In today’s briefing:
- China Internet Weekly (4Jul2022): Tencent, Alibaba, NetEase, JD.com, Trip.com
- KDDI (Buy) – Network Outage Is a Bad Look but Concerns Should Fade over Time
- SCB – Steady Lending, Capital Growth
- BBL : So Far so Good
- Alibaba Health Information Technology (241.HK) – It’s Not Easy to Break a Deadlock
- Z Holdings (4689) | SOTP Reveals Huge Upside
China Internet Weekly (4Jul2022): Tencent, Alibaba, NetEase, JD.com, Trip.com
- Alibaba CEO’s article appeared on a government journal, which can be a positive signal to non-state-owned companies.
- Prosus sells shareholdings in Tencent and JD.com to repurchase its own shares.
- Tencent is trying to use game technologies in other fields.
KDDI (Buy) – Network Outage Is a Bad Look but Concerns Should Fade over Time
- KDDI’s entire network was out over the weekend and whilst service has been restored, there are still sporadic complaints
- There are near-term risks for higher user churn and lost Q2 revenue, but these are on the margin and downside should be manageable (i.e. no change on company guidance)
- Looking past near-term weakness, KDDI remains an attractive defensive play
SCB – Steady Lending, Capital Growth
- SCB is well-positioned to benefit from the delta in tourism
- There will be a special dividend at mid-year, amount still unknown
- BitKub acquisition announced last year, remains pending, may not go through
BBL : So Far so Good
- Maintain BUY for BBL with a target price of Bt159.00. We like its strong balance sheet to withstand uncertainty, sustainable profit growth, potential benefits from an upcycle of interest rates
- A solid net profit in 2Q22 : We expect Bangkok Bank (BBL) to post a net profit of Bt7.4b in 2Q22, up 17% YoY (+4% QoQ).
- Lending growth in 2Q22 is expected to rise by 1% QoQ given an expected rise in business loans and loans made through the international network. Asset quality remains resilient
Alibaba Health Information Technology (241.HK) – It’s Not Easy to Break a Deadlock
- Alibaba Health’s core pharmaceutical direct sales business is facing challenges in terms of increasing competition as well as lower revenue growth and margins, dragging down the overall performance.
- The recent new policies about online drug sales on third-party digital healthcare platforms and online diagnosis and treatment would add more uncertainties on Alibaba Health’s business and outlook.
- If such unfavorable trend continues, the gap between Alibaba Health and JD Health would be wider. It’s not easy to break the deadlock. Investors may need to take heed.
Z Holdings (4689) | SOTP Reveals Huge Upside
- Z HD’s stock has been heavily sold with other tech stocks amid a rising interest rate environment
- However, we believe that the 3 core business segments are all performing strongly and will continue to gain share
- Using global comps, we believe that Z HD has more than 100% upside and is the top pick in the online space in Japan
Related tickers: Tencent (0700.HK), KDDI Corp (9433.T), Bangkok Bank Public (BBL.BK), Alibaba Health Information Technology (0241.HK), Z Holdings (4689.T)
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