In today’s briefing:
- Quiddity A/H Premium Tracker (To Oct20): Volatility Up Further, Wide Spreads Even Wider. Messy²
- Oriental Land: Google Search Signals Potential Miss; Guidance Could Challenge Consensus Optimism
- KOSPI200 Index Rebalance Preview: The Tail End
- China Internet Weekly (23 Oct 2023): AAPL, Alibaba, JD.com
- Quiddity HK Connect SOUTHBOUND Flows (To 20 Oct 23): Meituan, SMIC, Great Wall!
- Xinhua Winshare (811 HK): Still the Place to Be
- Porsche: Entering The World Of Luxury
- Quiddity Mainland Connect NORTHBOUND Flows (To 20 Oct 2023): BYD/Changan IN But BIGLY Net Selling
- Sitoy (1023 HK): Deep Value ~50% of Mkt in Cash, 4x PE and 12.5% Dividend Yield
- Dongfeng Motor to Buy Assets From Stellantis JV to Consolidate Manufacturing
Quiddity A/H Premium Tracker (To Oct20): Volatility Up Further, Wide Spreads Even Wider. Messy²
- The Somewhat-Brand-Spanking New (10 weeks old) A-H Monitor has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
- We used to do it. We brought it back better, with lots of cool interactive tables, and charts, heat maps, and comparative data. And 50 Trade Recommendations.
- The last 10wks (since the start of the new Tracker and Portfolio 11 weeks ago) have seen net portfolio performance of +0.50%, +1.35%, +0.14%, +0.47%, +0.15%, +0.12%, -0.29%, -0.71%, -68%.
Oriental Land: Google Search Signals Potential Miss; Guidance Could Challenge Consensus Optimism
- During 2QFY24, Tokyo Disneyland and Tokyo DisneySea both saw a QoQ decline in Google search interest.
- This suggests to us that there might be an earnings miss when Oriental Land (4661 JP) reports its FQ2 results on October 30, 2023.
- Additionally, there are potential downside risks to both FY24 and medium-term consensus projections following a revised FY24 guidance announcement.
KOSPI200 Index Rebalance Preview: The Tail End
- With the review period nearly complete, we expect 7 changes to the Korea Stock Exchange KOSPI 200 (KOSPI2 INDEX) in December. Couple of changes are low probability though.
- The Materials sector could be the biggest gainer at the rebalance while nearly all deletions could come from the Consumer Discretionary sector.
- The impact on the potential inclusion ranges from 0.15-15 days of ADV while the impact on the potential deletions varies from 1.7-8.1 days of ADV.
China Internet Weekly (23 Oct 2023): AAPL, Alibaba, JD.com
- Apple fired five employees of China App Store for corruption.
- Yonghui follows Alibaba’s Freshippo outlets to open discounted stores this year.
- JD.com sued 44 companies and 3 persons for abusing JD’s trademark.
Quiddity HK Connect SOUTHBOUND Flows (To 20 Oct 23): Meituan, SMIC, Great Wall!
- This is the somewhat brand-spanking-new Quiddity HK Connect SOUTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and Mainland Connect NORTHBOUND Monitor.
- The data on liquid names is presented for 5 days and four weeks and anything seen can be ranked in tables or selected and charted (names, sectors, outperformance, etc).
- We like the nifty interactive tables+charts (please play with them!) and we welcome feedback. This 5-day week saw HKD 3.9bn+ of net buying. That makes 13 weeks of net inflows.
Xinhua Winshare (811 HK): Still the Place to Be
- The recent pullback in the share price of Xinhua Winshare (811 HK) is overdone, and it is now on attractive 4.5x PER, 6.7% yield, and 0.46x P/B.
- It has minimal exposure to economic slowdown and global geopolitical tension. There is solid revenue growth and margin expansion in 1H23, and demand is totally domestic and resilient.
- Net cash amounted to 109% of its share price and this has not yet included Rmb2.2bn of equity investment on hand. Still, it is expected to generate ROE of 12%.
Porsche: Entering The World Of Luxury
- Porsche is one of the world’s most successful luxury automotive manufactures, specializing in high-performance sports cars, SUVs, and sports limousines
- The investment case revolves around Porsche’s continued sustainable structural growth, electrification, best-in-class technology, luxury nature, and sustainability capabilities
- The stock price is trading near its IPO price of September 2022, at a 25% discount to summer highs.
Quiddity Mainland Connect NORTHBOUND Flows (To 20 Oct 2023): BYD/Changan IN But BIGLY Net Selling
- This is the somewhat-brand-spanking-new Quiddity Mainland Connect NORTHBOUND Monitor. We work off the same presentation as the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor.
- The performance/spread/flow data on liquid names is presented for 5 days and 4 weeks and anything seen can be ranked in tables or selected/charted (names, sectors, outperformance, etc).
- Please play with nifty interactive tables+charts. We welcome feedback. This 5-day week saw RMB 24bn+ of net selling. Back to Bigly Selling!
Sitoy (1023 HK): Deep Value ~50% of Mkt in Cash, 4x PE and 12.5% Dividend Yield
- We examine the value proposition of Sitoy Group Holdings (1023 HK) trading at 4x PE with a 12.5 % dividend yield ( assuming a sustainable 50% payout ratio ).
- The company has 400 mn HKD net cash and real estate worth 690 mn HKD on its balance sheet. This compares favorably with its 840 mn HKD market cap.
- The major drawback of investing in the company is its track record, which shows a steadily declining revenue trend and a fluctuating ROCE (currently 11%).
Dongfeng Motor to Buy Assets From Stellantis JV to Consolidate Manufacturing
- Dongfeng Motor Group Co. Ltd. will acquire automotive assets from its joint venture (JV) with Stellantis NV, as part of the carmaker’s strategy to consolidate its manufacturing resources amid weak car sales in China.
- Dongfeng Peugeot Citroën Automobile Co. Ltd. (DPCA) will sell assets including certain land use rights, buildings, and structures in Wuhan and Xiangyang in Hubei province to Dongfeng Motor in a 1.71 billion yuan ($234 million) deal, the latter said in a filing to the Hong Kong Stock Exchange Thursday.
- The assets have been used by DPCA mainly to produce its existing Peugeot, Citroën and Fukang models, the filing said, and the JV will continue making the cars under a 10-year leasing agreement.
💡 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
