Hong Kong Retail Research: In-Depth Analysis of Top Companies

Broker: CGS International | Date: November 4, 2024

West China Cement Ltd (2233): Bullish Trend to Continue

West China Cement Ltd is showing a promising bullish trend. The recent price action suggests a return to the uptrend, likely to continue. Key highlights include:

• The stock has broken above the overhead resistance since May 2024.
• A strong bullish break above the key psychological resistance at HK\$1.10.
• Prices are trending above all Ichimoku indicators.
• MACD histogram is positive, and the MACD/signal line is rising above the zero line.
• Stochastic Oscillator is rising.
• 23-period ROC is staying above the zero line.
• Directional movement index reflects strong bullish strength.
• Volume has risen strongly, confirming the breakout.

Entry prices are set at 1.25, 1.10, and 0.90 with support levels at 1.11 and 0.80. Stop loss is placed at 0.84, while resistance levels are at 1.35 and 1.80. Target prices range from 1.40 to 2.00.

Li Auto Inc (HKG)

Li Auto Inc has reported impressive financials for 3Q24:

• Sales of Rmb43bn, a 24% year-on-year growth and 35% quarter-on-quarter growth.
• Non-GAAP net profit of Rmb3.8bn, representing an 11% year-on-year growth and 156% quarter-on-quarter growth.

The company is expected to see a boost in its margin profile with the upcoming BEV models in FY25F. The recommendation remains an ‘Add’ with a higher DCF-based target price of HK\$139.

Midea-A (CHN)

Midea-A, a leading domestic home appliance manufacturer in China, is poised for significant growth in the fourth quarter of 2024. The company is expected to see soaring sales, which could positively impact its financial performance.

Advanced Info Service (THB)

Advanced Info Service reported a strong 3Q24 performance, supported by robust handset sales. This has contributed to the company’s net profit, indicating a positive outlook for the remainder of the year.

Additional Market Insights

The broader market has also shown resilience. Despite a late-week rebound and some volatility due to economic data, earnings, and the US election, the S&P 500 has rallied roughly 20% through the end of October 2024, marking the strongest performance in a presidential election year since 1936. Industry bellwethers like Amazon.com Inc., Intel Corp., and Exxon Mobil Corp. have led the gains, underscoring the strength of Corporate America. Wall Street remains optimistic, focusing on long-term drivers of the bull market.

Conclusion

Overall, the reports from West China Cement Ltd, Li Auto Inc, Midea-A, and Advanced Info Service highlight a positive outlook for these companies. Investors are advised to consider these insights for making informed decisions in the dynamic market environment.