KGI DAILY MARKET MOVERS – 20 April 2021

IPO WATCH

TRIP.COM (TCOM US / 9961 HK): Share gains 4.6% on HK IPO debut

Online travel platform TRIP.COM’s HK-listed shares rose 4.6% to close at HK$280.2 on Monday.
The company raised US$1.1bn which it will use to expand its travel offerings and invest in technology to boost its market position as the Chinese domestic travel market recovers from the pandemic.
TRIP.COM, which operates booking sites such as Skyscanner, is the fourth US-listed Chinese company to dual list in Hong Kong this year. Weibo and Tencent Music Entertainment Group are among the next batch of US-listed Chinese companies that are planning to list in the city.
Its share price performance has a strong seasonality, especially in May, due mainly to the Golden Week (May Day) holidays. Based on the 17-year historical track record since its IPO in 2003, the stock delivers the best monthly return in May with an average 7.4% gain.
Valuations are currently attractive at 77x/22x/17x FY2021/22/23F and the company is forecasted to report earnings per share growth (EPS) of 106%/248%/31% in FY 2021/22/23F, according to consensus estimates.

TRIP US Monthly Seasonal Share Price Returns (2004-2021 YTD)

UiPath (PATH US): Pricing US$52-54 and raising S$1.1bn

PATH will trade on 21 April, Wednesday.
PATH has raised its offering to 23.9mn shares at US$52 to US$54 each, up from the initial IPO price range of US$43 to US$50. The higher pricing implies a Price/Sales of 45x, a slight premium to other high-growth software stocks. The company will be valued up to S$28bn based on the latest pricing range.
PATH is the leading Robotic Process Automation (RPA) software in the market, counting over 7,900 customers including 63% of the Fortune 500.
PATH structures the low-code software to be scalable from a single department to an entire enterprise, and runs UiPath Academy to teach anyone to be able to build up RPA for their own needs. As a result, the company boasts a dollar-based net retention rate of 145%, in line with other high-growth popular software products.

MARKET MOVERS

United States

Futu Holdings Limited (FUTU US) had a double digit daily gain amidst an overall market sell-down on Monday. However, the company announced after market hours that it will offer 9.5 million ADS to the market, sending the shares down 5% in after hours trading.
Sundial Growers (SNDL US) and other cannabis stocks saw some share price gains on the eve of 4/20, an annual cannabis-oriented celebration day.
Herman Miller Inc (MLHR US) gapped down after their acquisition announcement of Knoll Inc (KNL US), another office furniture maker, with a US$1.8 billion cash-and-stock deal that was close to a 45% premium for Knoll’s Friday close price.
Playboy Group (PLBY US) continued its descent after peaking on early Friday trading. Non-fungible token (NFT) plays have largely lost steam after entering April, with most NFT-linked stocks till trading above their prior bases, but on a continuous descent.
Trading Dashboard: Include Facebook at US$303.

Earnings Watch: Netflix, P&G, Johnson&Johnson (Tuesday); Lam Research, ASML, Chipotle (Wednesday); Intel, AT&T, Dr Horton (Thursday); American Express (Friday)

Hong Kong

Fuyao Glass Industry Group Co Ltd (3606 HK) The company announced 1Q21 results. Revenue grew by 36.8% YoY to RMB5.7bn. Net profit attributable to company shareholders grew by 85.9% YoY to RMB855mn. The market is upbeat on its outlook and upgraded their target prices after earnings were announced. CitiGroup upgraded its TP to HK$54 from HK$49 and maintained a BUY rating.
Xinte Energy Co Ltd (1799 HK) Clean energy sector jumped as the National Energy Administration of PRC proposed that the total volume of wind power and solar power will account for 11% of total power demand, and that the percentage will grow to 16.5% by 2025. Meanwhile, authorities are also accelerating the merger of the grid in 2022.
Sinopharm Group Co., Ltd. (1099 HK) Shares closed at a 52-week high. More than 100mn people were reported to have been vaccinated with the two COVID-19 vaccines under the group. There has not been any serious adverse reaction found.
Zhuzhou CRRC Times Electric Co Ltd (3898 HK). Some institutions say the dual listing in the STAR board will be announced soon. Additionally, the company is actively exploring other areas of business.
Xiabuxiabu Catering Mgt Chn Hldgs Co Ltd (520 HK). Shares plunged as the CEO resigned, leaving investors concerned about its future development.

Trading Dashboard: Take profit on Haier Smart Home (6690 HK) at 33.75

Singapore

Sembcorp Industries (SCI SP) rose 10% after Credit Suisse initiated coverage with an OUTPERFORM recommendation and a target price of S$2.40. Similarly, HSBC upgraded its target price to S$2.61 from S$1.68, and upgraded the stock to a BUY rating, citing the company’s shift toward renewables.
Singtel (ST SP) announced yesterday that it would review its strategic options after Thailand’s power producer Gulf Energy Development made a conditional voluntary offer to buy all of Intouch Holdings at 65 baht per share. Gulf Energy will also tender for Advanced Info’s shares at 122.86 baht each if it manages to secure at least 50% of Intouch. Singtel currently has a 21% effective stake in Intouch and 23% of Advanced Info. Singtel currently offers a forward dividend yield of 4-5% over the next three years.
Yangzijiang (YZJSGD SP). The company announced that it had entered into shipbuilding contracts for another 15 vessels with a total contract value of S$970mn for deliveries in 2022-2023. Yangzijiang has secured a total of 75 shipbuilding contracts worth S$4.0bn year-to-date.
ThaiBev (THBEV SP). Shares of THBEV fell after the company announced that it will delay the IPO of its Brewery Unit due to the resurgence of Covid-19 in its home market of Thailand. However, shares were well supported and saw buying interest towards the afternoon trading session. Despite the negative news, street consensus estimates have remained largely unchanged. THBEV has 17 BUYS, 1 HOLD and 0 SELLS, and a 12-month target price of S$0.93.

Earnings watch: Aztech Global (AZTECH SP) will report its Business Performance Update for the first quarter this Wednesday, 21 April after close of trading.