In this briefing:
- HK Connect Discovery – February Snapshot (Tencent, COFCO Meat)
- 58.com (WUBA): Weak Membership Growth Suggests More Volatile Performance, 17% Downside
1. HK Connect Discovery – February Snapshot (Tencent, COFCO Meat)
This is a monthly version of our HK Connect Weekly note, in which I highlight Hong Kong-listed companies leading the southbound flow weekly. Over the past month, we have seen the outflow continue from January. In February, we have seen Chinese investors were selling Tencent in February after buying Tencent in January. Chinese investors were also buying domestic automotive manufacturers and Macau gaming sectors.
Our February Coverage of Hong Kong Connect southbound flow
- HK Connect Discovery Weekly: China Tower, Geely, COFCO Meat (2019-02-15)
- HK Connect Discovery Weekly: Geely, Great Wall Motor and Sands China (2019-02-22)
2. 58.com (WUBA): Weak Membership Growth Suggests More Volatile Performance, 17% Downside
* We believe that the stagnancy in membership was due to the new competitor Ke.com and will make total revenues more volatile in the future.
* We assume total revenues will slow down, but the operating margin will be stable in 2019.
* We compare WUBA’s expected P/E for 2019 with other vertical platforms in China and conclude 17% downside.
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