KGI Research Singapore

Singapore's leading broker offering Futures, FX, Equities and Wealth Management.

KGI Trading Ideas – 10 December 2020

US Market movers

Doordash’s (DASH) 86% share price surge out of the gate exemplified continued strong market demand for high growth tech-driven companies.

Airbnb (ABNB) is poised to IPO later today at USD68 a share, and is likely to perform well despite being negatively affected by COVID-19. In 3Q20 Airbnb was able to earn a USD219mn profit through USD1.34bn of sales.

Tesla -7% and Facebook -1.9% from Federal Trade Commission antitrust lawsuit. Lowe’s +5.9% from announcing a USD 15bn stock buyback programme.

Trading recommendations

BUY AMBEV (ABEV US) Entry – 3.07 Target – 3.39 Stop Loss – 2.89

  • Alcohol plays remained fairly resilient but have yet to fully recover to pre-COVID levels
  • Ambev saw strong momentum as of recent, breaking past the 200 EMA mark
  • We recommend a higher entry point and to watch for volume breakout as this could potentially be a double top scenario

Hong Kong Market movers

  • Li Ning (2331 HK) +4.2%, Goldman Sachs raised TP from HK$44 to HK$52 and maintained an overweight rating
  • Haidilao (6862 HK) +3.1%, HSBC raised the TP from HK$30.2 to HK$38.5 but maintained an underweight rating
  • NetEase (9999 HK) -4.3%, underperformer amid tech sector sell-down

New Hong Kong IPO –
Pop mart international group limited (9992 HK)

  • Largest and fasting-growing pop toy company in China
  • Operates 85 intellectual properties in pop toys
  • Unique business model of operating blind box vending machines and online sales channel
  • IPO price: HK$38.5; Subscription rate: 79x

Trading recommendations

BUY Anhui Conch Cement (914 HK) Entry – 47.5 Target – 55.8 Stop Loss – 43

  • The company is Asia’s largest cement producer. Share price weakness due to reasons below. But we think share price has already priced in the headwinds, and we expect a rebound soon.
  • Northern part of China is suffering from a serious haze problem this winter season and authorities are restricting the operation of infrastructure projects in several regions.
  • Demand from southern part of China has weakened due to more rainy days.
  • 4Q20 cement price is expected to drop YoY but slightly trend up QoQ

Singapore Market movers

  • Nanofilm (NANO SP) +9.9% on news that it will join three FTSE indices, thus giving the company more visibility among international investors.
  • Yangzijiang (YZJSGD SP) +3.0% on buybacks and cheap valuations. Despite its removal from MSCI Singapore last month, Yangzijiang valuations are attractive as it trades below its net cash level. The company continues to buy back SGD 1 mn of its shares every single day since the start of December 2020. Total share buyback year-to-date amounts to SGD 50mn.