In today’s briefing:
- Bajaj Finance (BAF): A Sustained Growth Powerhouse
- [KE Holdings (BEKE US, BUY, TP US$24) Target Price Change]: Benefiting from Structural Change
Bajaj Finance (BAF): A Sustained Growth Powerhouse
- Q3FY24 performance was slightly below expectation led by NIM margin compression and marginally elevated credit costs. Certain regulatory restrictions also dampened growth and profitability.
- However, from a medium-term perspective, BAF is setting up well to be a sustained growth powerhouse. It has widened its product catalogue and is deepening the product availability per branch.
- Led by growth tailwinds and market share gains, BAF has potential to grow at 25%+ for a prolonged period. The current headwinds seem temporary and provide a buying opportunity.
[KE Holdings (BEKE US, BUY, TP US$24) Target Price Change]: Benefiting from Structural Change
- We expect KE Holdings (Beike) C4Q23 revenue to be in-line with consensus, with non-GAAP NI 15.6% higher than consensus, mainly due to better existing home sales.
- Although overall home living demand remains lukewarm in 2023, the structural substitution from purchasing new home to existing home has accelerated, benefiting Beike, in our view.
- We maintain the stock as BUY rating and trim down TP by US$0.5 to US$24.0/ADS to factor in the weak new home sales.
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