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Upward Stock: Tencent, KDDI Corp, Siam Commercial Bank PCL, Bangkok Bank Public, Alibaba Health Information Technology, Z Holdings and more

In today’s briefing:

  • China Internet Weekly (July 4, 2022): Tencent, Alibaba, NetEase, JD.com, Trip.com
  • KDDI (Buy) – Network outage is a bad look but worries should fade over time
  • SCB – Regular Loans, Capital Growth
  • BBL: So far so good
  • Alibaba Health Information Technology (241.HK) – Breaking a deadlock is not easy
  • Z Holdings (4689) | SOTP Reveals a Huge Benefit

By Ming Lu

  • The Alibaba CEO’s article was published in a government journal, which may be a positive signal for non-state-owned companies.
  • Prosus sells stakes in Tencent and JD.com to buy back its own shares.
  • Tencent is trying to use game technologies in other areas.

By Kirk Boody

  • KDDI’s entire network was out of service over the weekend and although service has been restored, there are still sporadic complaints
  • There are near-term risks of increased user churn and loss of revenue in Q2, but these are at the margin and the downside should be manageable (i.e. no change in company guidelines)
  • Beyond short-term weakness, KDDI remains an attractive defensive play

By Daniel Tabbush

  • SCB is well positioned to take advantage of the delta in tourism
  • There will be a special mid-year dividend, amount still unknown
  • Acquisition of BitKub announced last year, still on hold, may not materialize

By Pi Research

  • Hold BUY for BBL with a target price of 159.00 Bt. We like its strong balance sheet to withstand uncertainty, sustainable earnings growth, potential benefits from an up interest rate cycle
  • Strong net profit in 2Q22: We expect Bangkok Bank (BBL) to post a net profit of Bt 7.4 billion in 2Q22, up 17% YoY (+4% QoQ).
  • Loan growth in 2Q22 is expected to increase 1% QoQ given an expected increase in corporate loans and loans originated through the international network. Asset quality remains resilient

By Xinyao (Criss) Wang

  • Alibaba Health’s core pharmaceutical direct selling business is facing challenges in terms of increased competition as well as declining revenue and margin growth, weighing on overall performance.
  • Recent new policies regarding online drug sales on third-party digital healthcare platforms and online diagnosis and treatment would add more uncertainties to Alibaba Health’s business and outlook.
  • If this unfavorable trend continues, the gap between Alibaba Health and JD Health would be wider. Breaking the deadlock is not easy. Investors may need to take this into account.

By Mark Chadwick

  • Shares of Z HD sold off sharply along with other tech stocks amid rising interest rate environment
  • However, we believe the top 3 business segments are all performing very well and will continue to gain market share
  • Using global comps, we believe Z HD has more than 100% advantage and is the top choice in the online space in Japan

Related Symbols: Tencent (0700.HK), KDDI Corp (9433.T), Bangkok Bank Public (BBL.BK), Alibaba Health Information Technology (0241.HK), Z Holdings (4689.T)