HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/vesync" target="_blank" data-smartkarma-citation="entities:31067:1" rel="noopener">Vesync (2148 HK)</a>'s suspension may suggest privatisation by the Yang family (68.8% stake). With US$192m public float and US$216m net cash, out-of-pocket cash needed is limited. </li>
<li>1H24 is decent with a 37.5% earnings growth and 3.3pp margin expansion. The consensus forecast of 4.8% growth in 2H24 is conservative, providing a good opportunity for privatisation.</li>
<li>Benchmarking the take-out price to the 3-year average P/B will mean a 33% upside while the sector's average PER multiple implies ~70% higher than the pre-suspension price.</li>
</ul>



Vesync (2148 HK)'s suspension may suggest privatisation by the Yang family (68.8% stake). With US$192m public float and US$216m net cash, out-of-pocket cash needed is limited. 
1H24 is decent with a 37.5% earnings growth and 3.3pp margin expansion. The consensus forecast of 4.8% growth in 2H24 is conservative, providing a good opportunity for privatisation.
Benchmarking the take-out price to the 3-year average P/B will mean a 33% upside while the sector's average PER multiple implies ~70% higher than the pre-suspension price.


Vesync (2148 HK): A Potential Privatisation?

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>Back on the 23 February, household appliance maker <a href="https://www.smartkarma.com/entities/js-global-lifestyle-co-ltd" target="_blank" data-smartkarma-citation="entities:28155:1" rel="noopener">JS Global Lifestyle (1691 HK)</a> proposed spinning off SharkNinja's ex-Asia Pac ops in the U.S.  </li>
<li>This spin-off would be undertaken as a distribution in-specie, creating a parallel listing structure for SharkNinja and the remaining operations.</li>
<li>Shareholders of JSG will vote on the separate listing at the EGM on the 26 June, with the last day cum-entitlement on the 27 June.</li>
</ul>


Back on the 23 February, household appliance maker JS Global Lifestyle (1691 HK) proposed spinning off SharkNinja's ex-Asia Pac ops in the U.S.  
This spin-off would be undertaken as a distribution in-specie, creating a parallel listing structure for SharkNinja and the remaining operations.
Shareholders of JSG will vote on the separate listing at the EGM on the 26 June, with the last day cum-entitlement on the 27 June.


JS Global (1691 HK)'s SharkNinja Spin-Off

Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

<ul>
<li>Hong Kong tech sector leads the market higher with increased momentum and lower volatility.  Short selling has abated with unwind of HKD carry trade.</li>
<li>
<a href="https://www.smartkarma.com/entities/sands-china-ltd" target="_blank" data-smartkarma-citation="entities:182:1" rel="noopener">Sands China (1928 HK)</a> had a breakout from a Falling Wedge pattern. The share price broke above its short-term averages with increasing momentum.
</li>
<li>
<a href="https://www.smartkarma.com/entities/china-feihe-ltd" target="_blank" data-smartkarma-citation="entities:24413:1" rel="noopener">China Feihe (6186 HK)</a> broke out from its downtrend with a Reversal from its U-Shaped Bottom.  <a href="https://www.smartkarma.com/entities/techtronic-industries-co-ltd" target="_blank" data-smartkarma-citation="entities:4561:1" rel="noopener">Techtronic Industries (669 HK)</a> broke out to a new YTD high.
</li>
</ul>


Hong Kong tech sector leads the market higher with increased momentum and lower volatility.  Short selling has abated with unwind of HKD carry trade.

Sands China (1928 HK) had a breakout from a Falling Wedge pattern. The share price broke above its short-term averages with increasing momentum.


China Feihe (6186 HK) broke out from its downtrend with a Reversal from its U-Shaped Bottom.  Techtronic Industries (669 HK) broke out to a new YTD high.



Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 23)

<ul>
<li>
<a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home (6690 HK)</a> is less exposed to China's real estate market than one would have thought. Despite poor property industry, HSH still generated 12.9% earnings growth in 3Q23.</li>
<li>We are delighted to see further margin pick-up in 2Q23-3Q23, thanks to digitalisation and better efficiency. We believe such a trend can be sustained over the next 12-18 months. </li>
<li>More innovative products will drive market share, and better margin can support a 13% 3-year earnings CAGR. ROE is high at 17-8% despite net cash (8.8% of share price).   </li>
</ul>



Haier Smart Home (6690 HK) is less exposed to China's real estate market than one would have thought. Despite poor property industry, HSH still generated 12.9% earnings growth in 3Q23.
We are delighted to see further margin pick-up in 2Q23-3Q23, thanks to digitalisation and better efficiency. We believe such a trend can be sustained over the next 12-18 months. 
More innovative products will drive market share, and better margin can support a 13% 3-year earnings CAGR. ROE is high at 17-8% despite net cash (8.8% of share price).   


<ul>
<li>
<a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home Co Ltd (6690 HK)</a> revealed that domestic sales are performing well in the "Double-11" festival and overseas sales have outperformed peers in Black Friday.</li>
<li>The high-end brand Casarte has maintained good market shares in refrigerators, drum washing machines and air-conditioners. Overseas market also saw positive upgrade demand. </li>
<li>Its digitalisation strategy has enhanced customers' shopping experience and increased repurchases. HSH has also achieved improvements in overall efficiency through such efforts.</li>
</ul>



Haier Smart Home Co Ltd (6690 HK) revealed that domestic sales are performing well in the "Double-11" festival and overseas sales have outperformed peers in Black Friday.
The high-end brand Casarte has maintained good market shares in refrigerators, drum washing machines and air-conditioners. Overseas market also saw positive upgrade demand. 
Its digitalisation strategy has enhanced customers' shopping experience and increased repurchases. HSH has also achieved improvements in overall efficiency through such efforts.


Haier Smart Home (6690 HK): Further Updates from Management

United States

JS Global Lifestyle Company Limited provides household appliances. The Company offers pressure and induction cookers, air fryers, countertop grills, upright and robotic  vacuums, water purifier, ventilator, thermos, and other related products. JS Global Lifestyle serves customers worldwide.

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JS Global Lifestyle (1691 HK)

Vesync (2148 HK): A Potential Privatisation?

Vesync may be heading towards privatisation by the Yang family which owns a 68.8% stake. Using historical P/B average and sector PER average as...

Osbert Tang, CFA

JS Global (1691 HK)'s SharkNinja Spin-Off

Wow - SharkNinja (SN US)'s market cap on its first day of trading is ~US$4.2bn - a punchy 23x trailing PER - well above the expected value of...

David Blennerhassett

Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 23)

Hong Kong tech sector is key to lead the market higher. Lower volatility & decreased short selling volume provide tailwinds for HSTECH index. Sands...

David Mudd

Haier Smart Home (6690 HK): Stays Smart

Haier Smart Home is less exposed to real estate market than expected. Digitalisation and efficiency improvements are driving margin; and...

Osbert Tang, CFA

Haier Smart Home (6690 HK): Further Updates from Management

Sales have performed well in "Double-11" festival and Black Friday. Overseas markets have seen positive upgrade demand and digitalisation has...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Vesync (2148 HK): A Potential Privatisation?

​Vesync may be heading towards privatisation by the Yang family which owns a 68.8% stake. Using historical P/B average and sector PER average as...

Osbert Tang, CFA

JS Global (1691 HK)'s SharkNinja Spin-Off

Wow - SharkNinja (SN US)'s market cap on its first day of trading is ~US$4.2bn - a punchy 23x trailing PER - well above the expected value of...

David Blennerhassett

Technically Speaking, Breakouts and Breakdowns: HONG KONG (SEPTEMBER 23)

Hong Kong tech sector is key to lead the market higher. Lower volatility & decreased short selling volume provide tailwinds for HSTECH index. Sands...

David Mudd

Haier Smart Home (6690 HK): Stays Smart

​Haier Smart Home is less exposed to real estate market than expected. Digitalisation and efficiency improvements are driving margin; and...

Osbert Tang, CFA

Haier Smart Home (6690 HK): Further Updates from Management

Sales have performed well in "Double-11" festival and Black Friday. Overseas markets have seen positive upgrade demand and digitalisation has...

Osbert Tang, CFA

Vesync may be heading towards privatisation by the Yang family which owns a 68.8% stake. Using historical P/B average and sector PER average as...

Haier Smart Home is less exposed to real estate market than expected. Digitalisation and efficiency improvements are driving margin; and...