Comprehensive Analysis of Key Companies – Market Insights

By UOB Kay Hian

Tuesday, 05 November 2024

In this detailed market analysis, we delve into the recent performances and future outlooks of several key companies, providing comprehensive insights into their strategic moves, financial health, and market trends. This report covers PropNex, Yangzijiang Financial Holding, Thai Beverage, Hong Kong Developers and Landlords, and Xiaomi Corp, among others. Our aim is to provide you with a thorough understanding of these companies and their market dynamics.

PropNex (PROP SP)

Solid Outlook for the Next 12-18 Months

PropNex’s outlook for the next 12-18 months appears solid, with stable to higher transaction volumes in both private and HDB markets. The number of new launch units is expected to increase significantly based on property developers’ timelines. Recent US Fed rate cuts have positively impacted property transaction volumes, enhancing market sentiment.

By the end of 2024, over 4,600 new units are expected to be launched, compared to just under 2,000 units in the first half of the year. PropNex continues to achieve 60-70% market share in new launches, with notable projects including The Landmark, Hillock Green, The Botany, Hillhaven, and Pinetree Hill.

The company offers a defensive yield of 6.4% for 2024. PropNex’s HDB segment has shown slightly stronger expectations, with resale volumes projected to increase to 29,000-30,000 units from 26,735 in 2023.

Key Financials

• Net turnover for 2024: S\$845 million
• EBITDA: S\$56 million
• Operating profit: S\$52 million
• Net profit (adjusted): S\$48 million
• EPS: 6.5 S\$ cent
• PE: 12.6x
• Dividend yield: 7.4%
• Net margin: 5.7%
• Net cash position: S\$116 million

We maintain our BUY rating on PropNex with a target price of S\$0.98, forecasting a stable performance in 2024 and a significant uptick in 2025 driven by new projects and higher transaction volumes.

Yangzijiang Financial Holding (YZJFH SP)

Trading Buy Recommendation

Yangzijiang Financial Holding is currently trading above the cloud, indicating an intact uptrend. The conversion and base lines remain in a bullish crossover, supported by a bullish MACD. We project the stock price to test S\$0.445 with stops at S\$0.38. This trade idea is viable if the stock hits the entry price range within three trading days.

Thai Beverage (THBEV SP)

Trading Sell Recommendation

Thai Beverage’s price appears to have formed a top at S\$0.545, with the MACD showing a bearish divergence warning. We expect the stock price to break below the cloud and move lower, targeting S\$0.475 with stops at S\$0.54. This trade idea is valid if the stock hits the entry price range within three trading days.

Hong Kong Developers and Landlords

Strong Sales Rebound in October 2024

Hong Kong’s primary property market showed signs of recovery in October 2024, with notable increases in transaction volumes. Although November may see a pullback due to lower high-quality new supply, we still expect a 3% recovery in property prices in 4Q24-1Q25, driven by rising rental yields and supportive macro factors.

Challenges from Greater Bay Area (GBA) Integration

Retail landlords continue to face challenges from GBA integration, with a notable increase in Hong Kong residents traveling to mainland China and vice versa. The net outflow of tourists expanded significantly in 10M24, which may impact Hong Kong’s retail sales negatively.

Key Insights

• CCL index increased by 0.7% in October 2024
• Primary transactions volume saw a strong recovery with 2,990 units sold in October
• Hong Kong’s property market is on a recovery trend supported by high rental yield, potential rate cuts, and supportive macro policies

Top Picks

We maintain a MARKET WEIGHT on Hong Kong developers and landlords, with a preference for developers over landlords. Our top picks are SHKP and LINK REIT.

Xiaomi Corp (1810 HK)

3Q24 Results Preview: Share Gains and Premiumisation Drive

Xiaomi is set to report its 3Q24 earnings later this month, with adjusted net profit expected to reach Rmb6.0 billion, 7% above Bloomberg consensus estimates. The earnings beat is primarily driven by strong sales and profitability in the IoT products segment.

Smartphone Segment

Xiaomi’s smartphone shipments grew 12.8% yoy in 3Q24, with revenue expected to be Rmb47.1 billion. Margins are expected to moderate slightly but remain stable.

IoT Segment

The IoT segment is expected to generate Rmb25.2 billion in revenue, with a margin expansion to 21.0%, driven by better product mix and growth in overseas markets.

Internet Services and EV Business

Internet services revenue is expected to rise 7.2% yoy to Rmb8.3 billion, while the EV business is on track with SU7 deliveries, generating Rmb8.2 billion in revenue for 3Q24.

Key Financials

• Net turnover for 2024: Rmb341.884 billion
• EBITDA: Rmb27.195 billion
• Operating profit: Rmb23.069 billion
• Net profit (adjusted): Rmb21.880 billion
• EPS: 87.9 Fen
• PE: 28.2x
• Net margin: 6.0%
• Net cash position: Rmb116 million

We maintain our BUY rating on Xiaomi with a target price of HK\$31.70, driven by strong performance in the IoT segment and solid market share gains in smartphones.

Conclusion

This comprehensive analysis provides a detailed look into the performance and future outlook of key companies such as PropNex, Yangzijiang Financial Holding, Thai Beverage, Hong Kong Developers and Landlords, and Xiaomi Corp. By understanding the strategic moves and market dynamics of these companies, investors can make informed decisions in the ever-evolving financial landscape.