CMBI Research China & Hong Kong Stock Picks (July & August 2024)
Nongfu Spring, ANTA Sports, Ping An, Jiumaojiu, Tuhu Car, China Tower Corp, AIA Group, Bilibili, Xiaomi, Will Semiconductor, Samsonite, New Oriental Education, Chow Tai Fook Jewelry, etc.
CMB International Capital Corporation is a wholly owned subsidiary of China Merchants Bank (SHA: 600036 / HKG: 3968 / OTCMKTS: CIHKY / OTCMKTS: CIHHF) - one of the largest banking groups and the largest privately-owned bank in China. They come out with (and post on their website) a steady stream of free research pieces - namely China and Hong Kong stock picks (see our front page for a full list of TAGS for our EM Stock Pick Tear Sheets).
Stocks covered during the month of August and in this post include:
Akeso, PICC Property and Casualty Co Ltd, DPC Dash, Baozun, BYD Electronic International Co Ltd, AK Medical, Innovent Biologics, Sany Heavy Equipment International Holdings, Hangzhou Tigermed Consulting, Tongda Group Holdings Ltd, Great Wall Motor, BYD Company, Li Auto, Nongfu Spring, Proya Cosmetics, Hansoh Pharmaceutical Group Company, Intron Technology, Shengyi Tech, Shennan Circuits, Meituan, Greentown Management Holdings Company, NAURA Technology Group, ANTA Sports Products, Zhejiang Dingli Machinery, SenseTime, Jiangsu Hengli Hydraulic, Trip.com, TK Group Holdings, Ping An, Jiumaojiu International Holdings, Greentown Service Group Co, Pinduoduo, China Tower Corp Ltd, AIA Group, iQIYI, Tuhu Car, Cloud Music, Weibo Corp, 3SBio Inc, Zhongji Innolight Co Ltd, Luxshare Precision Industry, Poly Property Services Co Ltd, Yonyou Network Technology Co Ltd, BOE Varitronix, WuXi Biologics, Aac Technologies Holdings, Onewo Inc, CSPC Pharmaceutical, Baidu, Minth Group, NetEase, Bilibili, Xiaomi Corp, Geely Automobile Holdings, Will Semiconductor, Sunny Optical, ZTO Express, Xtep, Sichuan Kelun-Biotech Biopharmaceutical, J&T Global Express Ltd, Giant Biogene Holding, XPeng, Tongcheng Travel Holdings, Kuaishou Technology, CR Beer, Yancoal Australia, RemeGen, Li Ning, Kingdee International Software Group, ZTE, China Hongqiao Group, BaTeLab Co Ltd, Samsonite International SA, GoerTek, Alibaba, JD.com, Tencent, China Lilang Ltd, FIT Hon Teng, Tencent Music Entertainment Group, Q Technology (Group) Company, 361 Degrees International Limited, Ke Holdings, Jiangxi Rimag Group Co Ltd, Hua Hong Semiconductor, BeiGene, Horizon Construction Development, Yum China, Yuexiu Transport Infrastructure, Tongda Group Holdings Ltd, ImmuneOnco Biopharmaceuticals (Shanghai), Hutchmed & New Oriental Education
Stocks covered during the month of July (but not covered again in August) and in this post include:
WuXi AppTec, Chow Tai Fook Jewelry Group, QuantumPharm & China MeiDong Auto Holdings
They also come out with (and post on their website) a monthly list of 20+ high conviction stock ideas - namely Chinese stock picks (see our May, June, July, August, September, October, November, December, January-February, March, April, May & June posts summarizing those) BUT these lists do not change too much from month to month. Stocks covered by the CMBI August list (including July Additions and Deletions [Haier Smart Home] plus August Additions and Deletions) and included in this post with updated stats and charts include:
Li Auto, Geely Automobile Holdings, Zoomlion Heavy Industry, Zhejiang Dingli Machinery, Bosideng International Holdings, JNBY Design, Xtep, Vesync, Kweichow Moutai, BeiGene, Shenzhen Mindray Bio-Medical Electronics, China Pacific Insurance (Group), PICC Property and Casualty Co Ltd, Tencent, Alibaba, Pinduoduo, Amazon.com, CR Land, FIT Hon Teng (Foxconn Interconnect Technology), Xiaomi Corp, BYD Electronic International Co Ltd, Zhongji Innolight Co Ltd, NAURA Technology Group & Kingdee International Software Group
As a reminder, there is a full index for Chinese stocks covered in these and other stock pick posts:
On a different note, the (Soros funded…) Institute for New Economic Thinking has this seven part series about China’s rise that I have not gotten a chance to watch or listen to, but the byline is intriguing:
How can we understand the bright and dark sides of China’s gilded rise? Through the lens of American history.
