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ATHM

Long ATHM/Autohome This current setup indicates good value on decent fundamentals with a strong technical support line at 65USD. Business Fundamentals -Majority owned by Chinese Insurance Giant, Ping An Group -Part of HangSang Tech index (30 selected tech firms) -Dual-listed on HKSE & NYSE, interchangeable 1ADR to 4 HK listed shares (removes delisting fears) -Stable & consistent High Margins business over 10 yr period (88% gross margins, Net Margins of 39%, FCF to Sales % of 35%) -In a much better position (Financially & Operating business margins) as compared to other listed rivals UXIN & CANG (lower margins & UXIN is heavy in debt) Valuation -Cash of 19USD per share with no debt -Generates 4.3 USD EPS / 4 USD FCF per share -EPS Growth projected at 11% CAGR for next 3 years -At 63USD that is a 10 P/E ex-cash or a 15 P/E -For context, it usually trades at an average Price to operating earnings of 22 (based on 5yrs avg). Highs at 51x P/E with lows at 15x P/E. -If it reverts to the mean valuation of 22x P/E by 2023, we can expect a 116% ROI and a 35% annualized return from now(July 2021) to 2023 Technicals -Seems to have a strong resistance/support line at 65USD, which have been tested and bounced off many times (Oct 2018 & March 2020) -At a price of 65USD & below, seems like a good entry point
NYSE:ATHMLong
by FIRE_CAPITAL_SG