Analysis Report: JD-SWR target price significantly lowered! Does MEITUAN-WR still have nearly doubled potential?
Nomura pointed out that JD-SWR's third-quarter revenue was weak but in line with expectations. It is expected that JD-SWR's retail revenue in the fourth quarter will be flat compared to the same period last year. Nomura believes that JD-SWR's cheap valuation and annual dividend are worth investors' close attention.
Nomura: Maintains "Buy" rating on JD.com, target price lowered by 18% to HKD 142
If calculated at the latest closing price of HKD 108.6, this price implies a 31% upside!
The bank stated that JD.com's third-quarter revenue was weak but in line with expectations, increasing by 2% YoY to RMB 248 billion. Due to higher profit margins, its earnings increased by 7% YoY, exceeding market expectations. The profit margins of the group's three major businesses were all better than expected. The operating profit margin of JD Retail remained flat YoY at 5.2%, while the forecast was 4.8%.
The bank expects JD Retail's fourth-quarter revenue to be flat compared to the same period last year, and due to subsidies and merchant investments, its operating performance may decline by 0.7 percentage points to 2.4%. The bank also predicts that JD Retail's revenue will grow by 5% in the fiscal year 2024 (1% growth in fiscal year 2023).
The bank believes that JD's cheap valuation and annual dividend are worth investors' attention, and has raised its revenue forecast for fiscal year 2024 by 3%, while lowering its earnings forecast per share for fiscal years 2023 and 2024 by 2% each.
Citi: Gives "Buy" rating to Meituan, target price of HKD 214
If calculated at the latest closing price of HKD 109, this price implies a 96% upside!
The bank expects Meituan's third-quarter adjusted net profit under non-international financial reporting standards to increase by 51% YoY to RMB 5.3 billion, and its revenue to increase by 22% YoY to RMB 76.2 billion.
The bank pointed out that Meituan's adjusted EBITDA and adjusted net profit under non-international financial reporting standards are expected to outperform the market, benefiting from seasonal support from tourism and in-store services. The revenue from food delivery is expected to meet market expectations, but there is room for improvement in unit economics, and losses from new businesses may narrow as well, with a gross profit margin of 32.8%.
The bank expects core local business revenue and operating profit to increase by 23% and 7% YoY, respectively, to RMB 57 billion and RMB 9.97 billion.
UBS: Maintains "Neutral" rating on HKEX, target price raised by 2% to HKD 296
If calculated at the latest closing price of HKD 292.2, this price implies a 1% upside!
The bank expects the US federal funds rate and the ten-year bond yield to be lowered by up to 275 and 84 basis points, respectively, by the end of next year. It believes that the rate cuts will benefit the average daily turnover in Hong Kong but have a negative impact on net interest income. According to the bank's analysis, the average daily turnover in recent years has a significant relationship with the trend of bond yields, and other reforms have limited help in driving the average daily turnover.
The bank pointed out that the average daily turnover in Hong Kong in October was HKD 78.8 billion, a decrease of 13% MoM and 25% YoY. The average daily turnover in the fourth quarter to date is HKD 83 billion, a decrease of 31% YoY. The amount raised from IPOs in the first ten months decreased by 61% YoY, narrowing the decline from 65% in the first nine months.