In today’s briefing:
- Why Evergrande’s Bankruptcy Filing Is a Positive Development
- Fu Shou Yuan (1448 HK): More than Just a Recovery from Low Base
- JD Logistics (2618 HK): 2Q23, External Revenue Still Grew Rapidly, 70% Upside
- Taiwan Dual Listings Monitor: ADR Premiums Easing Down With Markets
- Novartis: The Beginning Of A Turnaround Story
- [Atour (ATAT US, BUY, TP US$36.5) TP Change]: Demand Supply Imbalance to Sustain…maintain BUY
- JD Health (6618.HK) 23H1 – The Beautiful Story Is Over; It’s Time to Face Reality
Why Evergrande’s Bankruptcy Filing Is a Positive Development
- Evergrande’s filing in itself does not signify a deterioration in its financials; it was already insolvent as of end 2021.
- The bankruptcy filing provides the benefits of automatic stay and is a necessary step to validate the Group’s offshore restructuring plan.
- Evergrande’s long term viability still depends on recovery of the China property market.
Fu Shou Yuan (1448 HK): More than Just a Recovery from Low Base
- Fu Shou Yuan (1448 HK) has a solid 1H23 with net profit jumped 78% YoY. Its margin reached the highest level, reflecting resurgance in demand and good cost control.
- Both volume and ASP growth led us to believe there is positive room for profitability improvements. Its balance sheet has also strengthened with net cash equals 17% of share price.
- A 18.4% increase in pre-need contracts signed suggests encouraging underlying demand. More M&As are added drivers to earnings prospects.
JD Logistics (2618 HK): 2Q23, External Revenue Still Grew Rapidly, 70% Upside
- In 2Q23, total revenue grew by 31% YoY and revenue from external customers grew by 56% YoY.
- The operating margin can still breakeven during the rapid growth.
- We believe the stock has an upside of 70% for yearend 2024. Buy.
Taiwan Dual Listings Monitor: ADR Premiums Easing Down With Markets
- We have seen a general easing in ADR premiums since end-July, coming down as global markets have fallen.
- TSMC’s premium is easing down from the highs of June.
- UMC and ChipMos ADR discounts appear to be bottoming given their historical range.
Novartis: The Beginning Of A Turnaround Story
- With its new more focused strategy implemented 18 months ago, Novartis continues to streamline its business activities
- Novartis’ pipeline has improved, and a new wave of promising drug candidates is coming and represents a major opportunity to regain momentum
- A strong H1 2023 gives confidence that we are at the beginning of a turnaround story. The Company screens cheap trading on 12x 2024e EPS (post Sandoz).
[Atour (ATAT US, BUY, TP US$36.5) TP Change]: Demand Supply Imbalance to Sustain…maintain BUY
- Atour reported 2Q23 revenue 9.5%/11.7% higher than our estimate/ consensus, which leads to non-GAAP NI 15.1%/21.1% higher than our estimate/ consensus respectively. Both retail and hotel business have positive contribution.
- We think the strong sales momentum in 2Q23 hotel business is likely to continue in 3Q23 due to the strong summer season but gradually eased in 4Q23.
- We maintain the stock as BUY rating, and raise TP by US$1.5 to US$36.5 to factor in the better operating efficiency in retail business.
JD Health (6618.HK) 23H1 – The Beautiful Story Is Over; It’s Time to Face Reality
- It is an indisputable fact that JD Health’s revenue growth has slowed down. The core reason is the industry beta brought by mobile Internet demographic dividend/COVID-19 dividend has faded away.
- JD Health’s performance could be under pressure in 2H23. If revenue growth continues to show a downward trend, whether the current profit margin/profitability can be maintained is a question mark.
- JD health is facing four major dilemmas, including both business and policy aspects. Long-term valuation outlook for JD Health is not optimistic. We advise investors to re-evaluate the Company.
💡 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
