In today’s briefing:
- Ant Group’s $6.0bn Buyback Move Casts Doubt on IPO Prospects
- China Tourism Duty Free Corp (601888. CH): Is Now Good Time for Bottom-Fishing?
- China Internet Weekly (10Jul2023): Meituan, Alibaba, Ant Group, Tencent
- Z Holdings: Yahoo Shopping Falling Further Behind Amazon and Rakuten
- Bumrungrad Hospital (BH TB): International Business Is Roaring Back; Greenfield Project Approved
- [Bilibili (BILI US, SELL, TP US$12.3) TP Change]: The Launch Of “Uma Musume” May Face More Delay
- Hansoh Pharmaceutical (3692.HK)- Positive Growth in 2023, but Valuation Turning Point Hasn’t Arrived
Ant Group’s $6.0bn Buyback Move Casts Doubt on IPO Prospects
- China’s regulators on Friday imposed Ant Financial Services Group (6688 HK) with a fine of RMB 7.12bn. A day later, Ant Group unveiled a share buyback program worth $6bn.
- The last time media created a positive narrative around Ant Group was in January 2023 when Jack Ma relinquished control of the company.
- However, the media excitement was short-lived as Alibaba Group Holding (9988 HK)‘s share price quickly resumed a downward trend after rising by around 22%.
China Tourism Duty Free Corp (601888. CH): Is Now Good Time for Bottom-Fishing?
- CDF’s 1H23 preliminary results suggest that business recovery remains on track. Voices of bottom-fishing are getting louder as free fall in its share price already erased 50% market cap YTD.
- We believe the dynamics have fundamentally changed compared to three years ago when CDF was the stock market darling. Investors need be aware of the anchoring effect in making decisions.
- Moderate growth, pressured margin and contracted valuation multiple will be the new reality facing investors of the stock in our view. Wait for better entry point.
China Internet Weekly (10Jul2023): Meituan, Alibaba, Ant Group, Tencent
- Meituan’s food delivery has taken 20% of the Hong Kong market share in its first month’s operations.
- The authorities suggests that they will not further restrict financial apps such as AliPay of Ant Group.
- Tencent’s WeChat Pay charged a money transfer commission, but it exempted university campus the next day.
Z Holdings: Yahoo Shopping Falling Further Behind Amazon and Rakuten
- Last year was pivotal for Yahoo Japan: despite record group performance, GTVs in e-commerce actually fell despite continued strong growth in the sector
- In a recent survey, Amazon was the most frequently used e-commerce mall at 49.6%, followed by Rakuten (32%), but Yahoo was far, far below at just 9.8%.
- Yahoo Shopping is now not only less popular with consumers, even merchants are dissatisfied – which is saying something when the service is essentially free.
Bumrungrad Hospital (BH TB): International Business Is Roaring Back; Greenfield Project Approved
- Bumrungrad Hospital Pub Co (BH TB) recorded 48% YoY increase in revenue from hospital operation to THB6 billion in 1Q23, mainly driven by 78% YoY revenue growth from non-Thai patients.
- International patients contributed 55% of total revenue in 1Q23. Middle East and Indochina remained the two most important growth drivers, with YoY revenue growth of 147% and 60%, respectively.
- The company is constructing a 150-bed boutique hospital in Phuket, one of the world’s most coveted island travel destinations, thereby opening immense opportunity for medical tourism.
[Bilibili (BILI US, SELL, TP US$12.3) TP Change]: The Launch Of “Uma Musume” May Face More Delay
- We cut our revenue estimations for 2H23, mainly due to increased uncertainty surrounding the launch of “Uma Musume.”
- We also lower our estimations for live streaming due to concerns about macro factors. We slightly raise our estimations for BILI’s advertising business…
- …as we anticipate that it will benefit from gaming and e-commerce. Our rev./non-GAAP net income are 1.0% and (6.4%) vs cons in 2Q23. Cut TP to $12.3, maintaining “Sell” rating.
Hansoh Pharmaceutical (3692.HK)- Positive Growth in 2023, but Valuation Turning Point Hasn’t Arrived
- VBP would continue to have an impact on Hansoh’s generic drug business in 2023.Such negative impact would gradually fade from 2024 as big varieties have all been included in VBP.
- The core difference between Hansoh and Hengrui is that someone similar to Zhang Lianshan’s role arrived late, resulting in a slower start and weaker overall framework for innovation drug business.
- Hansoh Pharmaceutical (3692 HK) is still in the process of business transformation. Before the harvest time of innovative drug pipeline comes, Hansoh’s valuation growth would still be a long-term story.
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