May 25th, 2022 | 13:06 CEST
Asia on the rise - Good rebound opportunities for JinkoSolar, Hong Lai Huat and BYD
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"[...] We recognized that there is a lack of business models that combine innovative business concepts, such as "new retail" solutions and omni-channel strategies, with conventional business segments. [...]" Fan Xian Yong, CEO, The Place Holdings
Impressive turnaround in Cambodia
The Hong Lai Huat Group, headquartered in Singapore, benefited from its decades of experience as a real estate developer and builder of everything from public and private residential complexes to commercial and industrial buildings in the past two years of crisis. As a result, a significant turnaround in earnings was reported for the full year 2021 after a weaker Corona year 2020. Net profit from continuing operations rose to EUR 4.09 million from a loss of EUR 5.23 million in the previous year. Sales exploded 132% from EUR 4.83 million to EUR 11.20 million, with gross margin reaching a strong 62%. Net liquidity increased to EUR 13.41 million, putting Hong Lai Huat in a position to continue to grow inorganically through acquisitions in 2022.
Since 2008, it has been able to expand to the Kingdom of Cambodia with the construction of one of the largest privately-owned plantation farms. This was followed by the D'Seaview mixed-use real estate project in Sihanoukville, Cambodia, with 737 residential and 67 commercial units. In 2019 this was followed by Royal Platinum, the second mixed-use project. Here, 90% of the units have already been sold to local and international buyers.
With a payout ratio of around 2.20%, the Company is also moving into the spotlight for dividend hunters. In addition, the stock should become attractive for many investors who want to invest away from the European and North American stock markets and are looking for diversification. In any case, there are signs of strength via the currency. In recent months, the Singapore dollar has appreciated by more than 10% against the euro. Hong Lai Huat is valued low with a price-to-book ratio of 0.35 and thus offers considerable upside potential with a market capitalization of EUR 32.64 million.
BYD - Defying the negative trend
One thing has to be said for the BYD share. While other Chinese companies lost more than half of their stock market value in some cases last year due to the restrictions, the electric vehicle manufacturer remained steadfast. Even the failure of the supply chains and Russia's invasion of Ukraine, which resulted in a stock market quake, only affected the "Build Your Dream" share in the short term. At EUR 30.52, the critical support area was defended, and the next price target is EUR 35 before a new all-time high of EUR 36.70 is likely to be reached. The analysts of Credit Suisse are already assuming new highs and, in their latest study, again gave the "outperform" rating with a new price target of HKD 368, equivalent to EUR 43.75.
The Seal electric sedan with CTB battery technology, which was unveiled in March and is expected to achieve a range of up to 700 km, is also being positively received. Experts believe that the sedan could become one of the flagships in the Chinese company's portfolio. Around 24,000 orders were already received in the first 6 hours of sales alone. Customers can choose between four different versions.
JinkoSolar with European premiere
Premiere for the Chinese producer of solar cells, solar modules and mounting systems for solar modules. The first European framework agreement for the distribution of energy storage solutions (ESS) was signed with Memodo GmbH. The exclusivity agreement for JinkoSolar's ESS product portfolio covers Germany, Austria and Switzerland until the end of 2023.
"The distributed power generation market is growing impressively in Europe, and with this exclusive collaboration with Memodo for the DACH region, we will continue to achieve our growth targets for both the PV and ESS markets. We believe that the synergy between JinkoSolar and Memodo will lead us to the desired successes in these fast-growing areas of the PV industry," JinkoSolar's general manager for Europe, Frank Niendorf, said in a press release.
At USD 56.81, the Company is still just below its breakout level, which is just shy of USD 57.70. Thus, at the current level, the opportunity for short-term trading gains would be a given. The level at USD 55.00 would be a suitable stop.
The Asian continent has become the engine of the global economy in recent years. After the Corona pandemic, the growth curves here should show a clear upward trend again. With its projects in Singapore and the emerging Kingdom of Cambodia, Hong Lai Huat is promising in the long term. BYD and JinkoSolar both show relative strength compared to the overall market.
Conflict of interest
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