF & Comparables Valuation, ESG & Other Risks (08/22)
- PepsiCo reported a decent result in the quarter as the business momentum continued in spite of ongoing geopolitical and macroeconomic volatility and greater levels of inflation over the markets.
- The company delivered an all-aroubd beat driven by organic revenue growth of double digits in the quarter.
- We provide the stock of PepsiCo with a ‘Hold’ rating with a revision in the target price.
Restaurant Brands International: Increased Digital Push Through New Agencies & Other Drivers
- Restaurants Brands International has been facing a difficult and uncertain environment because of ongoing wage and commodity inflation, broader macro uncertainties, and rising interest rates impacting the restaurant industry.
- During the quarter, Restaurant Brands raised menu prices to help offset rising freight and food costs.
- We provide a ‘Hold’ rating on the stock of Restaurants Brands International with a revision in the target price.
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