In today’s briefing:
- Hang Seng Index (HSI) Rebalance: Still Baby Steps to Get to 100 Members
- ECM Weekly (25th Nov 2024) – SF, Kioxia Digico, Pony, Finetoday, Saint Bella, Zinka, Keppel DC
- Travelsky (696): Sleepy Giant
- Tech News This Week: Smartphone, Mediatek, Nvidia, Qualcomm, TSMC, Super Micro, SK Hynix, Samsung
- [Kuaishou (1024 HK, BUY, TP HK$72) TP Change]: C3Q24 Review: Value Stocks Face Picky Investors
- China Consumption Weekly (25 Nov 2024): Xiaomi, Haier, Autohome, Xpeng, Full Truck, Tongcheng
Hang Seng Index (HSI) Rebalance: Still Baby Steps to Get to 100 Members
- Kuaishou Technology (1024 HK) and New Oriental Education (9901 HK) will be added to the Hang Seng Index in December while New World Development (17 HK) will be deleted.
- Estimated one-way turnover is 2.7% and the estimated round-trip trade is HK$10.89bn (US$1.4bn) with over 1 day of ADV to trade in the adds and the delete.
- The index committee has net added 1 stock to the Hang Seng Index this year to go from 82 to 83 constituents. Reaching the 100-member target will drag into 2026.
ECM Weekly (25th Nov 2024) – SF, Kioxia Digico, Pony, Finetoday, Saint Bella, Zinka, Keppel DC
- Aequitas Research’s weekly update on the IPOs, placements, lockup expiry and other ECM linked events that were covered by the team over the past week.
- On the IPOs front, S.F. Holding (6936 HK) and Kioxia Holdings (6600 JP) launched their much awaited IPO, while we had a new launche in Australia in as well.
- On the placements front, Keppel DC REIT (KDCREIT SP) undertook a large placement
Travelsky (696): Sleepy Giant
- Despite being a key beneficiary in travel and tourism in China, the rather muted growth in the first half does not bode well for Travelsky Technology Ltd H (696 HK) .
- YTD share price performance has reflected the above, but the deep discount valuation to Trip.com (TCOM US) might be temporary.
- In the near term, the company’s share price will not rebound as the company has less upside participation compared to Airlines and OTA.
Tech News This Week: Smartphone, Mediatek, Nvidia, Qualcomm, TSMC, Super Micro, SK Hynix, Samsung
- Smartphone demand remains slow, that contributes to weak outlook for commodity DRAM. Nvidia / Mediatek and Qualcomm AI PC chips should be launched mid-2025.
- Nvidia allocation of TSMC CoWoS remains at 60% in 2025, capacity doubles, Data Center GPU revenue will double? TSMC 2nm-16A roadmap on track.
- SK Hynix is now ahead of Samsung in HBM, DDR5, 3D NAND and SSD. Meanwhile, Samsung is buying back shares.
[Kuaishou (1024 HK, BUY, TP HK$72) TP Change]: C3Q24 Review: Value Stocks Face Picky Investors
- Kuaishou reported C3Q24 revenue, IFRS operating profit,and IFRS net income in-line with our estimates and consensus.The only negative was that C4Q24 guidance for operating margin missed consensus and our estimate;
- Within mid-sized Internet platforms, Kuaishou lacks fresh secular driver, putting its stock under pressure. Advertising and GMV growth still outpace the industry and some peers. The stock is undervalued;
- We maintain our BUY rating and slightly revised down TP to HK$72 to make up for the higher-than-expected OPEX guidance.
China Consumption Weekly (25 Nov 2024): Xiaomi, Haier, Autohome, Xpeng, Full Truck, Tongcheng
- Haier plans to acquire all shares of Autohome and dismiss 30% of Autohome’s employees.
- In 3Q24, Xiaomi’s revenue grew by 30% YoY or 17% YoY without electric vehicle.
- In 3Q24, Tongcheng Travel’s revenue increased by 51% YoY with gross profit up by 29% YoY.
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