Daily Investment Strategy
Recommended Stock：JD (9618)
Revenue increased by 5.1% to RMB260.4bn in 3Q24, resulting from a rebound in growth of electronics and home appliances, and sustained momentum in general merchandise. Non-GAAP diluted net income per ADS increased by 29.5% for 3Q24 to RMB8.68 from RMB6.70 in 3Q23. The October retail sales data in China shows a yoy growth of 4.8%, exceeding market expectations of 3.8% and the previous value of 3.2%. Among the various categories, the "household appliances and audiovisual equipment" sector, supported by government policies, saw a significant increase of 39.2%, up from the previous value of 20.5%. This reflects the effectiveness of consumption boosting policies. JD.com become the biggest beneficiary of macro policies, including home appliance trade-in programs, measures to stimulate the real estate market (increasing demand for home appliance) and consumer coupons. 3Q result beat expectations, the investment value of JD remains. Target price: $175; Stop- Loss price: $121.
Retail Sales Data Supported by Policies Perform Well
Last Friday, China’s National Bureau of Statistics released data on retail sales, fixed asset investment, and industrial added value. Only retail sales exceeded market expectations, with government-supported home appliance sales growing by approximately 39.2%, reflecting the significant impact of policy measures aimed at boosting consumption. As for the other two indicators, although they were below market expectations, the discrepancies were not significant and mainly continued the previous weakness.
On Friday, the Southbound Stock Connect saw a net inflow of HK$920 million. Tencent (700) had the largest inflow of HK$630 million, followed by CSOP Hang Seng Tech ETF (3033). The Tracker Fund of Hong Kong (2800) recorded the largest net outflow of HK$5.74 billion, followed by Hang Seng China Enterprises Index ETF (2828).
Wen Kit Kenny is a SFC licensed person accredited to KGI Group to carry on regulated activities (for details, please refer to:https://apps.sfc.hk/publicregWeb/indi/AJF244/details). He and/or his associate do not have any financial interest in the recommended issuer or new listing applicant.
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