Investment Research - Asia Consumer Sector, Investory

Devi Subhakesan

Investment Research - Asia Consumer Sector

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 Bottom-Up

<p><a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP)</a> had reported a strong improvement in its Thailand operations for 9MFY2021 suggesting that a recovery is underway and we expect this could look up further as the country opens to tourists from November 1st (ending quarantine for visitors to tourist destinations). The stock, at current levels, does not seem to factor in an earnings recovery given it is trading at conservative valuations even on current earnings.  In the insight below, we share SOTP based valuation to assess the stock's upside potential and discuss possible catalysts and timelines.</p>

Thai Beverage (THBEV SP) had reported a strong improvement in its Thailand operations for 9MFY2021 suggesting that a recovery is underway and we expect this could look up further as the country opens to tourists from November 1st (ending quarantine for visitors to tourist destinations). The stock, at current levels, does not seem to factor in an earnings recovery given it is trading at conservative valuations even on current earnings.  In the insight below, we share SOTP based valuation to assess the stock's upside potential and discuss possible catalysts and timelines.

Thai Bev (THBEV SP): Neither Recovery nor BeerCo IPO Is Priced In. SOTP Suggests Upside.

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Equity Capital Markets

Weilong Delicious Global Holdi / Equity Capital Markets

<div><p>Weilong Delicious Global (WDG), a spicy snack food company in China, aims to raise around US$1bn in its Hong Kong IPO. </p></div><div><p>WDG sells products across three categories: seasoned flour products,  vegetable products and Bean-based and other products. According to Frost &amp; Sullivan (F&amp;S), in terms of retail sales value in 2020, WDG ranked first among all spicy snack food enterprises in China, with a market share of 5.7%, and ranked first in each of the seasoned flour product and spicy vegetable snack product categories.</p></div><div>
<p>We covered the positive aspects of the deal in our earlier note, <a href="https://www.smartkarma.com/insights/weilong-delicious-global-pre-ipo-the-positives-fast-growth-strong-backers" target="_blank" rel="noopener">Weilong Delicious Global Pre-IPO - The Positives - Fast Growth, Strong Backers.</a></p>
<p>In this note we will talk about some of the not so flattering aspects of the deal.</p>
</div>

Weilong Delicious Global (WDG), a spicy snack food company in China, aims to raise around US$1bn in its Hong Kong IPO. WDG sells products across three categories: seasoned flour products,  vegetable products and Bean-based and other products. According to Frost &amp; Sullivan (F&amp;S), in terms of retail sales value in 2020, WDG ranked first among all spicy snack food enterprises in China, with a market share of 5.7%, and ranked first in each of the seasoned flour product and spicy vegetable snack product categories.
We covered the positive aspects of the deal in our earlier note, Weilong Delicious Global Pre-IPO - The Positives - Fast Growth, Strong Backers.
In this note we will talk about some of the not so flattering aspects of the deal.


Weilong Delicious Global Pre-IPO - The Negatives - Spicy Valuation

<p>Weilong Delicious Global (WDG), a spicy snack food company in China, aims to raise around US$1bn in its Hong Kong IPO. </p><p>WDG sells products across three categories: seasoned flour products,  vegetable products and Bean-based and other products. According to Frost &amp; Sullivan (F&amp;S), in terms of retail sales value in 2020, WDG ranked first among all spicy snack food enterprises in China, with a market share of 5.7%, and ranked first in each of the seasoned flour product and spicy vegetable snack product categories.</p><p>Overall revenue growth has been strong at 23% YoY in 2019 and 21.7% in 2020 driven both by an increase in volumes and prices over 2019-20. Vegetable products have been the fastest growing category with a CAGR of 98% over FY18-20.</p><p>Along with strong revenue growth, WDG gross profit growth has been even stronger, with gross profit growing by 25-31% YoY over 2018-20. PAT grew at 25-38% over 2018-20.</p>

