20211202-马银证券_香港_-每日港股简评_2页_140kb

Market Overview Summary

Core Content

The Hong Kong stock market experienced a technical rebound yesterday, driven by the rally in tech stocks and the China financial sector. This recovery was partly offset by the continued gains in the renewable energy sector. However, the Macau gaming sector faced selling pressure due to two key factors: a flat YoY growth in November's gross gaming revenue (GGR) at MOP6.74b, and the closure of all VIP gaming rooms by Suncity, which is expected to negatively impact VIP business in the upcoming months. The Hang Seng Index rose 183 points to 23,658, with a daily turnover of HKD139.4 billion. Analysts from ig.com predict that the Hang Seng Index will open approximately 150 points lower today, around 23,500 points.

Key Sector Insights

Hong Kong Property

• Oct Retail Sales: Total retail sales in Hong Kong reached HKD30.7 billion (+12% YoY), surpassing the historical seasonality and accelerating from September's +7.4% YoY.
• Luxury Sales: Luxury retail sales (jewelry, watches, clocks, and valuable gifts) amounted to HKD3.5 billion (+23% YoY).
• Online Sales: Online sales accounted for 8% of total retail sales in October.
• Future Outlook: Market estimates suggest that November retail sales growth may decelerate to low single digits, while 2H21 growth could remain at high single digits. The potential delay in border reopening due to new variants is expected to limit catalysts for the retail and landlord sectors in the near term.

Vitasoy (345 HK)

• China Performance: The company reported a 35% YoY decline in China in 1HFY22, attributed to fierce competition in the beverage market.
• Management Confidence: Despite the decline, management remains optimistic about recovery, citing promotional efforts and positive feedback on new products.
• Margin Forecast: Soy bean prices are expected to rise, but the company plans to manage this through production efficiency and possible price adjustments.
• Overseas Markets: Australia/New Zealand is expected to see strong growth in new products, while Singapore will scale up its local tofu business and introduce new product portfolios.

Want Want China (151 HK)

• 1HFY22 Performance: Net profit grew by 7% YoY, exceeding market expectations by about 5%, driven by strong sales (+11% YoY) and a healthy gross profit margin in the dairy beverage segment.
• Beverage Sales: Beverage sales increased by 23% YoY, with significant growth in dairy drinks across all domestic channels.
• GPM Improvement: Gross profit margin improved by 0.7pp YoY to 49.4%, due to a better channel mix and use of low-cost inventory.
• Future Plans: The company plans to raise retail ASP by a mid-single-digit percentage in January 2022. It anticipates continued pressure on GPM in 2HFY22 due to high commodity costs and new product investments, but expects to mitigate these through cost control measures.

China Edu Group (839 HK)

• Higher Education Segment: Revenue from the higher education segment grew by 58% YoY in 1H21, driven by increased enrollments, particularly in top-up degrees in Jiangxi and Guangdong.
• M&A Expectations: The market expects continued growth in this segment through M&A activities, such as the acquisition of Sichuan Jincheng.
• Secondary Vocational Education: Revenue and enrollments in the secondary vocational education segment declined by 5% and 10%, respectively, in 1H21.

EC Healthcare (2138 HK)

• Acquisition: EC Healthcare has agreed to acquire 55% of Bayley & Jackson Dental Surgeons for a total consideration of approximately HKD129 million, with HKD119 million in cash and HKD10 million via share allotment.
• Target Company: Bayley & Jackson is a well-established dental services chain operator with a long history in Hong Kong and a loyal corporate client base, including major institutions like The Hong Kong Polytechnic University, Cathay Pacific, and MTR Co.
• Strategic Implication: The acquisition aims to enhance EC Healthcare's position as a multi-specialty medical service provider and expand its dental operations. It also seeks to leverage operational efficiencies and increase market share in the premium health market.

Disclaimer

This document is for general information and market commentary only. It is not intended as investment research or a recommendation. The information is based on data from recognized sources and is not independently verified. Kim Eng (HK) does not take responsibility for any reliance on the content. Opinions expressed are subject to change without notice. The company may have financial interests in the mentioned entities and may serve as a director for them. No solicitation to buy or sell securities is intended. The document is prepared for Kim Eng (HK)'s clients and may not be reproduced or distributed without prior consent. International investments carry risks, including economic, political, and currency fluctuations, and limited information availability. It is recommended to consult a financial advisor before making investment decisions.