China Archives | Page 20 of 153 | Smartkarma

In today’s briefing:

Offshore China ETFs Rebalance Preview: Big Price Moves Could Lead to Four Changes
Tencent (0700.HK): Revisiting Wechat Channels
FXI Rebalance Preview: Three Potential Changes as Big Moves Unfold
Auntea Jenny (Shanghai) Industrial Pre-IPO Tearsheet
Hutchmed China Ltd (13.HK/HCM.US) – 2023 Results Preview and Catalysts in 2024

Offshore China ETFs Rebalance Preview: Big Price Moves Could Lead to Four Changes

As of the review cutoff date of 19 February, there could be four changes for the iShares A50 China (2823 HK) / CSOP China A50 (HKD) (2822 HK) in March.
Shaanxi Coal Industry, Hygon Information Technology, CGN Power and China Everbright Bank could replace Aier Eye Hospital Group, Bank Of Ningbo, WuXi AppTec and Jiangsu Yanghe Brewery.
CGN Power (1816 HK) is a potential iShares China Large-Cap (FXI) (FXI US) inclusion while Hygon Information Technology C (688041 CH) is an inclusion to a global index in March.

Tencent (0700.HK): Revisiting Wechat Channels

By Eric Chen

One year ago, we published a note valuing Wechat Channels at US$29 billion by applying 25xPE to RMB8 billion net profit out of RMB37 billion revenue by 2024.
Fast forward to today, the platform’s priority has been further elevated by Tencent management in its attempt to pursue high quality growth.
We review our thesis on Wechat Channels based on recent channel checks and now believe that the platform could represent ~35% of Tencent’s total incremental profit from 2024 to 2026.

FXI Rebalance Preview: Three Potential Changes as Big Moves Unfold

With the review period complete, there could be 3 changes for the iShares China Large-Cap (FXI) (FXI US) in March.
CGN Power (1816 HK), Yankuang Energy (1171 HK) and China Coal Energy (1898 HK) could replace Wuxi Biologics (2269 HK), China Resources Beer (291 HK) and China Vanke (2202 HK).
Short interest on China Vanke (H) (2202 HK) and Yankuang Energy Group (1171 HK) is higher than the other stocks and there could be covering on implementation day.

Auntea Jenny (Shanghai) Industrial Pre-IPO Tearsheet

By Clarence Chu

Auntea Jenny (Shanghai) Industrial (AJI HK) is looking to raise US$300m in its upcoming Hong Kong IPO. The bookrunners on the deal are CITIC Securities, Haitong, and DFZQ.
Auntea Jenny (Shanghai) Industrial (Auntea) is a freshly-made beverage producer.
As per CIC, the firm operates the fourth largest network of freshly-made tea shops in China as of Sept 23, with an extensive reach into the lower-tier markets

Hutchmed China Ltd (13.HK/HCM.US) – 2023 Results Preview and Catalysts in 2024

HUTCHMED’s 2023 results are relatively certain. Fruquintinib had a strong start after obtaining approval in the US, with sales of about US$13-15 million in just more than a month.
Oncology/Immunology consolidated revenue would be in line with management’s performance guidance (US$450 to US$550 million) in 2023. There are promising data readout/NDA submission this year, which would be potential catalysts.
HUTCHMED has sufficient cashflow and does not require external financing. From 2024 to 2026, it will enter a period of accelerated growth in product revenue. Breakeven is achievable in 2025.

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Feb 19

Daily Brief China: UBTech Robotics, Tongcheng Travel Holdings , East Buy Holding , Citic Ltd, BeiGene , Trip.com and more

In today’s briefing:

HSCI Index Rebalance: 25 Adds, 29 Deletes & Changes to Southbound Stock Connect
HSTECH Index Rebalance: Tongcheng (780 HK) In; GDS (9698 HK) Out; Round Trip Trade US$1bn
Hang Seng Internet & IT Index Rebalance: Three Changes & One Big Surprise
Citic Limited – A Deeply Discounted Conglomerate in the Hang Seng Index
BeiGene (6160.HK/BGNE.US/688235.CH) – 2023 Results Preview and Undervaluation Concerns
China Consumption Weekly (19 Feb 2024): Ant Group, Great Wall Motor, JD.com, Baidu, Autohome

HSCI Index Rebalance: 25 Adds, 29 Deletes & Changes to Southbound Stock Connect

There are 25 adds and 29 deletes for the Hang Seng Composite Index (HSCI) at the March rebalance to take the number of index constituents down to 514.
We expect 21 of the 25 HSCI inclusions to be added to Stock Connect while we expect 27 of the 29 HSCI deletions to be removed from Southbound Stock Connect.
Since the start of the year, shares held though Southbound Connect have increased on 22 of the 29 HSCI deletions and there could be some unwinding in the weeks ahead.

