Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

<ul>
<li><strong>Although Hong Kong markets have slumped after Trump's election, mainland China's markets have gained.  Southbound net buying of HK stocks hit a 2024 high on the day Trump won.</strong></li>
<li>
<a href="https://www.smartkarma.com/entities/sands-china-ltd" target="_blank" data-smartkarma-citation="entities:182:1" rel="noopener"><strong>Sands China (1928 HK)</strong></a><strong> had a breakout from a double top as Macau recorded good Golden Week arrivals.  <a href="https://www.smartkarma.com/entities/blue-moon-group-holdings" target="_blank" data-smartkarma-citation="entities:29179:1" rel="noopener">Blue Moon Group Holdings (6993 HK)</a> had a breakout after 3 years.</strong>
</li>
<li>
<a href="https://www.smartkarma.com/entities/cansino-biologics-inc" target="_blank" data-smartkarma-citation="entities:27739:1" rel="noopener"><strong>CanSino Biologics (6185 HK)</strong></a><strong> formed a breakout after a new vaccine was approved and it reported better results.  <a href="https://www.smartkarma.com/entities/haidilao-international-holding" target="_blank" data-smartkarma-citation="entities:27044:1" rel="noopener">Haidilao International Holding (6862 HK)</a> share price advanced as it expands stores.</strong>
</li>
</ul>


Although Hong Kong markets have slumped after Trump's election, mainland China's markets have gained.  Southbound net buying of HK stocks hit a 2024 high on the day Trump won.

Sands China (1928 HK) had a breakout from a double top as Macau recorded good Golden Week arrivals.  Blue Moon Group Holdings (6993 HK) had a breakout after 3 years.


CanSino Biologics (6185 HK) formed a breakout after a new vaccine was approved and it reported better results.  Haidilao International Holding (6862 HK) share price advanced as it expands stores.



Technically Speaking, Breakouts and Breakdowns: HONG KONG (NOVEMBER 13)

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

<ul>
<li>Green Tea’s future performance growth is uncertain due to increasing competition, changes in consumer tastes, lack of a secondary growth curve, unsatisfactory table turnover rate and the old menu.</li>
<li>Simply opening more restaurants cannot break through development bottlenecks.Whether shares would perform well after IPO depends on if Green Tea is able to deliver persuasive/sustainable growth story to the market.</li>
<li>The moat of Green Tea is still “fragile”. We think the valuation of Green Tea should be between <a href="https://www.smartkarma.com/entities/haidilao-international-holding" target="_blank" data-smartkarma-citation="entities:27044:1" rel="noopener">Haidilao (6862 HK)</a> and <a href="https://www.smartkarma.com/entities/jiumaojiu-international-holdings-limited" target="_blank" data-smartkarma-citation="entities:28293:1" rel="noopener">Jiumaojiu (9922 HK)</a>, <a href="https://www.smartkarma.com/entities/ajisen-china-holdings-ltd" target="_blank" data-smartkarma-citation="entities:990:1" rel="noopener">Ajisen (538 HK)</a>.</li>
</ul>


Green Tea’s future performance growth is uncertain due to increasing competition, changes in consumer tastes, lack of a secondary growth curve, unsatisfactory table turnover rate and the old menu.
Simply opening more restaurants cannot break through development bottlenecks.Whether shares would perform well after IPO depends on if Green Tea is able to deliver persuasive/sustainable growth story to the market.
The moat of Green Tea is still “fragile”. We think the valuation of Green Tea should be between Haidilao (6862 HK) and Jiumaojiu (9922 HK), Ajisen (538 HK).


Pre-IPO Green Tea Group - Lack of an Attractive "Growth Story"

<ul>
<li><strong>Hong Kong market is range bound with conglomerates showing strength over the last few weeks.  As the CNY/HKD strengthens the A/H premium should narrow.</strong></li>
<li>
<a href="https://www.smartkarma.com/entities/sunevision-holdings-ltd" target="_blank" data-smartkarma-citation="entities:110:1" rel="noopener"><strong>SUNeVision Holdings (1686 HK)</strong></a><strong> reported good results on the back of increased demand driven by the AI sector. </strong>
</li>
<li>
<a href="https://www.smartkarma.com/entities/yum-china-holdings-inc-0533692c-6dae-4014-baa1-ed0b050638f2" target="_blank" data-smartkarma-citation="entities:29259:1" rel="noopener">Yum China Holdings <strong>(9987</strong> HK)</a>,<strong><a href="https://www.smartkarma.com/entities/yum-china-holdings-inc" target="_blank" data-smartkarma-citation="entities:23677:1" rel="noopener">Yum China Holdings (YUMC US)</a> reported flat sales and an increase in operating profit in a difficult fast food retail environment in China.</strong>
</li>
</ul>


Hong Kong market is range bound with conglomerates showing strength over the last few weeks.  As the CNY/HKD strengthens the A/H premium should narrow.

SUNeVision Holdings (1686 HK) reported good results on the back of increased demand driven by the AI sector. 


Yum China Holdings (9987 HK),Yum China Holdings (YUMC US) reported flat sales and an increase in operating profit in a difficult fast food retail environment in China.



