Hong Kong Retail Research Report

Broker: CGS International

Date: November 8, 2024

Market Overview

In a remarkable show of strength across multiple asset classes, stocks, bonds, and commodities surged to fresh all-time highs. The S&P 500 is on the verge of breaking the 6,000 mark, marking its 49th record high this year. This positive momentum comes after Federal Reserve Chairman Jerome Powell highlighted the robust state of the U.S. economy while withholding any clear indication of future rate cuts. Treasury yields declined across the curve, and the U.S. dollar experienced its most significant drop since August.

Haidilao International Holding Ltd (6862) – Bullish Uptrend to Continue

Technical Buy

Haidilao International Holding Ltd., known for its hot pot cuisine, is showing promising signs of a continued bullish uptrend. The stock is forming a potential larger double bottom, indicating a bullish reversal pattern. A strong rebound at the HK\$15.10 support level was followed by a bullish engulfing candle, suggesting further upward movement. Key technical indicators, including the MACD histogram and Stochastic Oscillator, support this positive outlook.

• Entry Prices: 17.92, 16.30, 13.78
• Support Levels: 15.10, 13.26
• Stop Loss: 10.90
• Resistance Levels: 19.36, 22.55
• Target Prices: 19.81, 21.90, 27.00, 38.45

Genting Singapore – VIPs Failed to Show Up

Genting Singapore’s 9M24 adjusted EBITDA of S\$734.7 million missed expectations, reaching only 64.3% of our FY24F estimates. The 3Q24 adjusted EBITDA saw a significant decline of 52.5% year-on-year to S\$163.9 million, attributed to weaker gaming revenue. The company’s shortfall is primarily due to a decrease in VIP rolling volume and win rates. Consequently, we have reduced our FY24F-26F adjusted EBITDA estimates by 6.7-18.4%. Despite this, we reiterate our ‘Add’ recommendation with a lower target price of S\$1.05.

DBS Group – Focus on Capital Management

Details on the financial performance and strategic initiatives of DBS Group were not extensively covered in the report. However, the focus remains on capital management to sustain and enhance shareholder value.

Foshan Haitian Flavouring – Good Recovery Trend Continuing

Foshan Haitian Flavouring is witnessing a robust recovery trend in the fourth quarter of 2024. The company has managed to rebound from previous setbacks and is on a positive trajectory. Specific financial details and forecasts were not provided, but the overall outlook remains optimistic.

PTT Oil and Retail Business – Plunged into the Red

PTT Oil and Retail Business reported a significant downturn, plunging into the red due to substantial stock losses. The financial health of the company has been adversely affected, and the outlook remains challenging. Detailed financial figures and future projections were not included in the report.

Market Performance Recap

The S&P 500 rose by 0.7%, while the Nasdaq 100 climbed 1.5%. The Dow Jones Industrial Average remained relatively unchanged. Notable movements included a 2.3% increase in the ‘Magnificent Seven’ megacaps and a 23% jump for Lyft Inc. following a bullish outlook. Conversely, the banking sector faced a 2.7% drop, with JPMorgan Chase & Co. experiencing a 4.3% decline after an analyst downgrade.

Conclusion

The Hong Kong retail market shows a mix of bullish trends and challenges across different sectors. Haidilao International Holding Ltd. and Foshan Haitian Flavouring are on positive trajectories, while Genting Singapore and PTT Oil and Retail Business face hurdles. Investors should stay informed and consider these insights when making investment decisions.