HSTECH Index Rebalance: Tongcheng (780 HK) In; GDS (9698 HK) Out; Round Trip Trade US$1bn

As expected, Tongcheng Travel Holdings (780 HK) will replace GDS Holdings (9698 HK) in the Hang Seng TECH Index (HSTECH INDEX) at the close on 1 March.
Estimated one-way turnover is 3.9% leading to a round-trip trade of HK$7.74bn (US$988m). There is nearly 14x ADV to buy in Tongcheng Travel Holdings (780 HK).
Positioning in Tongcheng Travel (780 HK) does not appear to be very high, while positioning in GDS Holdings (9698 HK) is very high with a couple of deletions coming up.

Hang Seng Internet & IT Index Rebalance: Three Changes & One Big Surprise

There will be 3 changes for the Hang Seng Internet & Information Technology Index (HSIII) at the March rebalance. There are some surprises.
Estimated one-way turnover at the rebalance is 5.6% resulting in a round-trip trade of HK$3.26bn (US$416m). 6 stocks will have over 1x ADV to trade.
There is huge short interest on East Buy Holding (1797 HK) and there could be some short covering ahead of the inclusion of the stock in the index.

Citic Limited – A Deeply Discounted Conglomerate in the Hang Seng Index

By Rikki Malik

Citic Ltd (267 HK) is a well-managed conglomerate trading at a big discount to its constituent parts
Earnings should move up from here and pays a decent dividend while you wait.
A member of both the the Hang Seng Index (HSI INDEX) and the HSCCI and will attract inflows once institutional money returns

BeiGene (6160.HK/BGNE.US/688235.CH) – 2023 Results Preview and Undervaluation Concerns

Since Imbruvica’s sales continued to decline and Calquence hadn’t shown much growth in US since 23Q2, either Zanubrutinib gained more market share or the entire BTK inhibitors market is shrinking.
BeiGene’s recent sluggish share price could be related to geopolitical conflicts/weak market sentiment.However, innovative drugs don’t involve supply chain security issues. There’s no need for US to sanction China’s biotech.
We are relatively optimistic about BeiGene’s 23Q4 sales growth. In our view, BeiGene’s reasonable market value is at least about US$18 billion. BeiGene (6160 HK) is undervalued.

China Consumption Weekly (19 Feb 2024): Ant Group, Great Wall Motor, JD.com, Baidu, Autohome

By Ming Lu

Overseas traveling revenue recovered strongly in China during the Chinese New Year.
Great Wall Motor’s vehicle deliveries increased by 69% in January 2024.
JD.com plans to raise the salaries for customer service employees by 30% in 2024.

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Feb 18

Daily Brief China: HSBC Holdings, China Unicom Hong Kong, Jacobio Pharmaceuticals, Alibaba (ADR) and more

In today’s briefing:

Hang Seng Index (HSI) Rebalance: Idling at 82 Members; 100 Members in 2025 at the Earliest
HSCEI Index Rebalance: Third Time Unlucky for Zhongsheng (881 HK) As China Unicom (762 HK) In
China Healthcare Weekly (Feb16)-Innovative Drug Is “Innocent” In Geopolitics, BeiGene’s BTK, Jacobio
Alibaba Group: Revitalization of Taobao and Tmall Group

Hang Seng Index (HSI) Rebalance: Idling at 82 Members; 100 Members in 2025 at the Earliest

In a surprise, the Hang Seng index committee has decided not to make any constituent changes to the Hang Seng Index (HSI INDEX) at the March rebalance.
We now see the index reaching its 100-member target in 2025 at the earliest, though we would not be surprised to see it spill into 2026 as well.
Free float and capping changes will result in one-way turnover of 1.2% resulting in a round trip trade of HK$4.54bn. HSBC Holdings (5 HK) is the biggest sell.