BUY/SELL/HOLD: Hong Kong Stock Updates (September 12)

Greater China Equity Long/Short Analyst

Eric Chen

<ul>
<li>We believe the company is well positioned in China's rapidly growing pizza market thanks to its strong brand and superior store economics. </li>
<li>Despite stock rally post 1H23 results, market still underestimates its earnings for both near and long term. We expect RMB250 million net profit for 2024 versus break-even by consensus.  </li>
<li>History suggests DPC Dash has recipe for attractive stock return driven by its highly visible growth that can shield it from macro situations, which is desperately needed by China investors.  </li>
</ul>


We believe the company is well positioned in China's rapidly growing pizza market thanks to its strong brand and superior store economics. 
Despite stock rally post 1H23 results, market still underestimates its earnings for both near and long term. We expect RMB250 million net profit for 2024 versus break-even by consensus.  
History suggests DPC Dash has recipe for attractive stock return driven by its highly visible growth that can shield it from macro situations, which is desperately needed by China investors.  


DPC Dash (1405 HK): Recipe for Multibagger

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.

<div><p><a href="https://www.smartkarma.com/entities/jiumaojiu-international-holdings" target="_blank" data-smartkarma-citation="entities:28293:1" rel="noopener">Jiumaojiu (9922 HK)</a> is a Chinese restaurant chain operator which operates 328 outlets in China under five brands. Jiumaojiu will commence trading on Wednesday, 15 January. Jiumaojiu priced its IPO at HK$6.60 per share (at the top-end of the range). </p></div><div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/jiumaojiu-international-ipo-valuation-reasonable-for-the-growth" target="_blank" rel="noopener">our valuation note</a>, we stated that the IPO price range is attractive in the context of Jiumaojiu's earnings growth potential. Our DCF analysis supports this view and our DCF-based scenario analysis suggests that the IPO price is undemanding.</p></div></div></div>

Jiumaojiu (9922 HK) is a Chinese restaurant chain operator which operates 328 outlets in China under five brands. Jiumaojiu will commence trading on Wednesday, 15 January. Jiumaojiu priced its IPO at HK$6.60 per share (at the top-end of the range). In our valuation note, we stated that the IPO price range is attractive in the context of Jiumaojiu's earnings growth potential. Our DCF analysis supports this view and our DCF-based scenario analysis suggests that the IPO price is undemanding.

Jiumaojiu: Trading Debut, Valuation Scenario Analysis

Hong Kong

Ajisen (China) Holdings Limited operates a chain of casual restaurants that offers Japanese ramen and Japanese-style dishes in Hong Kong and People's Republic of China.

Price Gauge
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Ajisen China Holdings (538 HK)

Technically Speaking, Breakouts and Breakdowns: HONG KONG (NOVEMBER 13)

Mainland China's A-share market advanced after Trump's election as South Connect buying hit a 3 year high. Sands China had a breakout as Macau...

David Mudd

Pre-IPO Green Tea Group - Lack of an Attractive "Growth Story"

Green Tea faces uncertain future growth due to competition/changing tastes/operational challenges.Valuation should be between Haidilao and...

Xinyao (Criss) Wang

BUY/SELL/HOLD: Hong Kong Stock Updates (September 12)

Hong market should benefit from a stronger CNY/HKD as the Fed begins to cut rates. SUNeVision is benefiting from increased demand from the AI...

David Mudd

DPC Dash (1405 HK): Recipe for Multibagger

We believe the company has the right recipe to become another multibagger in China's catering sector thanks to its strong brand and superior store...

Eric Chen

Jiumaojiu: Trading Debut, Valuation Scenario Analysis

Jiumaojiu (9922 HK) is a Chinese restaurant chain operator which operates 328 outlets in China under five brands. Jiumaojiu will commence trading...

Arun George

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Technically Speaking, Breakouts and Breakdowns: HONG KONG (NOVEMBER 13)

Mainland China's A-share market advanced after Trump's election as South Connect buying hit a 3 year high. Sands China had a breakout as Macau...

David Mudd

Pre-IPO Green Tea Group - Lack of an Attractive "Growth Story"

​Green Tea faces uncertain future growth due to competition/changing tastes/operational challenges.Valuation should be between Haidilao and...

Xinyao (Criss) Wang

BUY/SELL/HOLD: Hong Kong Stock Updates (September 12)

Hong market should benefit from a stronger CNY/HKD as the Fed begins to cut rates. SUNeVision is benefiting from increased demand from the AI...

David Mudd

DPC Dash (1405 HK): Recipe for Multibagger

We believe the company has the right recipe to become another multibagger in China's catering sector thanks to its strong brand and superior store...

Eric Chen

Jiumaojiu: Trading Debut, Valuation Scenario Analysis

Jiumaojiu (9922 HK) is a Chinese restaurant chain operator which operates 328 outlets in China under five brands. Jiumaojiu will commence trading...

Arun George

Green Tea faces uncertain future growth due to competition/changing tastes/operational challenges.Valuation should be between Haidilao and...