31Aug2023 Reports

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China consumer spend saw rebound in Aug according to China Beige Book survey, led by service sector and hospitality
Apple to launch iPhone 15 and new smartwatches on 12 of September
Salesforce shares rise 6% in after-hours trading on earnings beat, delivering growth in all five product categories

China banks

1H23 results recap: risk controllable while growth pressure

Existing mortgage rate cut: highly likely to take place while banks are still in the progress of discussing details of the plan. Expect ~9bps of NIM (net interest margin) impact on China banks with assumption of ~100bps of rate cut
Asset quality was stable while property sector remains the key point to watch
The average NPL (non-performing loan) ratio in property sector of the banks under our coverage slightly increased from 4.19% by the end of Dec 22 to 4.27% in 1H23
Do we expect further declines in NIM in 2H23?
Click here to read our views

Keppel REIT (KREIT SP)

Dividend-in-specie: The instinctive reaction may not be the right one

We see a tactical opportunity for KREIT as the timeline for Keppel Corp’s 1:5 spin-off of KREIT shares progresses
Contrary to common belief, we observe through CDL HT and CLAS being past cases, that a stock that’s the subject of distribution goes up rather than down, between the initial announcement date and completion date
Why are we cautiously optimistic that the same behaviour may pan out for KREIT?
Click here to read our views

PDD Holdings (PDD US)

Finding success in a crowded market

2Q23 adjusted profit surged 42%, well above consensus, thanks to stronger revenue growth
Expect robust revenue growth to continue in 2H23, riding on category expansion and its “everyday low-price strategy”
Revised up FY23F/FY24F adjusted earnings by 13% and 9% on stronger growth profile
Which are the three areas PDD will focus on to grow customer loyalty?
Click here to read our views

BYD Company (1211 HK/002594 CH) Expanding global footprint

Revenue and net earnings expanded 73% and 205% y-o-y in 1H23, reflecting the company’s strong sales execution and cost control, in line with expectation
Five new models for launch in 2H23 under its multi-brand strategy and intensifying overseas initiative to drive growth
Revised up FY23/24F earnings by 8%/5% to factor in higher margin contribution from its overseas business
How do we see BYD’s electric vehicle sales growing in the coming year?
Click here to read our views

Xiaomi Corp (1810 HK)

Earnings rebound to spark re-rating

2Q23 revenue declined by 4% y-o-y due to 16% y-o-y lower smartphone shipment volume
Adjusted earnings soared by 147% y-o-y, ahead of market expectations by 26%, thanks to robust margin recovery
Raised FY23/24F earnings by 18%/ 10% to factor ongoing gross margin improvement across all segments
When do we expect earnings to recover back to pre-Covid levels?
Click here to read our views