In this seven-episode series, Yuen Yuen Ang explains how China escaped poverty and became the second largest economy in the world. Rejecting popular assumptions of Chinese exceptionalism, she shows that China’s path to a mixture of wealth and capitalist excesses is more like the American experience than most people think.
In addition and after each short video (or class), there are summaries with links to further resources:
Getting back to CMBI’s research: Note that when I click on CMBI’s website, I receive NO pop-up asking what sort of investor I am or my location; but there is this disclaimer at the end of each research report that readers need to be aware of:
This post will NOT be quoting directly from the research documents themselves (beyond giving the title to the linked research report - please keep the above disclosures in mind).
To make your life easier, this post includes:
A heading with the stock name.
A quick description of the stock pick with links to the IR page and stock quote(s) on Yahoo! Finance.
A link to any Wikipedia page (for what it might be worth…)
The title of the report linked to the file page on the CMBI website about the stock pick.
A price/book (most recent quarter) ratio plus forward or trailing P/E and dividend yields linked back to the Yahoo! Finance statistics page.
The latest long term technical chart linked back to Yahoo! Finance.
And as always, this post is provided for informational purposes only (and to make your life easier…). It does not constitute investment advice and/or a recommendation…
CMBI Research (August 2024)
Akeso
Akeso (HKG: 9926 / FRA: 4RY / OTCMKTS: AKESF) established in 2012, is a biopharmaceutical company dedicated to the research, development, manufacturing and commercialization of new innovative antibody drugs that are affordable to patients worldwide.
The company has created a unique integrated R&D innovation system with the comprehensive end-to-end drug development platform (ACE Platform) and bi-specific antibody drug development technology (Tetrabody) as the core, a GMP-compliant manufacturing system and a commercialization system with an advanced operation model.
With fully integrated multi-functional platform, Akeso is internally working on a robust pipeline of over 30 innovative assets in the fields of cancer, autoimmune disease, inflammation, metabolic disease, and other major therapeutic areas. Akeso has successfully promoted the commercialization of three innovative biological drugs (one out-licensed drug), 19 assets have entered clinical stage, with 13 clinical trials under pivotal/phase III trial. In June 2022, 开坦尼® (PD-1/CTLA-4 bi-specific antibody, Cadonilimab injection) was approved by the NMPA and became the first tumor dual immune checkpoint inhibitor bi-specific antibody approved for marketing globally. Another Akeso internally discovered and developed oncology product,安尼可® (PD-1 monoclonal antibody, Penpulimab injection) , was granted marketing approval in China in August 2021. In December 2022, the Company out-licensed breakthrough bispecific antibody, ivonescimab (PD-1/VEGF bi-specific antibody, AK112), with up to US$5 Billion total potential deal value to Summit Therapeutics for development and commercialization in the U.S., Canada, Europe, and Japan.
Akeso (9926 HK) - Eyes on the detailed head-to-head data of AK112 at WCLC in Sep
Price/Book (Most Recent Quarter): 9.35
Trailing P/E: 20.93 (no forward P/E) / Forward Annual Dividend Yield: N/A (Yahoo! Finance)
PICC Property and Casualty Co Ltd
PICC Property and Casualty Co Ltd (HKG: 2328) is the largest non-life insurance company in mainland China incorporated in 2003. It was one of the three main subsidiaries of the People's Insurance Company of China. PICC P&C is principally engaged in the provision of property and casualty insurance products. It operates its insurance business through motor vehicle, commercial property, cargo, liability, accidental injury and health, agriculture, homeowners and credit.
Price/Book (Most Recent Quarter): 0.87
Forward P/E: 6.65 / Forward Annual Dividend Yield: 5.14% (Yahoo! Finance)
DPC Dash
DPC Dash (HKG: 1405 / FRA: X12 / OTCMKTS: DPCDF) is Domino's Pizza's exclusive master franchisee in the China mainland, the Hong Kong Special Administrative Region of China, and the Macau Special Administrative Region of China. Their global franchisor, Domino's Pizza, Inc. (NYSE: DPZ), is the world’s largest pizza company in terms of global retail sales.
They have adapted and built upon the Domino's business model by localizing its key features for China and its consumers, and focused on serving handcrafted, quality pizza at a competitive price, with easy ordering access and efficient delivery, enhanced by technological innovations.
DPC Dash (1405 HK) - Prudence guidance with solid fundamentals
DPC Dash (1405 HK) - Outlook stays healthy after positive profit alert
Price/Book (Most Recent Quarter): 3.78
Forward P/E: 42.92 / Forward Annual Dividend Yield: N/A (Yahoo! Finance)