HSCEI Index Rebalance: Third Time Unlucky for Zhongsheng (881 HK) As China Unicom (762 HK) In

After narrowly avoiding deletion at the last two index reviews, Zhongsheng Group will be deleted from the HSCEI INDEX in March and replaced with China Unicom (762 HK).
Zhongsheng Group (881 HK) is down 25% for the year while China Unicom Hong Kong (762 HK) is up 10%.
There appears to be positioning on both stocks though the increase in shorts and jump in cumulative excess volume on Zhongsheng Group (881 HK) point to higher positioning.

China Healthcare Weekly (Feb16)-Innovative Drug Is “Innocent” In Geopolitics, BeiGene’s BTK, Jacobio

Due to the US Draft Bill against CXOs, stock prices of the entire pharmaceutical industry plummeted. But in reality, there’s no impact on innovative drugs, which is just “emotional suppression”.
The future BTK inhibitors market pattern predicted by GlobalData is very close to our estimate. This actually indirectly verifies the peak sales level that BeiGene may reach in the future.
Setbacks on KRAS/SHP2 projects discourage investors’ confidence on Jacobio. We wouldn’t recommend projecting too high expectations on BET inhibitor just yet. Share price performance could continue to be under pressure.

Alibaba Group: Revitalization of Taobao and Tmall Group

By Baptista Research

Alibaba Group’s latest report for the December Quarter 2023 reflected steady growth despite necessary organizational adjustments.
The call highlighted an overall focus on a more aggressive approach towards competition to win growth, reigniting the growth in their two core businesses: e-commerce and cloud computing.
The healthy year-over-year Gross Merchandise Volume (GMV) growth in the e-commerce segment is attributed to the effective execution of user-first and competitive pricing strategies in Taobao and Tmall Group (TTG).

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Feb 17

Daily Brief China: Alibaba (ADR), MGM China Holdings, ZJLD Group , China Vanke , Hang Seng Index and more

In today’s briefing:

[Alibaba (BABA US, SELL, TP US$66) TP Change]: What It Takes for Us to Be More Positive on BABA?
StubWorld: Union Stikes Impact MGM; MGM China Tops Pre-Covid Numbers
ZJLD Group (6979 HK): Fundamentals Intact; Share Price Wrongfully Punished
Vanke Offloads Shanghai Mall at Discount
EQD | HSI Rally: Possible Brief Stop This Week

[Alibaba (BABA US, SELL, TP US$66) TP Change]: What It Takes for Us to Be More Positive on BABA?

By Ying Pan

BABA reported C4Q23 top line, non-GAAP operating profit and GAAP net income in-line, 3.8% and (71)% vs. our estimates.
The discrepancy between non-GAAP operating and GAAP net is due to restructuring charges;
A few clients asked what it would take to be more positive on BABA. To us, grasp of its situation and alignment of the organization must happen first…

StubWorld: Union Stikes Impact MGM; MGM China Tops Pre-Covid Numbers

By David Blennerhassett

MGM China Holdings (2282 HK)‘s FY23 top line surpasses pre-Covid levels. MGM Resorts International (MGM US) figures hit by union strike at MGM Grand Detroit.
Preceding my comments on MGM are the current setup/unwind tables for Asia-Pacific Holdcos.
These relationships trade with a minimum liquidity of US$1mn, and a % market capitalisation >20%.

ZJLD Group (6979 HK): Fundamentals Intact; Share Price Wrongfully Punished

By Steve Zhou, CFA

Many China consumer stocks, including ZJLD Group (6979 HK), have been sold off heavily in the past 6 months, primarily driven by a fear of deflation and weak consumer sentiment.
ZJLD Group is one of the exceptions, with fundamentals intact while share price heavily sold off.
Shares look attractive vs. its high growth rate and strong management team, and especially with the return of Southbound connect post holidays.

Vanke Offloads Shanghai Mall at Discount

By Caixin Global

China Vanke Co. Ltd. is selling its entire stake in a Shanghai retail complex to Link Real Estate Investment Trust (Link Reit) at a discount, as the indebted developer offloads assets to ease liquidity crunch.
Hong Kong-listed Link Reit, Asia’s largest real estate investment trust, said in a Friday filing that it agreed to acquire a 50% stake in Qibao Vanke Plaza from Vanke at 2.38 billion yuan ($334 million).
Link Reit already owns the remaining 50% stake in the plaza after a 2.77-billion-yuan purchase from Vanke’s partner GIC Pte. Ltd. in April 2021.

