(Bloomberg) — Meituan and Chow Tai Fook Jewellery Group Ltd.’s earnings should reveal how China’s consumer market is shaping up, with sentiment weighed down by a slow economic recovery, prolonged property woes and an unstable employment environment.
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The country’s retail sales grew at the strongest pace in eight months in October, boosted by Beijing’s recent efforts to boost consumption. Still, consumers remain cautious on spending as the government stimulus package hasn’t meaningfully improved consumers’ income yet, Boston Consulting Group said.
Meituan — among the last of China’s biggest tech companies to release results — is expected to have powered through the consumer malaise, “defying gravity with superior growth amid a weak economy,” Morgan Stanley said. The food-delivery platform benefited from local government consumption voucher programs, with the country’s vow to strengthen development of platform economy and increase policy support.
While Chow Tai Fook, which posts first-half earnings this week, may struggle to sustain fiscal second-half revenue at the previous year’s level after downsizing its store network in China, as the decline in jewelry sales probably slowed, Bloomberg Intelligence said.
Over in Malaysia, lenders Malayan Banking Bhd and CIMB Group Holdings Bhd are set to face continued funding-cost pressures as the central bank is likely to hold policy rates into next year. Maybank may have an edge over its competitors thanks to its high percentage of low-cost deposits, BI said.
Highlights to look out for:
Tuesday: Maybank (MAY MK) is expected to post slower net income growth because of margin pressure, BI analysts said. Loan growth is expected to be a bright spot, as evidenced by central bank data, and Maybank’s domestic consumer mortgage book is the fastest-growing among peers, they said.
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Chow Tai Fook’s (1929 HK) earnings were likely dragged down by weak retail sentiment and high gold prices. The jeweler has said it expects fiscal first-half revenue to decrease 18% to 22%, which analysts from Citi and Jefferies said was in line with expectations.
Thursday: CIMB Group’s (CIMB MK) third-quarter net income probably fell 4.2%, estimates show. A steady net interest margin and healthy loan growth provided support, BI said. Its asset quality remains stable through lower credit costs, with UOB Kay Hian saying the Malaysian loans portfolio has seen improvements in consumer delinquency rates.
