CMBI Research China & Hong Kong Stock Picks (September 2023)
Shennan Circuits, Shengyi Technology, Luxshare Precision Industry, Trip.com, Will Semiconductor, Joinn Laboratories China, Haier Smart Home, Akeso, China Mengniu Dairy Company, Haidilao, 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 September and in this post include:
Prada SpA, Ke Holdings, JS Global Lifestyle, Shennan Circuits, Shengyi Technology, CR Gas, ENN Energy Holdings, YUM China, Luxshare Precision Industry, JNBY Design, EVA Precision Industrial Holdings, Tongda Group Holdings Ltd, Will Semiconductor, China Three Gorges Renewables Group Co Ltd (CTGR Group), Trip.com, Ping An, Joinn Laboratories China, Haier Smart Home, Akeso, China MeiDong Auto Holdings, Yunkang Group, China Mengniu Dairy Company, BYD Electronic International Co Ltd, TK Group Holdings, Haidilao International Holding, Nayuki Holdings, China Resources Mixc Lifestyle Services & Sany Heavy Equipment International 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 previous posts summarizing those under out China tag) BUT these lists do not change too much from month to month. Stocks covered by the CMBI September list (including Additions and Deletions) and included in this post with updated stats and charts include:
Li Auto, Geely Automobile Holdings, Sany Heavy Equipment International Holdings, Zhejiang Dingli Machinery, CR Power, JNBY Design Vesync, CR Beer, Tsingtao Brewery, Kweichow Moutai, China Tourism Group Duty Free (CTGDF), Innovent Biologics, China Life InsuranceChina Life Insurance, Ping An, AIA Group, Tencent, Pinduoduo, NetEase, Alibaba, Kuaishou Technology, CR Land, BYD Electronic International Co Ltd, Wingtech & Kingdee International Software
First, some interesting recent Twitter Threads or articles worth reading about China:
How economists have underestimated Chinese consumption (The Economist) (Archived)
The surprising relevance of state-subsidised spicy cucumber
China proposes stock stabilisation fund to lift economic confidence (FT) (Archived)
Four people familiar with the matter have said Beijing is considering the plan, which would probably invest in domestic equities through existing financial institutions and professionally managed funds, according to one of the people. The government money would be matched by its partner funds and institutions, the person added.
China bars brokers from opening offshore trading accounts (FT) (Archived)
A state-backed fund also increased its shareholding in China’s four biggest banks
Getting back to CMBI stock picks, 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 (September 2023)
Prada SpA
Prada SpA (HKG: 1913 / FRA: PRP / PRP0 / OTCMKTS: PRDSY / PRDSF) designs, produces, and distributes leather goods, handbags, footwear, apparel, accessories, and jewelry in Europe, the Americas, the Asia Pacific, Japan, the Middle East, and internationally. The company offers its products under the Prada, Miu Miu, Church's, and Car Shoe brands. It also operates in eyewear and fragrances sector under licensing agreements; food sector under the Marchesi 1824 brand; and sailing races business under Luna Rossa brand name. In addition, the company engages in the real estate business. It sells its products through a network of owned and franchise operated stores; department stores; independent retailers; e-commerce channels; and e-tailers.
Prada SpA (1913 HK) – 3Q preview: Embracing a normalised quarter
Forward P/E: 18.98 / Forward Annual Dividend Yield: 2.10% (Yahoo! Finance)
Ke Holdings
KE Holdings (NYSE: BEKE) is a leading integrated online and offline platform for housing transactions and services - ranging from existing and new home sales, home rentals, to home renovation and furnishing, and other services. The Company owns and operates Lianjia, China’s leading real estate brokerage brand and an integral part of its Beike platform.
Would-be investors might want to check out this video (CHINA PROPERTY FRAUD - KE HOLDINGS ACCUSED OF FRAUD AFTER $22BN NEW YORK IPO. Another Luckin Coffee?) along with the Muddy Waters report (MW is Short KE Holdings Inc. (BEKE US)) and the stock’s SEC filing responding to it (KE Holdings Refutes the Muddy Waters' Report).
Wikipedia (Chinese)
Ke Holdings (BEKE US) – Short-term headwind, but bottoming out is in sight
Forward P/E: 16.08 / Forward Annual Dividend Yield: N/A (Yahoo! Finance)
JS Global Lifestyle
JS Global Lifestyle (HKG: 1691 / FRA: 3JS / OTCMKTS: JGLCF) is a provider of high-end innovative small home appliances. Three of their flagship brands, Shark, Ninja, and Joyoung, are deeply rooted in the United States and China, with increasing presence in Europe, Japan, Australia and other markets at the same time.
On December 18, 2019, JS Global Lifestyle was listed on the Main Board of the Hong Kong Stock Exchange, and in February of the following year, included as a constituent stock of the Hang Seng Composite Index.
JS Global Lifestyle (1691 HK) – Distressed valuation and potential turnaround
Forward P/E: 1.59 / Forward Annual Dividend Yield: 3.32% (Yahoo! Finance)
