IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

China Youran Dairy Group Ltd / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/china-youran-dairy-group-ltd" target="_blank" data-smartkarma-citation="entities:31075:1" rel="noopener">China Youran Dairy Group Ltd (1836774D CH)</a> is the world’s largest raw milk provider as measured by herd size of dairy cows as of 30 June 2020 and raw milk production volume in 1H20, according to Frost &amp; Sullivan. Youran was once a wholly-owned subsidiary of <a href="https://www.smartkarma.com/entities/inner-mongolia-yili-indus-a" target="_blank" data-smartkarma-citation="entities:3220:1" rel="noopener">Inner Mongolia Yili Industrial Group (A) (600887 CH)</a> until PAG Capital’s investment in 2015. Youran is pre-marketing an HKEx IPO to raise $800 million, according to press reports.   </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/china-youran-dairy-group-ipo-initiation-ecownomics" target="_blank" data-smartkarma-citation="insights:51709" rel="noopener">China Youran Dairy Group IPO Initiation: Ecownomics</a>, we stated that notwithstanding its high revenue dependence on Yili, Youran is capitalising on the favourable demand-supply imbalance for raw milk in China by delivering strong organic growth (on a pro-forma basis), rising margins and accretive acquisitions. We concluded that Youran is worth a look. In this note, we present our forecasts and take the first look at Youran's potential valuation range. </p></div></div></div>

China Youran Dairy Group Ltd (1836774D CH) is the world’s largest raw milk provider as measured by herd size of dairy cows as of 30 June 2020 and raw milk production volume in 1H20, according to Frost &amp; Sullivan. Youran was once a wholly-owned subsidiary of Inner Mongolia Yili Industrial Group (A) (600887 CH) until PAG Capital’s investment in 2015. Youran is pre-marketing an HKEx IPO to raise $800 million, according to press reports.   In China Youran Dairy Group IPO Initiation: Ecownomics, we stated that notwithstanding its high revenue dependence on Yili, Youran is capitalising on the favourable demand-supply imbalance for raw milk in China by delivering strong organic growth (on a pro-forma basis), rising margins and accretive acquisitions. We concluded that Youran is worth a look. In this note, we present our forecasts and take the first look at Youran's potential valuation range. 

China Youran Dairy Group IPO: Valuation First-Look

Quality-first, Business-perspective Strategy, Urbem (HK) Limited

Steven Chen

Quality-first, Business-perspective Strategy

Equity Bottom-Up

Perfect Medical Health / Equity Bottom-Up

<ul>
<li>Perfect Shape: founder consistently increased his stake; management appears confident in expansion initiatives;</li>
<li>Hermes International: APAC has been gaining greater significance, as expected;</li>
<li>A2 Milk: more than half of the company is functioning brilliantly for shareholders; I presume a short-term glitch for the remaining.</li>
</ul>


Perfect Shape: founder consistently increased his stake; management appears confident in expansion initiatives;
Hermes International: APAC has been gaining greater significance, as expected;
A2 Milk: more than half of the company is functioning brilliantly for shareholders; I presume a short-term glitch for the remaining.


Recent Updates: Perfect Shape, Hermes Int'l, A2 Milk

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

China Mengniu Dairy Co / Equity Bottom-Up

<div class="content-highlight">
<p>One of the biggest trends that COVID-19 has resulted has been the impact on the global population as millions of people delay having babies due to so many uncertainties associated with virus. China has been no exception. As such, the <a href="https://www.cnbc.com/2021/04/15/chinas-central-bank-pboc-paper-suggests-dropping-childbirth-limits.html" target="_blank" rel="noopener">People's Bank of China</a> released a working paper on 14 April that suggested that China faces severe population problems and that <strong>China allow three or more children per household. </strong></p>
<p>All in all, despite this urgent message from the People's Bank of China regarding the need to scrap the restriction in childbirth policy, this is not yet official. Nonetheless, given the fact that this document is coming from the People's Bank of China combined with the need to combat the big negative impact of COVID-19 on people having children, there could be an increasing probability that the Chinese government could indeed announce a change its policy to allow three or more children in 2021.</p>
</div><p>Some of the key infant formula related stocks that could benefit from the Chinese government allowing three or more children include <a href="https://www.smartkarma.com/entities/a2-milk-co-ltd-95d4fbed-afa1-41e9-bafb-a5f1ef97622e" target="_blank" data-smartkarma-citation="entities:22775:1" rel="noopener">A2 Milk Co Ltd (A2M AU)</a>, Beingmate Baby &amp; Child Food (002570 CH), and <a href="https://www.smartkarma.com/entities/china-mengniu-dairy-co" target="_blank" data-smartkarma-citation="entities:354:1" rel="noopener">China Mengniu Dairy Co (2319 HK)</a>.</p>


One of the biggest trends that COVID-19 has resulted has been the impact on the global population as millions of people delay having babies due to so many uncertainties associated with virus. China has been no exception. As such, the People's Bank of China released a working paper on 14 April that suggested that China faces severe population problems and that China allow three or more children per household. 
All in all, despite this urgent message from the People's Bank of China regarding the need to scrap the restriction in childbirth policy, this is not yet official. Nonetheless, given the fact that this document is coming from the People's Bank of China combined with the need to combat the big negative impact of COVID-19 on people having children, there could be an increasing probability that the Chinese government could indeed announce a change its policy to allow three or more children in 2021.
Some of the key infant formula related stocks that could benefit from the Chinese government allowing three or more children include A2 Milk Co Ltd (A2M AU), Beingmate Baby &amp; Child Food (002570 CH), and China Mengniu Dairy Co (2319 HK).