Weilong Delicious Global (WDG), a spicy snack food company in China, aims to raise around US$1bn in its Hong Kong IPO. WDG sells products across three categories: seasoned flour products,  vegetable products and Bean-based and other products. According to Frost &amp; Sullivan (F&amp;S), in terms of retail sales value in 2020, WDG ranked first among all spicy snack food enterprises in China, with a market share of 5.7%, and ranked first in each of the seasoned flour product and spicy vegetable snack product categories.Overall revenue growth has been strong at 23% YoY in 2019 and 21.7% in 2020 driven both by an increase in volumes and prices over 2019-20. Vegetable products have been the fastest growing category with a CAGR of 98% over FY18-20.Along with strong revenue growth, WDG gross profit growth has been even stronger, with gross profit growing by 25-31% YoY over 2018-20. PAT grew at 25-38% over 2018-20.

Weilong Delicious Global Pre-IPO - The Positives - Fast Growth, Strong Backers

<div>
<p><a href="https://www.smartkarma.com/entities/nongfu-spring" target="_blank" data-smartkarma-citation="entities:28955:1" rel="noopener">Nongfu Spring (9633 HK)</a> had one of the best debuts for large IPOs last year. Despite the recent correction, the stock is still trading 92.5% above its listing price. </p>
<p>In this note, we will talk about the prospects of large trades triggered by the lock-up expiry.</p>
</div><div>
<div><p>We have covered various aspects of the company in our earlier IPO notes:</p></div>
<div><ul style="list-style-type: disc;">
<li><a href="https://www.smartkarma.com/insights/nongfu-spring-pre-ipo-the-positives-leaves-one-thirsty-for-more" target="_blank" rel="noopener">Nongfu Spring Pre-IPO - The Positives - Leaves One Thirsty for More</a></li>
<li><a href="https://www.smartkarma.com/insights/nongfu-spring-pre-ipo-the-negatives-doesn-t-need-to-list-or-expand-production-facilities" target="_blank" rel="noopener">Nongfu Spring Pre-IPO - The Negatives - Doesn’t Need to List or Expand Production Facilities</a></li>
<li><a href="https://www.smartkarma.com/insights/nongfu-spring-pre-ipo-peer-comparison-superior-margins-and-growth" target="_blank" rel="noopener">Nongfu Spring Pre-IPO - Peer Comparison - Superior Margins and Growth</a></li>
<li><a href="https://www.smartkarma.com/insights/nongfu-spring-pre-ipo-first-stab-at-valuation" target="_blank" rel="noopener">Nongfu Spring Pre-IPO - First Stab at Valuation</a></li>
<li><a href="https://www.smartkarma.com/insights/nongfu-spring-pre-ipo-phip-updates" target="_blank" rel="noopener">Nongfu Spring Pre-IPO - PHIP Updates</a></li>
<li><a href="https://www.smartkarma.com/insights/nongfu-spring-pre-ipo-updates-to-valuation" target="_blank" rel="noopener">Nongfu Spring Pre-IPO - Updates to Valuation</a></li>
<li><a href="https://www.smartkarma.com/insights/nongfu-spring-ipo-not-cheap-by-any-measure-but-is-a-quality-name" target="_blank" rel="noopener">Nongfu Spring IPO - Not Cheap by Any Measure but Is a Quality Name</a></li>
<li><a href="https://www.smartkarma.com/insights/nongfu-spring-ipo-trading-update-strong-subscription-levels-in-a-league-of-its-own" target="_blank" rel="noopener">Nongfu Spring IPO Trading Update - Strong Subscription Levels, in a League of Its Own</a></li>
</ul></div>
</div>


Nongfu Spring (9633 HK) had one of the best debuts for large IPOs last year. Despite the recent correction, the stock is still trading 92.5% above its listing price. 
In this note, we will talk about the prospects of large trades triggered by the lock-up expiry.

