In today’s briefing:
- Alibaba: Accelerating Retail Sales, and a Depressed Comp Base, Bode Well for Near-Term Earnings
- Meta Platforms ($META)
- Fast Retailing (9983) | Elevated Multiple and Guidance Risk
- China Internet Weekly (26Sep2022): S.F., STO, YTO, Yunda, JD Logistics, Alibaba, Baidu, Trip.com
- Classys (214150 KS): Overseas Expansion +Portfolio Enlargement = Consistent & Sustainable Growth
- Xinjiang Goldwind (2208 HK): Getting to a More Attractive Point Again
Alibaba: Accelerating Retail Sales, and a Depressed Comp Base, Bode Well for Near-Term Earnings
- In line with previously reported trends in Chinese retail sales growth, the large Chinese eCommerce operators reported a decline (or contraction) in GMV growth in 2Q2022.
- Following a contraction between March and May this year, China’s retail sales growth has returned to growth since June, which continued in July and accelerated in August.
- Alibaba’s next reported quarter’s annualised growth will be on an extremely depressed base.
Meta Platforms ($META)
- The technology sector is full of polarizing personalities, many of whom stand at the helm of some of the largest companies in the world.
- Whether that be with the brash antics and lofty ambitions of Elon Musk, the undoubtable brilliance tainted by Bitcoin Maximalism exhibited by Jack Dorsey, the SEC-challenging twitter threads blasted by Brain Armstrong, or the naivety potentially falsely portrayed by Vlad Tenev, there is no shortage of individuals that, love or hate, you can’t help but pay attention to.
- Mark Zuckerburg is one of those people. The man that steers the ship of of Metaverse has clear technical aptitude, a far-cry away from the resume full of consulting experience and MBAs possessed by a lot of modern c-suite executives.
Fast Retailing (9983) | Elevated Multiple and Guidance Risk
- Fast Retailing’s share price has risen 24% year-to-date, outperforming the index and global peers
- The share price has been driven by multiple expansion, which we believe is now at risk of reversing
- With an uncertain economic backdrop, we believe management may issue conservative guidance for the next fiscal year. We turn Bearish.
China Internet Weekly (26Sep2022): S.F., STO, YTO, Yunda, JD Logistics, Alibaba, Baidu, Trip.com
- Revenues of major express parcel companies grew rapidly in August.
- JD logistics will provide logistics service to live streaming retailers on Douyin.
- In 2Q22, revenue of Trip.com decreased by 32% YoY and operating profit turned negative.
Classys (214150 KS): Overseas Expansion +Portfolio Enlargement = Consistent & Sustainable Growth
- Classys (214150 KS), under new management, has announced a treasury stock acquisition program of KRW20 billion through March 2023. As of June 2022, Classys had cash equivalents of KRW68 billion.
- Global expansion of Classys’ latest lifting product, Shrink Universe is the near-term growth driver. The product is seeing steady domestic demand, with cumulative sales exceeding 1,000 units.
- In August Classys received approval for its new skin care product Volnewmer. The company is expected to start selling Volnewmer in Q3 and initially targeting 100 units for the device.
Xinjiang Goldwind (2208 HK): Getting to a More Attractive Point Again
- Xinjiang Goldwind Science & Technology H (2208 HK) had a tough 2Q22; but with the recent retreat in share price, the stock appears attractive now at 8.5x FY23F PER.
- Goldwind has many growth initiatives backing its outlook. These include solid order backlog, upside on gross margin, contribution from wind farms and growth from the servicing business.
- Its WTG backlog of 24.1GW is 1.3x higher QoQ and well covers revenue for next two years. Further strategic disposals of wind farm will help realising underlying asset values.
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