Equity Analyst, Investory

Devi Subhakesan

Equity Analyst

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

Equity Capital Markets

MIXUE Group operates freshly-made drinks stores. The Company provides freshly-made fruit drinks, tea drinks, ice cream, and coffee. MIXUE Group conducts businesses across worldwide.

<ul>
<li>Mixue Group, the largest freshly-made drinks company in China, is reportedly set to begin book building for its Hong Kong IPO by end-February, targeting to raise approximately USD 500 million.</li>
<li>
<a href="https://www.smartkarma.com/entities/mixue-group" target="_blank" data-smartkarma-citation="entities:40623:1" rel="noopener">Mixue Group (MIX HK)</a>'s mass-market pricing strategy and compelling value for money positioning targets price-sensitive consumers, especially in lower-tier cities and among youth, driving high-volume sales.</li>
<li>
<a href="https://www.smartkarma.com/entities/mixue-group" target="_blank" data-smartkarma-citation="entities:40623:1" rel="noopener">Mixue Group (MIX HK)</a> reported robust revenue and profit growth for first nine months of 2024 led by new store openings and margin expansion despite sector slowdown and intensifying competition.</li>
</ul>


Mixue Group, the largest freshly-made drinks company in China, is reportedly set to begin book building for its Hong Kong IPO by end-February, targeting to raise approximately USD 500 million.

Mixue Group (MIX HK)'s mass-market pricing strategy and compelling value for money positioning targets price-sensitive consumers, especially in lower-tier cities and among youth, driving high-volume sales.

Mixue Group (MIX HK) reported robust revenue and profit growth for first nine months of 2024 led by new store openings and margin expansion despite sector slowdown and intensifying competition.


Mixue IPO: More than Just Tea. Key Facts, Financials and Analysis

HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

China Tobacco International (HK) / Equity Bottom-Up

China Tobacco International (HK) Company Limited engages in tobacco international trading business. The Company provides tobacco leaf products import and export, cigarettes export, new tobacco products export, and other services. China Tobacco International (HK) serves customers primarily from China and Southeast Asia.

China Tobacco International (HK) (6055 HK)

<ul>
<li>Management of <a href="https://www.smartkarma.com/entities/china-tobacco-international" target="_blank" data-smartkarma-citation="entities:27859:1" rel="noopener">China Tobacco International (HK) (6055 HK)</a> is bullish on earnings in the next two years, with tobacco leaf import and cigarette export being the key drivers.</li>
<li>Elevated tobacco leaf price is positive to CTI while more re-opening of duty-free shops (currently only 50% of pre-COVID level) will add to revenue momentum.</li>
<li>A light gearing of just 2% and potentially more parent asset injection are CTI's strengths. The company plans to maintain a steady uptrend on absolute DPS annually. </li>
</ul>


Management of China Tobacco International (HK) (6055 HK) is bullish on earnings in the next two years, with tobacco leaf import and cigarette export being the key drivers.
Elevated tobacco leaf price is positive to CTI while more re-opening of duty-free shops (currently only 50% of pre-COVID level) will add to revenue momentum.
A light gearing of just 2% and potentially more parent asset injection are CTI's strengths. The company plans to maintain a steady uptrend on absolute DPS annually. 


China Tobacco Intl (6055 HK): A Bullish Expectation

AviChina Industry & Technology H / Equity Bottom-Up

AviChina Industry & Technology Co Ltd manufactures and sells aviation tools and aero-parts. The Company's main products include helicopters, regional aircrafts, trainers, general aircrafts, aero-parts and components and aero-electrical products.

AviChina Industry & Technology H (2357 HK)

<ul>
<li>Given its holdings in four A-share subsidiaries, <a href="https://www.smartkarma.com/entities/avichina-industry-technology-h" target="_blank" data-smartkarma-citation="entities:16315:1" rel="noopener">AviChina Industry &amp; Technology H (2357 HK)</a> will benefit from the surge in their share prices as mainland markets re-open.</li>
<li>These A-share all lagged benchmark Indices YTD. Avichina's holdings in them are already valued at 2.23x its own market capitalisation. </li>
<li>The historical discount range is 51-70% and currently stands at 55%, suggesting AviChina's share price has not yet excessively priced in the post-Golden Week rally.</li>
</ul>


Given its holdings in four A-share subsidiaries, AviChina Industry &amp; Technology H (2357 HK) will benefit from the surge in their share prices as mainland markets re-open.
These A-share all lagged benchmark Indices YTD. Avichina's holdings in them are already valued at 2.23x its own market capitalisation. 
The historical discount range is 51-70% and currently stands at 55%, suggesting AviChina's share price has not yet excessively priced in the post-Golden Week rally.


