CMBI Research China & Hong Kong Stock Picks (November 2023)
Zhihu Inc, Bosideng International Holdings, PDD Holdings, Yunnan Botanee Bio-Tech Group, DPC Dash, Mobvista, Huya Inc, Hutchmed, Joinn Laboratories China, RemeGen, Maxscend Microelectronics, 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 November and in this post include:
Zhihu Inc, Bilibili, Bosideng International Holdings, Meituan, Pinduoduo, Yunnan Botanee Bio-Tech Group Co, Giant Biogene Holding, DPC Dash, Baozun, iQIYI, Trip.com, Baidu, Tongcheng Travel Holdings, Kuaishou Technology, Xiaomi Corp, AK Medical, Atour Lifestyle Holdings, ZTO Express, Alibaba, NetEase, JD.com, Mobvista, XPeng, Tencent, Huya Inc, Tencent Music Entertainment Group, Xtep, Samsonite International SA, BeiGene, Hutchmed, Weibo Corp, Li Auto, FIT Hon Teng, CR Power, FriendTimes Inc, Ke Holdings, Netflix, YUM China, BYD Electronic International Co Ltd, Joinn Laboratories China, Sany Heavy Equipment International Holdings, Prada SpA, China Longyuan Power Group Corp, Haier Smart Home, RemeGen, WuXi AppTec, Inner Mongolia Yili Industrial Group Co, Maxscend Microelectronics Co & Budweiser APAC
hey 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, and October posts summarizing those) BUT these lists typically do not change too much from month to month (although there were eight Deletions for November). Stocks covered by the CMBI November list (including Additions and Deletions) and included in this post with updated stats and charts include:
Li Auto, Geely Automobile Holdings, ANTA Sports Products, Weichai Power, Zhejiang Dingli, CR Land, CR Gas, JNBY Design, JS Global Lifestyle, Vesync, CR Beer, Tsingtao Brewery, Kweichow Moutai, Innovent Biologics, China Life, Ping An, AIA Group, Tencent, Pinduoduo, Netflix, NetEase, Alibaba, Kuaishou Technology, BYD Electronic International Co Ltd, Zhongji Innolight Co Ltd, Wingtech & Kingdee International Software
Its been another tough year for China and Hong Kong stocks as the South China Morning Post has just reported:
Enduring pain: 90% of China’s equity funds suffer as market loses US$1 trillion of value (SCMP)
Only 70 of the 941 equity funds in China have delivered positive returns this year, according to financial data provider 51iFind
The CSI 300 Index is headed for a third straight year of decline, with year-to-date loss of nearly 14 per cent
The article noted that managers who were overweight on the “new energy” theme have seen some of the biggest losses. However, one fund manager was quoted as saying that quality consumer stocks, manufacturing giants with international competitive edge, and innovative tech firms still have huge potential to deliver solid earnings - meaning its worth taking a closer look at some of the stocks recently covered by CMBI.
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.
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 (November 2023)
Zhihu Inc
Zhihu Inc (NYSE: ZH) is the operator of Zhihu, a leading online content community where people come to find solutions, make decisions, seek inspiration, and have fun. Zhihu is one of the top five comprehensive online content communities and the largest Q&A-inspired online community in China, both in terms of average mobile MAUs and revenue in 2019, 2020, and 2021, according to CIC.
They have grown from a Q&A community into one of the largest comprehensive online content communities in China. On Zhihu, their users explore and enjoy content that broadens horizons, provides solutions, and resonates with minds, which they refer to as “fulfilling content” (有獲得感的內容).
The Zhihu model is centered around a virtuous cycle that seeks to achieve a content equilibrium between what their content creators contribute and what our users consume. Their users and content creators actively interact with each other and share knowledge, experience, and insights, forming a content ecosystem spanning a wide range of verticals and topics across diverse content forms.
Forward P/E: N/A / Forward Annual Dividend Yield: N/A (Yahoo! Finance)
Bilibili
Bilibili (NASDAQ: BILI) is an iconic brand and a leading video community for young generations in China. Since the mid-2010s, Bilibili began to expand to a broader audience from its original niche market that focused on animation, comics, and games (ACG), and it has become one of the major Chinese over-the-top streaming platforms serving videos on demand such as documentaries, variety shows, and other original programming.
Bilibili (BILI US) – Game business weighed on revenue growth despite resilient ad and VAS business
Forward P/E: N/A / Forward Annual Dividend Yield: N/A (Yahoo! Finance)
Bosideng International Holdings
Bosideng International Holdings (HKG: 3998 / FRA: 3BD / OTCMKTS: BSDGY / BSDGF) is a renowned operator in China with down apparel brands. Founded in 1976, the Group commenced its operations in extremely difficult conditions under the leadership of Mr. Gao Dekang.
With a focus on down apparel business, the Group has developed into an expert in down apparel which has been widely recognized by consumers and a leader in the development of the industry. Currently, the Group's down apparel brands include Bosideng, Snow Flying, Bengen, etc. These brands have been supporting the Group in meeting the needs of different groups of customers and enhancing its position as a leader in the PRC market. Among them, the down apparel business under the Bosideng brand maintained a significant lead in the industry for 27 consecutive years (1995 - 2021) in terms of sales volume in the PRC.
Currently, the Group's ladieswear brands include JESSIE, BUOU BUOU, KOREANO, KLOVA; and the school uniform brand is Sameite.
Bosideng (3998 HK) – 1H24 results beat and a resilient strategy
Forward P/E: 11.53 / Forward Annual Dividend Yield: 5.46% (Yahoo! Finance)
