China's easing, OPEC+'s Oil Production Cut, Recovery Play
G92
Comments on Annual Quantitative Analysis
- End 2023 Price Target using same PE as 2022 = $1.24
- End 2023 Price Target using same Sales Multiple as 2022 = $0.73
- Forecasted Revenue to decrease but Net Income to increase in 2023. The increase in Net Income could be attributed to the increase in Other Income. Lower Revenue is affected by the decrease of oil prices and volume. Other Income is contributed by Interest Income and government rebates.
Quantitative Analysis (Sector Comparisons)
- Stock P/E on a premium to sector and is positive.
- Stock Earnings Growth is sequentially positive and above sector average.
Comments on Business
- Return to pre-pandemic travel levels and in-office work a positive factor on growth.
- World’s largest online marketplace for pet care and world’s leading pet services app.
- Stronger bookings particularly for overnight boarding and house sitting services, during months of June, July, and August, and November and December, which in a typical year coincides with high travel demand related to summer and holiday travel, respectively.
- Total air traffic in 2022 rose 64.4% year-on-year. Number of global airlines has also increased.
- International Air Transport Association (“IATA”) predicts total airline revenue to recover to around 93% of the pre-COVID level in 2023.
- Air travel demand in Asia Pacific on expectations that China’s air travel-related restrictions will be progressively alleviated. Asia Pacific is expected to record a significant improvement but will still post a net loss of approximately US$6.6 billion.
KPI's Driving Revenue and Earnings
- OPEC+’s decision to extend oil production cuts could offset losses.
- Decrease in total expenses due to decrease of expected credit loss (“ECL”) and bank charges.
Trade Structure
Entry - $0.885
Target - $0.980
Stop - $0.835