AviChina Industry (2357 HK): Excellent Exposure to A-Share Surge

Blue Lotus China New Economy Research, Blue Lotus Research Institute

Eric Wen

Blue Lotus China New Economy Research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

Thematic (Sector/Industry)

<ul>
<li>LKNCY US: Luckin Coffee Opens Its 20,000th Store . (+)</li>
<li>1810 HK/NIO US/XPEV US/1211 HK:July holiday saw normal seasonliaty in EV sales, Xiaomi ramp up nicely（///////）</li>
<li>XPEV US: Details of new refreshed Xpeng sedan P7 revealed (+)</li>
</ul>


LKNCY US: Luckin Coffee Opens Its 20,000th Store . (+)
1810 HK/NIO US/XPEV US/1211 HK:July holiday saw normal seasonliaty in EV sales, Xiaomi ramp up nicely（///////）
XPEV US: Details of new refreshed Xpeng sedan P7 revealed (+)


[Blue Lotus Daily]:LKNCY US/1810 HK/NIO US/XPEV US/1211 HK/MNSO US/3690 HK/981 HK/AAPL US/700 HK

MINISO Group Holding is a value retailer with a focus on offering products that are aesthetically pleasing, good-quality, and affordable.

<ul>
<li>Miniso report C4Q23 revenue in-line/7.9% vs. our estimate/consensus, non-GAAP NI is 5.1%/10.5% higher than our estimate/consensus on strong overseas sales from North and Latin Americas. </li>
<li>Company guided for soft operating margin thanks to robust new store openings, which we believe to be accretive to earnings in the long run</li>
<li>We maintain the stock as BUY and but cut TP by US$2 to US$31/ADS</li>
</ul>


Miniso report C4Q23 revenue in-line/7.9% vs. our estimate/consensus, non-GAAP NI is 5.1%/10.5% higher than our estimate/consensus on strong overseas sales from North and Latin Americas. 
Company guided for soft operating margin thanks to robust new store openings, which we believe to be accretive to earnings in the long run
We maintain the stock as BUY and but cut TP by US$2 to US$31/ADS


[Miniso Group (MNSO US, BUY, TP US$31) Target Price Change]: Near Term Story Is Still the Americas

Opportunities and Impact of China's Reopening

China Reopening
Opportunities and Impact of China's Reopening

[Miniso Group(MNSO US,BUY,TP US$33)TP Change]:Investor Day Called for Growth on Supply Chain and IP

Miniso's Investor Day highlighted their growth strategy of connecting with Chinese supply chain for fast turnaround. Expect higher revenue and non...

Blue Lotus Research Institute

[Blue Lotus Lodging Sector Update]: Dividend from Supply Shortage Can Continue into 2024

China hotels can continue to enjoy the premium pricing in the next 6-12 months, thanks to supply shortage in reopening. Atour (ATAT) looks...

Blue Lotus Research Institute

Global Monthly - Six urgent questions on China

The main driver of the global growth slowdown is the spike in inflation and interest rates, not China, but a sharper reopening rebound would have...

ABN AMRO

Yunkang Group (2325 HK) – Healthy Growth in Non-COVID Business

Yunkang Group reported 1H23 revenue of RMB476.9mn, down by 65.4% YoY, primarily due to the sharp decline of diagnostic testing demand for COVID-19...

CMB International

[Miniso Group (MNSO US, BUY, TP US$26) Review]: Strong Demand Support Further Store Openings

We think Miniso’s strategy to open more flagship stores is in-line with its brand upgrade strategy for seeking price premium beyond value-for...

Blue Lotus Research Institute

[Miniso Group(MNSO US,BUY,TP US$33)TP Change]:Investor Day Called for Growth on Supply Chain and IP

​Miniso's Investor Day highlighted their growth strategy of connecting with Chinese supply chain for fast turnaround. Expect higher revenue and non...

Blue Lotus Research Institute

[Blue Lotus Lodging Sector Update]: Dividend from Supply Shortage Can Continue into 2024

China hotels can continue to enjoy the premium pricing in the next 6-12 months, thanks to supply shortage in reopening. Atour (ATAT) looks...

Blue Lotus Research Institute

Global Monthly - Six urgent questions on China

The main driver of the global growth slowdown is the spike in inflation and interest rates, not China, but a sharper reopening rebound would have...

ABN AMRO

Yunkang Group (2325 HK) – Healthy Growth in Non-COVID Business

Yunkang Group reported 1H23 revenue of RMB476.9mn, down by 65.4% YoY, primarily due to the sharp decline of diagnostic testing demand for COVID-19...

CMB International

[Miniso Group (MNSO US, BUY, TP US$26) Review]: Strong Demand Support Further Store Openings

We think Miniso’s strategy to open more flagship stores is in-line with its brand upgrade strategy for seeking price premium beyond value-for...

Blue Lotus Research Institute

Miniso's Investor Day highlighted their growth strategy of connecting with Chinese supply chain for fast turnaround. Expect higher revenue and non...