KGI DAILY MARKET MOVERS – 1 July 2021

IPO Performance Review: DiDi Global | Market Movers | Trading Dashboard

IPO Performance Review

DiDi Global (DIDI US): Here comes the 4th ride-hailing giant

DiDi opened at US$16.65 and traded as high as US$18 before settling back to US$14.14 for a 1% gain on its first day of trading.
At around US$68bn market cap and close to 13x EV/TTM Platform Sales, DiDi maintains its valuation premium to Uber and Lyft. The US$14.14 closing price indicates potential affirmation that DiDi is fairly priced at this point.
DiDi’s upside catalysts would come from improving profitability margins or an overall sentiment shift for Chinese Big Tech.
Read our previous write-up here.

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Market Movers

United States

AMD (AMD US) cleared the US$90 mark after Wells Fargo and Bank of America reiterated their Buy calls. Wells Fargo cited Intel’s production delays to be a continued tailwind for AMD, while Bank of America cites an over-emphasis of competitive risks by AMD bears, and believes AMD has catch-up potential to the S&P 500 and the rest of the semiconductor stocks.
Walmart (WMT US) closed above US$140 after announcing two major partnerships on Tuesday evening. Walmart announced a multi-year partnership with Ibotta to introduce more savings through digital offer programs. Additionally, Walmart will be partnering with Kraft Heinz and eko to produce 11 episodes about cooking, featuring Kraft Heinz products on Walmart Cookshop, an online video hub for enthusiastic cooks.
General Electric (GE US) had an outsized move with no particular news on the day. Goldman Sachs reiterated their Buy rating on the company’s shares earlier in the week with a US$16 price target. Goldman Sachs cited the potential increment of industrial Free Cash Flow, and expects FCF margin increment to drive GE’s share price upwards. GE is also expected to benefit from the recent aircraft orders by United Airlines, as the company makes engines for both Boeing and Airbus.
Bed, Bath and Beyond (BBBY US) spiked 11% after reporting Fiscal 1Q results before market open on Wednesday. Sales are up 86% year-on-year against a weak pandemic quarter, and are up 3% when comparing against Fiscal 1Q 2019.BBBY also raised sales estimates for the remaining fiscal quarters, with a US$8.2-8.4bn full year guidance vs US$8-8.4bn prior guidance and US$8.16bn from consensus.
Meanwhile Marin Software (MRIN US) saw substantial losses after climbing as high as US$18.82 on Tuesday. Marin is one of Reddit’s new favourites, and is still up over 500% as compared to its pre-rally price around the US$2 mark.

Singapore

Japan Foods (JFOOD SP) Shares rose 5% yesterday on higher-than-average trading volume. We upgraded Japan Foods to OUTPERFORM and raised our TP to S$0.65 as the group takes advantage of the current environment to expand into pizza and halal-certified restaurants. Read our report here.
DBS (DBS SP) led the local banks higher to gain 2% on Wednesday after MAS said that it is conducting additional stress tests to assess whether it is necessary to extend the current dividend caps on local banks. Singapore banks’ total dividends are currently capped at 60% of FY2019’s dividends per share. There is a growing consensus among street analysts that limits will likely be lifted soon given the banks’ strong capital levels and earnings. There are 15 BUYS / 6 HOLDS / 0 SELLS and a 12m TP of S$32.65. DBS offers a forecasted dividend yield of 3.9%, 4.5%, and 4.9% for 2021, 2022, and 2023, respectively.
iFAST Corp (IFAST SP) shares rose ahead of the announcement that it has led a consortium in the submission of an application for a digital bank license to Bank Negara Malaysia. iFAST will own a 40% stake in the digital bank if the application is successful.
UMS Holdings (UMSH SP) led the gainers amongst local tech stocks after UOB reiterated its BUY rating while raising the 12m TP to S$1.92 from S$1.47 previously. The research firm says that UMS’ 2021 earnings could surprise on the upside should factory utilization rates stay elevated throughout the year.
Venture Corp (VMS SP) continued to make gains following the rating upgrades by RHB and Morgan Stanley earlier this week. The analysts cited the stock’s favourable fundamentals and strong upcoming 2Q results. Venture is likely to release its 2Q results on Friday, 6th August. Shares were sold down last week after Macquarie issued an Underperform recommendation and a target price of S$13.20.
MC Payment (MCPP SP) will resume trading today. It had requested for a trading halt yesterday morning (30 June) to hold an extraordinary general meeting (EGM). In the EGM, shareholders voted to appoint five new directors to the company’s board. Meanwhile, most of the current directors, including CEO Anthony Koh and COO and executive director Kim Moon Soo, tendered their resignations from the board.
Trading Dashboard: Add Japan Foods (JFOOD SP) at S$0.405

Hong Kong

The HK market is closed today for a public holiday (Hong Kong Special Administrative Region Establishment Day). Trading resumes on Friday, 2 July 2021.

Hutchmed China Ltd (0013 HK). The stock was listed yesterday and surged to an intra-day high of HK$85.80. The IPO was priced at HK$40.10, while shares closed at HK$60.3, representing a 50.37% gain on the first day, bringing its total market cap to HK$51.2bn. Hutchmed was established in 2000 by Hutchison Whampoa, a subsidiary of Li Ka-shing, and it was one of the first pharmaceutical companies in China to develop innovative drugs. The stock is one of the few pharmaceutical companies listed in Hong Kong, US and UK simultaneously.
XD Inc (2400 HK). Shares closed at a 1-month high. Shares rose due to the strengthening of the gaming sector. Positive sentiment followed the announcement on Monday, 28th June, when the National Press and Publication Administration announced the approval information for imported online games in 2021. In addition, it was reported by Gamma Data in May 21’s Mobile Game Report that mobile game sales rose by 5.28% YoY.
SSY Group Ltd (2005 HK). Shares closed at an all-time high. The group announced that Shijiazhuang Siyao Co., Ltd., a wholly-owned subsidiary, has obtained an approval from the National Medical Products Administration for injection of azithromycin and is now the marketing authorizer for this product. The product is a freeze-dried powder injection formulation, which is mainly used to treat various infections caused by sensitive pathogens. By obtaining a freeze-dried powder injection form for the first time, the group has accelerated the speed of its corporate transformation.
Greentown China Holdings (3900 HK). There was no company specific news. Rise in share prices could be due to the positive outlook on China home prices, which are expected to grow faster in 2021 fuelled by hot demand in major cities. Despite stepped-up market restrictions by the Chinese government, prices are on a rising trajectory, said Huang Yu, vice president of China Index Academy, a Beijing-based property research institute.
Nayuki Holdings Ltd (2150 HK). The stock was listed today and closed at HK$17.12, falling nearly 14% from the issue price of HK$19.80. The market cap dropped toHK$29.4bn as of the closing price. We previously covered Nayuki under our IPO watch here.
Trading dashboard: Add Xinyi Solar (968 HK) at HK$16.5.

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