Trendspotter: In-Depth Analysis of Hong Kong Retail Stocks

Broker Name: CGS International Securities

Date of Report: December 4, 2024

Simcere Pharmaceutical Group Ltd (2096): A Bullish Outlook

Simcere Pharmaceutical Group Ltd has shown a promising potential for continued upside, according to the latest analysis by CGS International Securities. The stock maintains an impressive trajectory after breaking out of a downtrend line that started in January 2023. It has since formed a series of higher highs and lows, indicating the early stages of an upward trend.

The technical indicators are all pointing towards a bullish continuation. The price has broken out of a pennant formation, confirming the bullish outlook. Moreover, the prices are trending above all Ichimoku indicators, with the MACD/signal line on the rise and a positive histogram. The 23-period Rate of Change (ROC) has risen above the zero line, reinforcing the bullish sentiment.

The directional movement index confirms the bullish strength, supported by a volume increase above the 20-period average. Analysts suggest entry prices at 7.30, 6.80, and 6.30, with support levels at 6.16 and 5.10. The target prices are set at 8.85, 10.10, 13.22, and 15.00, with a stop loss at 5.87.

Perfect Medical: Anticipating a Consumption Recovery

Perfect Medical is expected to see a recovery in consumption in the second half of the fiscal year 2025. However, the company reported a 15% year-on-year drop in core net profit for the first half of FY3/25, primarily due to weak consumption in Hong Kong and China.

Revenue in China is expected to fall by approximately 10% year-on-year in FY25F, attributed to fewer new store openings and a lack of price adjustments. Despite these challenges, the recommendation is to reiterate an “Add” rating, with a target price adjusted to HK\$3.40, based on 10x CY26F P/E.

L.K. Technology Holdings Ltd: Sequential Recovery Expected

L.K. Technology Holdings Ltd is anticipated to experience a sequential recovery in the second half of FY3/25. The details of this recovery are yet to be fully outlined in the report, but the expectation aligns with broader market trends.

MIDI Utama Indonesia: An Underrated Alpha

MIDI Utama Indonesia is highlighted as an underrated alpha within its group. While specifics are not elaborated in this report, the company is positioned as a promising entity, potentially offering significant returns.

Bank Mandiri: Key Takeaways from BMRI Group Call

Insights from the BMRI group call indicate strategic movements within Bank Mandiri. Although the report does not delve into detailed figures or projections, the call underscores the bank’s strategic initiatives and potential areas of growth.

Conclusion

The December 4, 2024, report by CGS International Securities provides a comprehensive analysis of select Hong Kong retail stocks. With a focus on the bullish prospects of Simcere Pharmaceutical Group Ltd and the anticipated recovery of Perfect Medical, investors are advised to consider these opportunities carefully. The in-depth technical analysis and market insights ensure that investors have a robust framework to guide their investment decisions in the Hong Kong retail sector.