EQD | HSI Rally: Possible Brief Stop This Week

By Nico Rosti

The Hang Seng Index is rallying as anticipated in a previous insight, but it could stop this week and pullback a bit.
3 possible trades available: go SHORT and hold to profit from a re-start of the downtrend, go SHORT and close after 1 week, wait the pullback and go LONG.
It’s unclear at the moment if the index will go lower or rebound after the upcoming pullback.

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Feb 16

Daily Brief China: S2C Limited, CSPC Innovation Pharmaceutical-A, AECC Aviation Power, Cloudbreak Pharma, Greenland Technologies Holdi and more

In today’s briefing:

CICC-Backed Chinese Chip Design Firm Fined Over Fraudulent IPO Application
Quiddity Leaderboard ChiNext & ChiNext 50 Jun 24: US$313mn One-Way, Four Names with Double-Impacts
Quiddity Leaderboard SSE50/180 Jun 24: US$1.5bn Index Flows One-Way
Pre-IPO Cloudbreak Pharma – The Business, the Concerns and the Outlook
Greenland Technologies Holding Corp. – Another HEVI Product Win

CICC-Backed Chinese Chip Design Firm Fined Over Fraudulent IPO Application

By Caixin Global

A semiconductor company sponsored by China International Capital Corp. Ltd. (CICC), one of the country’s top investment banks, has been fined over IPO application fraud, the China Securities Regulatory Commission (CSRC) said in a statement Friday.
S2C Ltd., which specializes in electronic design automation, has been fined 4 million yuan ($563,095) for fraudulent activities in its attempt to list on Shanghai’s tech-heavy STAR Market.
The move marks the CSRC’s latest effort to enforce strict information disclosure requirements and tough penalties for market violations under its registration-based IPO mechanism.

Quiddity Leaderboard ChiNext & ChiNext 50 Jun 24: US$313mn One-Way, Four Names with Double-Impacts

The ChiNext Index represents the performance of the 100 largest and most liquid A-share stocks listed on the ChiNext Market of the Shenzhen Stock Exchange.
The ChiNext 50 index is a subset of the ChiNext Index and it consists of the top 50 names in the ChiNext index with the highest daily average turnover.
In this insight, we take a look at the names leading the race to become ADDs and DELs in the June 2024 index rebal event.

Quiddity Leaderboard SSE50/180 Jun 24: US$1.5bn Index Flows One-Way

SSE 50 and SSE 180, respectively, aim to represent the performance of the 50 and 180 largest and most liquid A-share stocks listed on the Shanghai Stock Exchange.
In this insight, we take a look at our expectations for potential index changes for SSE 50 and SSE 180 during the June 2024 index rebal event.
Since my last insight, there have been a couple of changes to our expected ADDs basket and a couple of changes to our expected DELs basket for the SSE180 index.

Pre-IPO Cloudbreak Pharma – The Business, the Concerns and the Outlook

Surgery is doctors’ first choice in many cases. Ophthalmic medical devices are also popular. Compared to the market size of ophthalmic surgeries/medical devices, market size of ophthalmic drugs is small.
Although CLOUDBREAK’s pipeline has the potential to become first-in-class/best-in-class therapies to address unmet medical needs, considering fierce competition, the real market opportunities for its drug candidates may be smaller-than-expected
In last funding round before the IPO, CLOUDBREAK was valued at US$469 million.Valuation of CLOUDBREAK should be lower than Ocumension Therapeutics. So, premium space for IPO pricing may be limited.

Greenland Technologies Holding Corp. – Another HEVI Product Win

By Water Tower Research

HEVI to be a standalone pure-play industrial EV company.
The company announced plans to spin off its drivetrain systems business into a separate, independently managed, and publicly traded company on the OTC market.
Shareholders will receive shares in the new drivetrain company (expected to be tax-free), leaving Greenland Technologies to focus on the industrial EV market through its HEVI brand.

