In today’s briefing:
- JM Financial: An Undervalued Gem Poised for Breakout Growth
- China Consumption Weekly (16 Sep 2024): Alibaba, Tencent, JD.com, Kuai, Hive Box
- Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 13)
- Geely (175 HK): Sales Volume Accelerated in August
- Intel’s Make-or-Break Moment: How the U.S. Government is Fighting to Save America’s Chip Giant
- Orient Overseas Intl (316 HK): Don’t Overlook Its Yield, Backed by Net Cash
- Ingredion: Innovations Redefining the Taste and Texture of Modern Food
- PC Monitor: Microsoft Copilot Wave 2 Unveils Major AI Boost; Reiterate Structural Long for PC Makers
- Max Healthcare (MAXHEALTH IN): Continues to Strengthen Presence in North India
- Jiangsu Hengrui Medicine (600276.CH) – Share Price Is at Risk of Correction
JM Financial: An Undervalued Gem Poised for Breakout Growth
- JM Financial has decadal experience of being the powerhouse of financial services giant.
- The company has been a bad capital allocator for the years and hence could not participate in the mega bull run.
- What makes it interesting is a company is changing its strategy of capital allocation while cherry on the cake is attractive valuations and promoter buying.
China Consumption Weekly (16 Sep 2024): Alibaba, Tencent, JD.com, Kuai, Hive Box
- Alibaba’s Taobao and Tmall apps decide to accept WeChat Pay, the online payment way from Tencent.
- JD announced that it will raise employee salaries up to 20 months within two years.
- Hive Box, the market dominator of parcel locker in China, submitted its IPO proposal.
Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 13)
- Hong Kong Conglomerate Sector is showing renewed strength with Materials and Energy under pressure. HK market 30 day volatility at 5 year low as market continues to de-risk.
- Hengan International Group (1044 HK) chart broke down from its Descending Triangle pattern after reporting its 1H24 results. J&T Global Express (1519 HK) broke down from its double bottom pattern.
- China Galaxy Securities (H) (6881 HK) price relative to the MSCI China index broke to a new high. The company reported good results in a difficult environment for China brokers.
Geely (175 HK): Sales Volume Accelerated in August
- The sales volume growth rate began to accelerate in August.
- Geely’s revenue grew strongly by 39% YoY in 2Q24 and 47% YoY in 1H24.
- The operating margin had improved YoY for the past one year and a half.
Intel’s Make-or-Break Moment: How the U.S. Government is Fighting to Save America’s Chip Giant
- Intel Corporation, once the unchallenged leader in the semiconductor space, has recently found itself in a precarious position.
- With its stock prices plummeting and revenues falling, Intel is struggling to regain its footing in a market dominated by foreign giants like TSMC and Samsung.
- The U.S. government, through multiple initiatives and significant financial commitments, has stepped in to rescue the beleaguered company, seeing it as crucial to both national security and economic competitiveness.
Orient Overseas Intl (316 HK): Don’t Overlook Its Yield, Backed by Net Cash
- Orient Overseas International (316 HK) sits on decent yields of 12% for FY24 and 9.6% for FY25. Its net cash (66.2% of the share price) can support such dividends.
- Despite the retreat from the recent peak, the spot freight rates are 9.7% and 145% higher than 1H24 and 2H23 respectively, pointing to better 2H24 earnings.
- Operationally, it recorded the first YoY realised rate increase in 2Q24 after 6 quarters of consecutive decline. Its load factor also grew 2.3pp YoY in the quarter.
Ingredion: Innovations Redefining the Taste and Texture of Modern Food
- Innovation trends and patent filings within the food industry saw significant upswing over the year in the areas of natural ingredients and methods to manufacture vegan proteins.
- Ingredion Ingredion Inc (INGR US) has a leadership position in the fast growing Clean Label, Sugar Reduction and Plant-Based Protein Technologies
- On a relative basis the stock despite better profitability metrics trades at a discount to the country-sector median and on an absolute basis at about 20% discount to FV.
PC Monitor: Microsoft Copilot Wave 2 Unveils Major AI Boost; Reiterate Structural Long for PC Makers
- Microsoft today announced a major Copilot update, called “Wave 2”, introducing a new collaborative interface and enhanced Copilot capabilities across all major Office apps.
- Copilot continues to gain momentum with large corporations, as Microsoft announced today that Vodafone has adopted it for 68,000 employees.
- We remain Structurally Long PC Makers – We continue to believe Microsoft’s Copilot will drive PC upgrades as users recognize the productivity benefits of faster ‘AI PCs’.
Max Healthcare (MAXHEALTH IN): Continues to Strengthen Presence in North India
- Max Healthcare Institute (MAXHEALT IN) to acquire controlling stake in Jaypee Healthcare (JHL), which owns 3 hospitals in Uttar Pradesh, including the renowned 500-beds Jaypee Hospital, Noida.
- JHL reported revenue of INR4.21B and EBITDA of INR70M in FY24. With an EV of INR16.6B, the deal values JHL at EV/EBITDA of 23.7x, which seems reasonable.
- This acquisition will significantly enhance Max Healthcare’s network and strengthen its leadership position in NCR, a region which is home to around 46M people.
Jiangsu Hengrui Medicine (600276.CH) – Share Price Is at Risk of Correction
- On the surface, it seems that Hengrui’s performance growth in 24H1 is very high, but if excluding the upfront payment from Merck, the Company’s performance actually falls short of expectations.
- Our forecast of revenue growth in 2024, 2025, 2026 (excluding Merck’s upfront payment) is 12% YoY, 8% YoY, 15% YoY, respectively. By 2026, Hengrui may still suffer from VBP.
- Hengrui is overvalued and reasonable P/E is about 30 (or lower). We also don’t think Hengrui’s valuation should be higher than that of BeiGene. Current high valuation cannot be justified.
💡 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
