In today’s briefing:
- Playmates Toys: 1H23 Results Show Strong TMNT Potential
- [Meituan (3690 HK, BUY, TP HK$165) Earnings Review]: Counterstrike Remains Effective… Maintain BUY
- Ricegrowers Limited (SunRice) – AGM Commentary Supports RaaS Estimates
- Monthly Chinese Tourism Tracker | July Outbound Firm | Group Tour Impact | Trip.com Q2 (August 2023)
Playmates Toys: 1H23 Results Show Strong TMNT Potential
- Playmates Toys (869 HK) reported strong 1H23 results on the back of initial demand for TMNT toys. Revenues were up 30% and operating profits increased 3x.
- Management remains optimistic for 2H23 on the back of continued excitement for TMNT movie and follow-up series on Paramount+.
- Playmates Toys trades at 5x FY23 P/E and >1x P/E on an ex-cash basis. The company also declared another 2c interim dividend.
[Meituan (3690 HK, BUY, TP HK$165) Earnings Review]: Counterstrike Remains Effective… Maintain BUY
- Meituan reported CY2Q23 rev./non-IFRS net income in-line/70% vs. cons., and in-line/28% vs. our estimate. Increased spending on in-store competition was offset by abundant rider supply that lowered food delivery cost.
- We raise our 3Q net margin est. by 3ppts as (1) the in-store counterattack against Douyin has been a success, (2) CGB spending to counter Duoduo Maicai has remained restrained.
- Initial results of the in-store counterattack showed positive results, while FD margin continues to benefit from ample riders. We maintain Meituan’s BUY rating and HK$ 165 TP.
Ricegrowers Limited (SunRice) – AGM Commentary Supports RaaS Estimates
- Ricegrowers Limited, trading as SunRice (ASX:SGLLV), held its AGM last week and provided some updated commentary around trading for FY24.
- Most notably, the ‘strong momentum from H2 FY23 has continued into Q1 FY24’, remembering H2 FY23 EBITDA increased 37% on the pcp.
- Factors supporting this growth include the cycling of annualised price rises, additional pricing reviews, international market expansion, improvement in freight and logistics costs, and the ongoing recovery in the CopRice business.
Monthly Chinese Tourism Tracker | July Outbound Firm | Group Tour Impact | Trip.com Q2 (August 2023)
- Compared to depressed traffic from last year, outbound travel in July was up dramatically; strong M/M growth versus June suggests the outbound recovery still has legs
- Does China’s relaxation of group travel to Japan and Korea matter? We offer context and conclude the change is helpful, but not a “game-changer” for overall travel demand
- We also review July domestic traffic and preview Trip.com’s Q2 results (out Sept 4th)
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