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Feb 15

Daily Brief China: Xinjiang Tianshan Cement A, Beijing Yuanxin Technology Group Co Ltd, Octillion Energy Holdings and more

In today’s briefing:

Quiddity Leaderboard CSI 300/500 Jun 24: SHORT CSI 300 Direct DELs Vs the Index
Pre-IPO Beijing Yuanxin Technology Group (PHIP Update) – Risk of Overvaluation and Poor Profit Model
Octillion Energy Holdings Pre-IPO – Over-Reliance on Top Customer and Lack of Competitive Edge

Quiddity Leaderboard CSI 300/500 Jun 24: SHORT CSI 300 Direct DELs Vs the Index

CSI 300 represents the 300 largest stocks by market capitalization and liquidity from the entire universe of Shanghai and Shenzhen Stock Exchanges. CSI 500 represents the next largest 500 names.
In this insight, we take a look at the potential ADDs/DELs for the CSI 300 and CSI 500 rebalance in June 2024.
I currently see 11 changes for the CSI 300 index and 50 changes for the CSI 500 index.

Pre-IPO Beijing Yuanxin Technology Group (PHIP Update) – Risk of Overvaluation and Poor Profit Model

The essence of Yuanxin’s business is selling drugs.Although Yuanxin is backed by Tencent, it’s difficult to come up with more outstanding advantages to compete with Alibaba Health and JD Health.
We have doubts about Yuanxin’s core competitiveness and sustainable profitability, which are also far behind its peers. In our view, the market/investors may find it difficult to accept such stories.
Pre-IPO valuation level of Yuanxin has greatly exceeded the valuation of its drugstore business model. Yuanxin’s valuation should be lower than peers, or for example, P/S ratio of below 1x.

Octillion Energy Holdings Pre-IPO – Over-Reliance on Top Customer and Lack of Competitive Edge

By Ethan Aw

Octillion Energy Holdings (OE HK) is looking to raise US$400m in its upcoming Hong Kong IPO.
Octillion’s main revenue driver has been its EV battery systems with battery cells over the track record period, with a healthy balance sheet to support its cash burn.
However, its revenue growth fell off a cliff in 1H23 due to its heavy reliance on a single customer, which doesn’t appear sustainable, in our view.

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Feb 14

Daily Brief China: Zhejiang Taimei Medical Technology Co Ltd, I-Mab and more

In today’s briefing:

Zhejiang Taimei Medical Technology Pre-IPO Tearsheet
I-Mab to Divest Chinese Assets and Business Operations for up to $80M – An Escape by Crafty Scheme

Zhejiang Taimei Medical Technology Pre-IPO Tearsheet

By Clarence Chu

Zhejiang Taimei Medical Technology Co Ltd (1482194D CH) is looking to raise >US$100m in its upcoming Hong Kong IPO. The bookrunners on the deal are Morgan Stanley and CICC.
Zhejiang Taimei Medical Technology (ZTMT) is a digital solution provider for the life sciences R&D and commercialization sector.
As per the CIC report in the application proof, the firm was the largest digital solution provider for life sciences R&D and commercialization in China in terms of 2022 revenue.

I-Mab to Divest Chinese Assets and Business Operations for up to $80M – An Escape by Crafty Scheme

I-MAB claimed that this divesture is the best strategic choice to respond to the overall environment of China and the US. I-MAB needs to make changes to appease investors.
The real situation is not as beautiful as it seems.This divesture means I-MAB US has actually been “hollowed out”, which is a big blow to I-MAB US and its investors.
With R&D team/production base, I-MAB Hangzhou is able to tell more good stories in the future, which has completed C1 round financing and plans to IPO in A-share or HKEX.

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Feb 13

Daily Brief China: BYD , China Mobile, GDS Holdings , Zhongsheng Group, SHEIN, Shanghai Medicilon and more

In today’s briefing:

Mainland Connect NORTHBOUND Flows (To 9 Feb 2024): Decent Net Momo Buying, Especially in Financials
A/H Premium Tracker (To 9 Feb 2024): Liquid AH Premia Near Multi-Yr Wides, Narrow AH Premia Wider
Quiddity HSTECH Mar 24 Flow Expectations: US$415mn One-Way if the Low-Conviction Change Takes Place
HK Connect SOUTHBOUND Flows (To 9 Feb 2024); Net Tech Selling STILL, Net SOE Buying, STILL
Quiddity HSCEI Mar 24 Flow Expectations: Zhongsheng (881 HK) Downtrend Could Continue
Dramatic Growth of SHEIN & Temu Having Noticeable Impact On Segments Outside Of US Retail
China Healthcare Weekly (Feb.12) – New Pricing Mechanism for Drugs, China Biotech M&A, Medicilon

Mainland Connect NORTHBOUND Flows (To 9 Feb 2024): Decent Net Momo Buying, Especially in Financials

By Travis Lundy

The Quiddity Mainland Connect NORTHBOUND Monitor. Like the A/H Premium Monitor and HK Connect SOUTHBOUND Monitor. Lots of Flows/Position Tables and Charts with which to play.
Last week saw NORTHBOUND net BUY RMB 16.1bn of A-shares on VERY strong average activity after +9.9bn and +12.1bn RMB the two weeks before. Some National Team buying this week.
Renewables selling was tempered. Finance and Industry saw large net buying. Five of the top ten buys among liquid NORTHBOUND stocks were finance. Info Tech saw net selling. Again.

