In today’s briefing:
- China Longyuan (916 HK): A De-Rating Too Excessive
- Cyberagent (4751) | More than a One-Hit Wonder
- China Internet Weekly (25Jul2022): Alibaba, Tencent, NetEase, IQiyi, Miss Fresh
- China Resources Medical – Hard to Earn High Profits Due to Poor Business Model and Policy Risk
- Reinventing American Healthcare
China Longyuan (916 HK): A De-Rating Too Excessive
- Share price of China Longyuan Power (916 HK) has been under pressure over the last two weeks due to concern on future offshore wind power project return.
- We believe the low tariff of Rmb0.19/kWh won by a Huaneng Power Group consortium in Fujian is more an exceptional case and should not be taken as a new normal.
- China Longyuan’s growth has been well secured by its project pipeline as well as 21GW potential injection from parent. This round of de-rating is just too excessive.
Cyberagent (4751) | More than a One-Hit Wonder
- Supersized profits in the game division will of course normalise, but there are strategies to extend profits in the segment
- At 7x EV/EBITDA we think the market has become too pessimistic on the long-term outlook for not only games, but also internet advertising and media
- The company will release Q3 results in three days time – we expect a them to beat consensus
China Internet Weekly (25Jul2022): Alibaba, Tencent, NetEase, IQiyi, Miss Fresh
- Alibaba’s Freshippo expands to two inland cities, which reflects its success in coastal areas.
- Online game’s revenue and players decreased for the first time in 14 years.
- NetEase set up the second game studios in the United States.
China Resources Medical – Hard to Earn High Profits Due to Poor Business Model and Policy Risk
- China Resources Medical has more advantages than ordinary private medical institutions in terms of its State-owned Key Enterprises background, delicacy management, cost reduction and efficiency increase, resources/talents, industrial chain layout.
- However, due to the policy environment, China Resources Medical just represents “a small area of relatively little risk in a large area that is clearly risky”.
- General hospitals have poor business model and profitability. Despite its strength, we are conservative about the outlook of China Resources Medical, which is difficult to achieve a higher valuation.
Reinventing American Healthcare
- One trend that has accelerated in the last few quarters is the pace of acquisitions being made by cash-rich companies.
- The significant Macroeconomic uncertainties that lie ahead, coupled with record cash balances at the largest firms on Wall Street, have only accelerated the pace of industry consolidation.
- It’s no secret that high-quality De-SPACs with strong earnings have been prime takeover/acquisition targets in recent months after seeing their shares take a beating through the year.
💡 Before it’s here, it’s on Smartkarma
Sign Up for Free
The Smartkarma Preview Pass is your entry to the Independent Investment Research Network
- ✓ Unlimited Research Summaries
- ✓ Personalised Alerts
- ✓ Custom Watchlists
- ✓ Company Data and News
- ✓ Events & Webinars