We have covered various aspects of the company in our earlier IPO notes:

Nongfu Spring Pre-IPO - The Positives - Leaves One Thirsty for More
Nongfu Spring Pre-IPO - The Negatives - Doesn’t Need to List or Expand Production Facilities
Nongfu Spring Pre-IPO - Peer Comparison - Superior Margins and Growth
Nongfu Spring Pre-IPO - First Stab at Valuation
Nongfu Spring Pre-IPO - PHIP Updates
Nongfu Spring Pre-IPO - Updates to Valuation
Nongfu Spring IPO - Not Cheap by Any Measure but Is a Quality Name
Nongfu Spring IPO Trading Update - Strong Subscription Levels, in a League of Its Own



Nongfu Spring Lock-Up Could Correct the Tiny Float and Limited Trading

Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

Asian Insight Provider - Actionable ideas

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

<p>Stable result in Q2 2021 despite the increasing COVID-19 cases in Thailand from nightclubs and concerts prompting the Thai government to extend the ban for nightlife entertainment. The interesting part is that contrary to <a href="https://www.smartkarma.com/entities/berli-jucker-public-co-ltd" target="_blank" data-smartkarma-citation="entities:3685:1" rel="noopener">Berli Jucker (BJC TB)'s </a>observation that the Thais are quite happy to drink and socialize at home versus Vietnamese, who tend to consume outside the home, Sabeco (Saigon Bev Company)'s sales volume actually went up during this period and lifted <a href="https://www.smartkarma.com/entities/thai-beverage-pcl" target="_blank" data-smartkarma-citation="entities:3656:1" rel="noopener">Thai Beverage (THBEV SP)</a> results, further reiterating that the Thai may be happy to drink at home but the difficult period has dampened their home drinking appetite. </p><p>Thai Beverage is still trading at a lower valuation to its peak, the current valuation at 17x PER is still higher than 14x forward PER.  The recent Q2 2021 result brought some optimism especially when the management displayed cost savings ability but the spirits and beer outlook remain soft as long as the pandemic is still there. </p>

Stable result in Q2 2021 despite the increasing COVID-19 cases in Thailand from nightclubs and concerts prompting the Thai government to extend the ban for nightlife entertainment. The interesting part is that contrary to Berli Jucker (BJC TB)'s observation that the Thais are quite happy to drink and socialize at home versus Vietnamese, who tend to consume outside the home, Sabeco (Saigon Bev Company)'s sales volume actually went up during this period and lifted Thai Beverage (THBEV SP) results, further reiterating that the Thai may be happy to drink at home but the difficult period has dampened their home drinking appetite. Thai Beverage is still trading at a lower valuation to its peak, the current valuation at 17x PER is still higher than 14x forward PER.  The recent Q2 2021 result brought some optimism especially when the management displayed cost savings ability but the spirits and beer outlook remain soft as long as the pandemic is still there. 

Thai Beverage (THBEV): Weak Quarter Ahead

China

Budweiser Brewing Company APAC Limited is a company principally engaged in the brewing and distribution of beer. The Company produces, imports, markets, distributes over 50 brands including Budweiser, Stella Artois, Corona, Hoegaarden, Cass, and Harbin. The principal markets include China, South Korea, India and Vietnam.

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Budweiser Brewing APAC (1876 HK)

Thai Bev (THBEV SP): Neither Recovery nor BeerCo IPO Is Priced In. SOTP Suggests Upside.

SOTP based valuation analysis suggests room for near-term upside even at conservative valuation multiples assuming the worst of COVID is past us.

Devi Subhakesan

Weilong Delicious Global Pre-IPO - The Negatives - Spicy Valuation

Weilong Delicious Global, a spicy snack food company in China, aims to raise around US$1bn in its Hong Kong IPO. The company was recently backed by...

Sumeet Singh

Weilong Delicious Global Pre-IPO - The Positives - Fast Growth, Strong Backers

Weilong Delicious Global, a spicy snack food company in China, aims to raise around US$1bn in its Hong Kong IPO. It recently undertook a pre-IPO...

Sumeet Singh

Nongfu Spring Lock-Up Could Correct the Tiny Float and Limited Trading

Nongfu Spring had one of the best debuts for large IPOs last year. The stock is still trading 92.5% above its listing price. We talk about the...

Sumeet Singh

Thai Beverage (THBEV): Weak Quarter Ahead

Q2 2021 result brought some optimism especially when the management displayed cost savings ability but the spirits and beer outlook remain soft as...

Henry Soediarko

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