LB Select
2022.08.05 18:16

LB Takeaway | Alibaba's price target cut by 8%, but still has 66% upside?

Citi maintains Alibaba-SW "Buy" rating, target price reduced 8% to HK $154 from HK $167. Credit Suisse maintains CK Hutchison Holdings Limited "outperform" rating, target price of HK $71.

Citi: Maintain Alibaba -SW "Buy" rating, target price reduced 8% to HK $154 from HK $167

Based on today's closing price of HK $92.9, this price means that there is still 66% room for growth!

The bank said that under the cost control measures, the losses of Taote, Taocai Cai, Hema and local services narrowed, and the company's revenue and non-GAAP profit for the first quarter ended June were 0.8% and 8% higher than market expectations, respectively. The management revealed that the operating conditions in July further improved month-on-month, but due to the slowdown in the recovery, it is more cautious about the second half of the year. In the future, emerging investment opportunities such as new energy, metaverse and independent technologies will be included in the development scope of core businesses such as cloud, commerce and logistics.

JPMorgan: Reaffirms Alibaba-SW "Overweight" rating, target price of HK $135

If calculated at today's closing price, this price means that there is still 45% room for growth!

The bank said its quarterly profit was better than expected, it believes cost optimization will continue to play a more important role in the coming quarters, and the stock price is expected to respond positively to these results.

According to the report, the company's cost optimization has driven up profits, and a large number of businesses such as Taobao specials, shopping for vegetables, international e-commerce, local services, and Cainiao network have narrowed quarterly losses, reflecting the group's transition to a more financially disciplined and cost-conscious direction.

The bank expects the upside in the company's share price to be driven by the market's upward revision of its earnings measurement, and when earnings return to a growth rate of more than 20% in six to 12 months, the share price driver will turn to valuation expansion.

Daiwa: Maintain Alibaba-SW "Buy" rating with HK $150 price target

If calculated at today's closing price, this price means that there is still 61% room for growth!

The bank said that Ali's core business sectors in the first fiscal quarter ended at the end of June were better than expected. Although the cloud business revenue was slightly inferior, it believed that the market underestimated the upward trend in profits. The company will strictly control costs in the next few fiscal quarters. Coupled with being underestimated by investors, the stock price is expected to benefit from the recovery of mainland consumption in the second half of the year. In addition, dual major listing permits in Hong Kong, good news from Ant Group, and repurchases will be the main stock price catalysts in the future.

Nomura: Maintains "Buy" rating of CK Hutchison Holdings Limited, with target price reduced by 6% to HK $66.7 from HK $71.2

Based on today's closing price of HK $52.2, this price means that there is still room for 28% upside!

According to the report, the company's earnings continued to recover steadily in the first half of the year, with net profit increasing by more than 4% year over year to 19.1 billion yuan, and the increase in medium-term interest rate was in line with the increase in earnings per share. The ratio of net debt to total net capital remained at a healthy level of 20.5% at the end of June, and the ratio is expected to fall further to 17.5% after the completion of the UK tower transaction in August.

The bank said that the profit growth of Changhe in the first half of the year was mainly driven by the port and energy business, which was more than enough to offset the lower profit contribution of the telecommunications and retail industries and the unfavorable foreign exchange trend. Looking ahead, the bank believes that capital allocation may be the company's development focus, looks forward to potential further share buybacks, and believes that Changhe will continue to maintain a healthy balance sheet while preparing funds for potential acquisitions when appropriate.

Credit Suisse: Maintain CK Hutchison Holdings Limited "outperform" rating, target price of HK $71

If calculated at today's closing price, this price means that there is still 36% room for growth!

The bank said that the EBIT of Changhe's port business rose by 27% in the first half of the year, mainly due to port congestion and resilient throughput, which drove higher storage revenue; Hedian Asia expanded its customer base and achieved one-time gains due to the merger with Indonesia's telecommunications business, strong performance; retail EBIT decreased by 12% year over year, but Europe saw a strong recovery; infrastructure business remained stable.

Looking ahead to the second half of the year, the bank forecasts that the company's port business will remain resilient, but storage revenue will slow. There may also be a sequential recovery in the retail business, including a gradual recovery in consumption, but this is likely to be partially offset by weak spending in Europe.

Citigroup: Maintain "Buy" rating of CK Hutchison Holdings Limited, target price of HK $84

If calculated at today's closing price, this price means that there is still 61% room for growth!

The bank expects share buybacks to be a key catalyst, arguing that current valuations are cheap. Despite headwinds such as global trade disruptions and fierce market competition, the company's overall profit for the period still rose by nearly 5%, mainly from higher oil prices, port revenue and incremental revenue from the restructuring of Indonesia's telecom business.

According to the report, the company's management expects the UK tower asset transaction to be completed in August this year, bringing sales proceeds of 3.7 billion euros, and revealed that it will continue to look for investment opportunities in the future, including telecommunications market integration opportunities to increase revenue and cash flow, opening retail stores with a fast payback period, as well as new investments in Cheung Kong Infrastructure Group, some of the proceeds will be used to reduce net debt ratios and share repurchases.

Morgan Stanley: Maintain WuXi AppTec's "overweight" rating, cut target price by 13% to HK $155 from HK $178

If calculated at today's closing price of HK $95.7, this price means that there is still 62% room for growth!

The bank expects that the company's chemical business will continue to maintain its growth momentum in the second half of the year under the relaxation of epidemic-related control measures, while the testing and biological business will rebound substantially.

The bank continued that WuXi AppTec is expected to benefit from a strong wave of CDMO investment: continued pharmaceutical innovation and venture capital drive R & D outsourcing activities, enabling WuXi AppTec to be a market leader in different business areas along the R & D value chain. The integrated end-to-end CRDMO/CTDMO model drives customer and project conversion, enhances customer stickiness, and improves efficiency and productivity. At the same time, industry-leading technical capabilities and global layout ensure that the number of projects continues to grow. The bank is optimistic about the company's clinical and commercial strength, as well as solid growth prospects supported by continued growth in business scale.

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