Source: Broker China
Foreign investors sing many leading Chinese companies!
On the evening of March 27, it was announced that the international rating agency Moody's will be the Chinese internet giant$MEITUAN-W (03690.HK)$The credit outlook was raised to “positive” and confirmed the company's Baa3 rating. On the same day, well-known investment banks such as J.P. Morgan, Morgan Stanley, and Nomura upgraded Chinese sportswear giants$ANTA SPORTS (02020.HK)$The target price.
Additionally, Morgan Stanley analyst Adam Jonas said that the cooperation between Tesla and Chinese battery manufacturer Ningde Era could change the rules of the game and inject momentum into the development of the US electric vehicle market. The analyst pointed to recent reports that Ningde Times is collaborating with Tesla to develop fast charging batteries and supply machinery to its Nevada plant.
Adam Jonas pointed out that the US electric vehicle market has not been fully penetrated, and China's electric vehicle penetration rate is very high, and the US needs electric vehicle technology cooperation with China to promote a higher electric vehicle penetration rate.
Moody's raises Meituan's credit outlook
Moody's, an internationally renowned rating agency, released a report on the 27th, upgrading the credit outlook of Chinese internet company Meituan from “stable” to “positive” and reaffirming its Baa3 issuer rating and priority unsecured note rating.
Ying Wang, vice president and senior analyst at Moody's, said that the positive outlook reflects Meituan's faster deleveraging trend than expected and the rising market position of its core takeout, in-store, hotel and travel services businesses. It is expected that the company will enhance profit performance and improve credit conditions by maintaining steady and strong core business performance and further reducing losses from new business operations.
Moody's predicts that Meituan's adjusted EBITDA margin will gradually increase to 10% over the next 12 to 18 months, while annual revenue growth will slow to 10% to 15% over the next two to three years.
Recently, well-known investment banks such as J.P. Morgan Chase, Morgan Stanley, and Macquarie have all raised Meituan's target prices. Macquarie believes that Meituan's core local commercial business still shows flexibility in growth. Although the competitive environment still exists, Meituan has successfully stabilized its market position and continuously expanded its user and merchant base. This will help the company achieve more stable development in the future.
Macquarie raised Meituan's adjusted EBITDA forecasts for 2024 and 2025 by 18% and 20%, respectively, to reflect the company's profit recovery. Macquarie raised Meituan's target price by 11% to HK$118 and reaffirmed its “outperforming the market” rating.
J.P. Morgan notes that Meituan's stock price has increased by about 41% since February because investors expect losses in the community group buying business to narrow drastically. The bank believes that Meituan's stock price will still have room to rise further, as management comments on the performance conference call showed full confidence in the profit growth prospects of core local businesses this year.
Driven by improved financial visibility and market adjustments to its forecasts, the bank's revaluation is expected to drive Meituan's stock price to continue to rise. J.P. Morgan upgraded Meituan's rating from “neutral” to “increased holdings”, and the target price was raised sharply from HK$67 to HK$110. The adjusted earnings per share estimates from 2024 to 2025 were 55% and 45% year-on-year increases, respectively, 21% and 18% higher than market expectations.
Morgan Stanley said that Meituan's performance last quarter was better than expected, and the stock price has largely reflected favorable factors. Meituan promised to drastically reduce losses this year, responding to investors' biggest concerns, but we still need to pay attention to transaction growth and competitive prospects. The bank expects Meituan's first-quarter and full-year revenue to be 70 billion yuan and 323 billion yuan respectively, up 20% and 17% year on year, respectively. The corresponding adjusted operating profit is 5.5 billion yuan and 33.5 billion yuan respectively, up 24% and 81% year-on-year. Morgan Stanley rated Meituan “in sync with the market”, and the target price was raised from HK$85 to HK$100.
Previously, after the Hong Kong stock market closed on the afternoon of March 22, Meituan disclosed the results for the fourth quarter and full year of 2023. In the fourth quarter of 2023, the company achieved revenue of 73.696 billion yuan, an increase of 22.6% year on year; adjusted net profit reached 4.375 billion yuan, an increase of 427.6% year on year. For the whole of 2023, the company achieved revenue of 276.745 billion yuan, an increase of 25.8% over the previous year, and adjusted net profit of 23.253 billion yuan, compared to 2.83 billion yuan for the full year of the previous year.
“It is expected that all new businesses, excluding Meituan Premium, will overall reach balance in 2024.” Wang Xing said that in the past year, a large amount of resources has been invested in Meituan Preferred Selection, but the results have not met expectations. This year, Meituan Premium will make strategic adjustments and optimize its business model. It is committed to drastically reducing operating losses, focusing more on building key capabilities and improving experience, rather than focusing on expanding scale or competing for market share. It plans to increase the price bonus ratio and reduce subsidies to Meituan Preferred in the future.
Anta Sports has also been sung a lot
On March 26, Anta Sports (“Anta” for short) revealed the results for the full year of 2023. Financial reports show that in 2023, Anta's revenue was 62.356 billion yuan, a year-on-year increase of 16.2%, reaching another record high. In 2023, Anta's overall gross margin increased 2.4 percentage points to 62.6%, operating profit margin increased 3.7 percentage points year over year to 24.6%; profit attributable to shareholders increased 34.9% year over year to 10.2 billion yuan.
Specifically: 1) The revenue of the Anta brand was 30.31 billion yuan, up 9.3% year over year, mainly due to the narrowing of Anta retail discounts and the increase in DTC's direct sales ratio. 2) FILA brand revenue was 25.1 billion yuan, up 16.6% year on year. Revenue contributions are mainly due to significant increases in FILA brand store efficiency and floor efficiency. 3) The revenue of other brands was 6.95 billion yuan, an increase of 57.7% over the previous year, mainly due to the sharp increase in revenue contributions of Descente and Cologne.
According to Anta's management guidelines, in 2024, Anta and FILA are expected to grow by 10% to 15%, while Descente and Cologne are expected to grow by no less than 20% and 30% respectively.
After the financial report was released, international investment banks such as J.P. Morgan Chase, Morgan Stanley, and Nomura all raised Anta's target price. According to J.P. Morgan Chase, Anta's profit last year exceeded the bank's expectations, and sales growth, gross margin, and operating margin performance were all in line with expectations. The Group's Anta brand and FILA guidelines both maintained 10% to 15% retail sales growth this year, easing some investors' concerns about lowering their guidelines. J.P. Morgan maintains Anta's “gain” rating. It is estimated that the company's sales and profit are expected to increase by 13% and 17% year on year, respectively, and the target price will be raised from HK$140 to HK$144.
According to the Morgan Stanley report, Anta is one of the few large sportswear brands in the world whose performance has exceeded expectations and increased over the past 6 to 12 months, mainly benefiting from the rapid growth of the Chinese market and the strong performance of niche/high-end brands. The company's good inventory/discount situation means the forecast may be raised by the end of this year. Morgan Stanley raised Anta's target price from HK$111 to HK$117, maintaining an “increase” rating.
According to the latest report released by Nomura, the annual performance of Chinese sporting goods manufacturer Anta has exceeded expectations. Nomura said that Anta is hopeful this year and is expected to meet this year's revenue guidelines. As a result, Nomura maintained Anta's “buy” rating and raised its target price from HK$123.1 to HK$125.1.
As of the close of Hong Kong stocks on March 27, Anta's stock price was HK$82 per share, with the latest market value of HK$232.3 billion.
editor/tolk