Daily Brief Consumer: Li Auto, XPeng, Haidilao and more

In today’s briefing:

HSTECH Mar23 Index Review/Flows – Weibo IN, Ming Yuan Cloud OUT, BIGLY Flows on Li Auto & Xpeng
HSCEI Mar23 Index Review/Flows – Xpeng Added, China Feihe Deleted, Li Auto Sees A Bump Up
Haidilao (6862.HK): Growth Concerns Remain Despite Positive Profit Alert. Take Profit on Rally.

HSTECH Mar23 Index Review/Flows – Weibo IN, Ming Yuan Cloud OUT, BIGLY Flows on Li Auto & Xpeng

On Friday 24 February 2023, the Hang Seng Index Committee announced changes for the HSTECH Index – Weibo Corp (9898 HK) IN, Ming Yuan Cloud Group (909 HK) OUT.
Notably, the changes in FAF due to the new treatment for Dual Primary Companies means decent boosts in weight for XPeng (9868 HK) and Li Auto (2015 HK).
Of the three “major” indices, this one produces the most fun – US$900mm+ and 8.7% flow one-way. And the big flows are additive to the other indices.

HSCEI keeps its constituent count at 80 names, adds XPeng (9868 HK) and deletes China Feihe (6186 HK).
There are decent flows in this rebal, with Tencent (700 HK) and Alibaba Group (9988 HK) seeing selling, Meituan (3690 HK) seeing buying. Li Auto (2015 HK) sees FAF upweight.
Janaghan Jeyakumar, CFA had called the deletion of China Feihe, but had another name higher on the ADD list. 3.2% and HK$2.6bn one-way flow.

Haidilao issued a positive profit alert last Friday which beat our and market expectations by a big margin. Profitability improved mainly due to shutting restaurants and labor optimization.
We expect the news and the street’s earnings revision will drive near-term stock rally.
That said, growth challenges remain and will be under spotlight during 2023-24. The expected stock rally will just build more expectations in the price. Take profit from the rally.

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