China May Scrap The Restriction of Childbirths - Impact on Baby Formula Related Stocks in China

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Thematic (Sector/Industry)

<div>
<p>In my insight <em><a href="https://skr.ma/5UGLq" target="_blank" rel="noopener">Virtual IPOs/Direct Listings: Uninhibited Price Discovery</a></em> on the 29 November last year, I mentioned a white paper on special purpose acquisition company (SPAC) may be issued by the SGX in the first half of the following year. </p>
<p>Last week the Business Times <a href="https://www.businesstimes.com.sg/companies-markets/sgx-looking-into-listing-of-special-purpose-acquisition-companies" target="_blank" rel="noopener">reported</a> that a consultation could be launched by the SGX as early as this quarter.</p>
<p>SPACs, or blank-check companies, racked up ~US$80bn in the US in 2020. Once listed and cashed-up, SPACs target investment acquisitions or mergers, providing an alternate back-door listing opportunity for companies. In effect, SPACs synthetically combines a credit instrument with equity upside. </p>
<p>SPACs are non-existent in Asia. SGX's expected consultation paper may herald a strategic push by the bourse to become Asia's SPAC hub. With some US-based SPACs packaging Southeast Asian assets, SGX's motives may well be one of "<em>if you can't beat them, join them</em>".</p>
</div>


In my insight Virtual IPOs/Direct Listings: Uninhibited Price Discovery on the 29 November last year, I mentioned a white paper on special purpose acquisition company (SPAC) may be issued by the SGX in the first half of the following year. 
Last week the Business Times reported that a consultation could be launched by the SGX as early as this quarter.
SPACs, or blank-check companies, racked up ~US$80bn in the US in 2020. Once listed and cashed-up, SPACs target investment acquisitions or mergers, providing an alternate back-door listing opportunity for companies. In effect, SPACs synthetically combines a credit instrument with equity upside. 
SPACs are non-existent in Asia. SGX's expected consultation paper may herald a strategic push by the bourse to become Asia's SPAC hub. With some US-based SPACs packaging Southeast Asian assets, SGX's motives may well be one of "if you can't beat them, join them".


Singapore Exchange: Asia's Future SPAC Hub

<ul>
<li>According to our definition, A2 Milk is a wonderful business largely thanks to its superior return on capital guarded by a multi-layered moat, a megatrend-driven growth prospect, and the capability to compound earnings for shareholders;</li>
<li>Mr. Market displayed his short-termism in terms of the stock recently, which we think provides a rare entry point for investors interested in the company into 2021.</li>
</ul>


According to our definition, A2 Milk is a wonderful business largely thanks to its superior return on capital guarded by a multi-layered moat, a megatrend-driven growth prospect, and the capability to compound earnings for shareholders;
Mr. Market displayed his short-termism in terms of the stock recently, which we think provides a rare entry point for investors interested in the company into 2021.


New Zealand

a2 Milk Company Limited produces cow milk which is free of a protein called beta casein A1.  The Company offers its products in Australia and New Zealand.

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A2 Milk Co Ltd (ATM NZ)

China Youran Dairy Group IPO: Valuation First-Look

Youran is pre-marketing an HKEx IPO to raise $800 million, according to press reports. In this note, we present our forecasts and take the first...

Arun George

Recent Updates: Perfect Shape, Hermes Int'l, A2 Milk

In this article, let's go through some recent updates from three high-quality businesses in my highly selective investable universe.

Steven Chen

Singapore Exchange: Asia's Future SPAC Hub

Often the disinclination to introduce change is due to an absence of public market sophistication or a deep ecosystem. The SGX should make amends...

David Blennerhassett

2021 High Conviction: A2 Milk

Buying quality businesses at or below fair prices and holding them for the long run is the key to generate alpha. A2 Milk at the current level...

Steven Chen

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China Youran Dairy Group IPO: Valuation First-Look

Youran is pre-marketing an HKEx IPO to raise $800 million, according to press reports. In this note, we present our forecasts and take the first...

Arun George

Recent Updates: Perfect Shape, Hermes Int'l, A2 Milk

In this article, let's go through some recent updates from three high-quality businesses in my highly selective investable universe.

Steven Chen

China May Scrap The Restriction of Childbirths - Impact on Baby Formula Related Stocks in China

The People's Bank of China released a paper on 14 April that suggested that China allow three or more children per household. In this insight, we...

Douglas Kim

Singapore Exchange: Asia's Future SPAC Hub

Often the disinclination to introduce change is due to an absence of public market sophistication or a deep ecosystem. The SGX should make amends...

David Blennerhassett

2021 High Conviction: A2 Milk

Buying quality businesses at or below fair prices and holding them for the long run is the key to generate alpha. A2 Milk at the current level...

Steven Chen