The share price fell too much.
2018/08/21
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Taiwanese market
Report Jane Weiser / Taipei
Industrial computer-driven leader Huahan (6414), stocks of the tourism consumption index – KY (2723) recent share prices are affected by negative factors, the short-term collapse is staggering, Morgan Stanley Securities jumped to escort, stressed that stock price is too high Large, it has negatively reflected, and has a strong support for Huahan, food – KY shares restored the prefix "3".
Since the announcement of the profit report for the second quarter, some shares have not risen and many companies have even reacted to bad news, resulting in increased volatility of Taiwan shares. When the share price was revised, the foreign capital circle again investigated the reasons for the fall in the share price, supplemented the growth of the annual profit and share price level and made the latest investment suggestions for its customers. The high-speaking Huahan and food-KY buying points the company came forward. This is the best case.
Shi Xiaojuan, head of research at Morgan Stanley Securities in Taiwan, pointed out that Huahan has been actively involved in mergers and acquisitions in recent years. The market is worried that mergers and acquisitions will generate goodwill valuation losses, and the decline in operating income is the main reason for the price drop in the past few days. The reversal of the share price shows that the market has revised expectations, furthermore considering future mergers and acquisitions and long-term profit growth, and the evaluation is attractive, valuing the outperform investment rating, speculating that the reasonable share price for the the next 12 months will be 380. yuan.
Da Mo does not recognize that the costs of mergers and acquisitions have an impact on the profitability that exceeds the imagination, but success in the long term is a foreseeable result. S & T invested by Huahan has used the procurement and production experience of Hon Hai Group Profit before tax (depreciation and amortization) (EBITDA) increased by 28% per year In the smart trend for product upgrade, this acquisition is not only for the Huahan expansion products. The category, turnover and profit from 2017 to 2020 will both fly with a combined growth of 36% and 23%.
Cheng Shiwei, a non-technical analyst at Morgan Stanley Securities, pointed out that the food-KY investment in the central kitchen on the American market will result in profit dilution and is well known in the market, but the food-KY movement is aimed at long-term profit growth. Dharma continues to view the North American layout of the food.
In addition, the food-KY has recently been removed from the mainland due to food problems from the food delivery platform. Food-KY pointed out that the associated app and the food delivery platform represented less than 10% of the revenue from the mainland. According to data from the Morgan Stanley Interview Company, the number of visitors to the food-KY store in mainland China has not changed much, and the good news is that the penetration rate of coffee consumption on the continental market has increased, providing a long-term structure for food-KY.
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