In today’s briefing:
- BYD Vs Tesla: 1H 2024 Updates
- Sinotrans (598 HK): Attracted by the Yield
- Weekly Consumer Tales: Meituan’s Margin Gain, H&H’s Pain, PDD’s Stock Crash
- China Comm Const (1800 HK): The Preferred Infrastructure Play
- China Consumption Weekly (2 Sep 2024): Alibaba, Huawei, Kuaishou, Li Auto, Haidilao
- Chinese Express H124 Earnings | Worst of Price Competition Over | Look for Bargains | BUY SF, Yunda
BYD Vs Tesla: 1H 2024 Updates
- Recap of 1H 24 on two of the largest and most influential EV makers; Tesla (TSLA US) and BYD (1211 HK) .
- BYD performance is superior to Tesla yet it trades at a discount to Tesla, notably 0.2x vs 3x PEG.
- BYD faces tailwinds in North America and the EU, but those are not its main destinations.
Sinotrans (598 HK): Attracted by the Yield
- Despite an 11% drop in profit in 1H24, Sinotrans (598 HK) has maintained interim DPS at Rmb0.145. This is a sign that the full-year dividend will stay intact, yielding 8.9%.
- The logistics segment has experienced pressure, but strategies are in place to boost revenue and reduce costs. Forwarding and e-commerce segments, meanwhile, are resilient.
- We were too early in turning bearish in 2023. With US rate heads lower, the near-term market focus is that it is a solid yield play.
Weekly Consumer Tales: Meituan’s Margin Gain, H&H’s Pain, PDD’s Stock Crash
- Welcome to Consumer Tales & Trends, your weekly roundup of the latest corporate developments, investment reports and sector events in the consumer industry.
- Meituan (3690 HK) reported robust revenue and profit growth amidst broader struggles in the F&B industry raises questions on industry dynamics and momentum sustainability.
- Health And Happiness (1112 HK) faced another quarter of declining revenue and profits, but reported a significant rise in cash generated from operations thanks to improved inventory turnover.
China Comm Const (1800 HK): The Preferred Infrastructure Play
- Despite a 3.1% drop in profit, China Communications Construction (1800 HK) is the best-performing infrastructure play in 1H24 as peers have logged a 15-19% profit decline.
- High taxation and lower exchange gains are drags on earnings. However, margins have expanded and new contracts increased by 8.4%, suggesting healthy fundamentals.
- Reduction in BOT capex investments is welcomed and it has also declared first-time interim DPS. We expect new contract momentum to accelerate in 2H24.
China Consumption Weekly (2 Sep 2024): Alibaba, Huawei, Kuaishou, Li Auto, Haidilao
- The tension between the government and Alibaba was eased, as the authorities closed the rectification course on Alibaba.
- Huawei’s total revenue increased by 34% YoY in 1H24, as the smartphone sales surged.
- Kuaishou will provide a subsidy of US$56 million to e-commerce broadcasters.
Chinese Express H124 Earnings | Worst of Price Competition Over | Look for Bargains | BUY SF, Yunda
- We compare H1 revenue growth and Adjusted EBITDA margins of six companies
- We then add needed context to aid understanding of each company’s results
- We think it’s time to look for bargains in express; focus on SF Holding, Yunda
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