A/H Premium Tracker (To 9 Feb 2024): Liquid AH Premia Near Multi-Yr Wides, Narrow AH Premia Wider

By Travis Lundy

The New/Better A-H Premium Tracker has tables, charts, measures galore to track A/H premium positioning, southbound and northbound positioning/volatility in pairs over time, etc.
SOUTHBOUND and NORTHBOUND flows net positive. AH premia on average rose so Hs underperformed As by 1.75%. Narrow premia pairs saw AH premia rise most.
Watch the SOE stock price KPI space. Wouldn’t be short SOEs vs Privates on H/A basis. Low-hanging fruit with some SOEs having large cash balances.

Quiddity HSTECH Mar 24 Flow Expectations: US$415mn One-Way if the Low-Conviction Change Takes Place

The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
The index changes for HSTECH index for the March 2024 index rebal event will be announced on 16th February 2024.
In this insight, we take a final look at the expected index changes and our latest flow expectations.

HK Connect SOUTHBOUND Flows (To 9 Feb 2024); Net Tech Selling STILL, Net SOE Buying, STILL

By Travis Lundy

A bad week for HK and Chinese shares. National Team buying seems lighter into the waning days of the Year of the Rabbit.
Net SOUTHBOUND buying was HK$4.0bn in the shortened pre-holiday week.
Remarkable this past week, again, was the tendency to net sell names which were down hard, and net buy names which have been performing well.

Quiddity HSCEI Mar 24 Flow Expectations: Zhongsheng (881 HK) Downtrend Could Continue

The HSCEI serves as a benchmark to reflect the overall performance of the top 50 “Mainland China” securities listed in Hong Kong.
The index changes for HSCEI index for the March 2024 index rebal event will be announced on 16th February 2024.
In this insight, I have shown how my flow expectations have changed since I published my last HSCEI insight on 6th December 2023.

Dramatic Growth of SHEIN & Temu Having Noticeable Impact On Segments Outside Of US Retail

By Daniel Hellberg

The effects of SHEIN’s and Temu’s growth on US retail are already well known
But recent data points show the companies impacting other industries, too
Through their dramatic growth the two companies are gaining influence in US

China Healthcare Weekly (Feb.12) – New Pricing Mechanism for Drugs, China Biotech M&A, Medicilon

NHSA’s new regulation on establishing a mechanism for pricing newly listed chemical drugs and encouraging high-quality innovation attracted widespread attention. However, it’s difficult to interpret this as an optimistic rule.
Although we see increasing interest in products from Chinese pharmaceutical companies, it would be difficult for Chinese biotech to be acquired on a large scale in the foreseeable future.
Based on 2023 results, Medicilon has entered a vicious circle. Multiple sell-offs made us question the moral standards of management. The risk is high for this type of small/lower-tier CXO.

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Feb 11

Daily Brief China: Semiconductor Manufacturing International Corp (SMIC), KE Holdings and more

In today’s briefing:

China Semi Foundry: Fierce Competition & Sluggish Rebound In Year Of The Dragon
[KE Holdings (BEKE US, BUY, TP US$24) Target Price Change]: Benefiting from Structural Change

China Semi Foundry: Fierce Competition & Sluggish Rebound In Year Of The Dragon

By William Keating

Both SMIC & Hua Hong reported Q423 earnings in line with expectations and both guided Q124 flat to slightly down. SMIC expects FY24 mid single digit growth YoY.
The downturn has exposed inherent weakness in China’s Semi Foundry segment relative to peers as exemplified by the significant GM disparity
China’s two leading semi foundries have ~80% domestic dependence. Right now, that’s a headwind

[KE Holdings (BEKE US, BUY, TP US$24) Target Price Change]: Benefiting from Structural Change

By Eric Wen

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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Feb 10

Daily Brief China: Taste Gourmet, Cathay Pacific Airways and more