Target price: HK$508. Daiwa reiterates its "Buy" rating while writing the rationale like a medical checkup report: international business is the new growth engine, and buybacks are being executed.
The brokerage’s rating is old-school gentlemanly etiquette: first, it hands you a handsome target price, then it notes in parentheses that it is "based on a 12-month forward P/E multiple." This string of qualifiers is the most honest—and most sly—part of the entire report. It turns a favorable view into an equation; and in that equation, each variable can change in the future.
What’s worth thinking about is that the two things it praises have nothing to do with "growth" and everything to do with "shareholder returns": buybacks and profit margins. When a company starts talking about valuation through buybacks, it often means the growth story has already been told. That’s not necessarily a bad thing, but it shouldn’t be treated as a growth stock anymore.
So whether HK$508 is reliable is not judged by the acceleration of international orders, but by where the money for buybacks comes from: operating cash flow, or borrowed funds. This will be impossible to hide in the cash-flow statement of the next quarterly report.
#港股 #出行 #Consumption
The brokerage’s rating is old-school gentlemanly etiquette: first, it hands you a handsome target price, then it notes in parentheses that it is "based on a 12-month forward P/E multiple." This string of qualifiers is the most honest—and most sly—part of the entire report. It turns a favorable view into an equation; and in that equation, each variable can change in the future.
What’s worth thinking about is that the two things it praises have nothing to do with "growth" and everything to do with "shareholder returns": buybacks and profit margins. When a company starts talking about valuation through buybacks, it often means the growth story has already been told. That’s not necessarily a bad thing, but it shouldn’t be treated as a growth stock anymore.
So whether HK$508 is reliable is not judged by the acceleration of international orders, but by where the money for buybacks comes from: operating cash flow, or borrowed funds. This will be impossible to hide in the cash-flow statement of the next quarterly report.
#港股 #出行 #Consumption
