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

External broker reports(aggregated public sources), CMB International

CMB International

External broker reports(aggregated public sources)

Incorporated in Hong Kong, supported by the mainland and targeting in global market, CMB International Capital Corporation Limited (“CMBI”) is an integrated financial institution providing comprehensive and professional services. As a wholly-owned subsidiary of China Merchants Bank ("CMB"), by leveraging on the Group’s synergy and coordination in domestic and overseas markets, as well as CMB’s strong resources and outstanding social reputation, CMBI and its subsidiaries have been actively implementing diversified business strategies and set up an overall layout of main business segments including Corporate Finance, Asset Management, Wealth Management, Global Markets and Structured Finance, etc. Adhering to the philosophy of “being clients oriented and increasing our own values by the way of creating value for clients”, CMBI endeavors to provide quality and integrated financial services to institutional, corporate and individual customers both domestic and overseas including Hong Kong IPO sponsorship and underwriting, share placement and rights issue for listed companies, financial advisors, bonds issuance services, asset management, direct investment, wealth management, equity sales and trading, etc.

Equity Bottom-Up

<ul><li>Despite the spin-off of Shark Ninja (ex-APAC), JS global could still be attractive to the investors, because of: 1) potential turnaround of Joyoung, 2) rapid growth from Shark Ninja APAC and 3) rather distressed valuation (even after considering the small cap, holding and A/H discounts).</li><li>We still give it a BUY rating with TP of HK$ 1.84, based on 8x FY24E P/E, 40% discount to industry average of 13.3x.</li><li>The current valuation is at 5.4x (or 3.2x ex-cash) FY24E P/E.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Despite the spin-off of Shark Ninja (ex-APAC), JS global could still be attractive to the investors, because of: 1) potential turnaround of Joyoung, 2) rapid growth from Shark Ninja APAC and 3) rather distressed valuation (even after considering the small cap, holding and A/H discounts).We still give it a BUY rating with TP of HK$ 1.84, based on 8x FY24E P/E, 40% discount to industry average of 13.3x.The current valuation is at 5.4x (or 3.2x ex-cash) FY24E P/E.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

JS Global Lifestyle (1691 HK) – Distressed valuation and potential turnaround

HK/China Equity Long-Short

Osbert Tang, CFA

<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

<ul>
<li>Besides as nationalistic consumption play, <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> also offers attractive investment theses with bright growth prospects. Despite share price rebound, valuations are still not yet reflecting fundamentals.</li>
<li>The surge in demand for refrigerators and freezers during the pandemic-led lockdowns has boosted HSH's business in 4M22 while it will also reap benefits from Rmb depreciation.</li>
<li>The government's support of healthy development of residential real estate market will be positive towards smart home appliance demand which HSH is set to gain from its leadership position. </li>
</ul>


Besides as nationalistic consumption play, Haier Smart Home (6690 HK) also offers attractive investment theses with bright growth prospects. Despite share price rebound, valuations are still not yet reflecting fundamentals.
The surge in demand for refrigerators and freezers during the pandemic-led lockdowns has boosted HSH's business in 4M22 while it will also reap benefits from Rmb depreciation.
The government's support of healthy development of residential real estate market will be positive towards smart home appliance demand which HSH is set to gain from its leadership position. 


United States

Beazer Homes USA, Inc. designs, builds, and sells single family homes in the Southeast, Southwest, and South Central regions of the United States.  The Company's homes are designed to appeal to entry-level and first move-up home buyers.

The Lovesac Company retails home furnishing products. The Company offers alternative furniture store, sectionals, bean bags, bean bag chairs, as well as other accessories such as blankets, footsacs, and throw pillows. Lovesac serves customers in the State of Connecticut.

iRobot Corporation manufactures robots that vacuum and wash floors and perform battlefield reconnaissance and bomb disposal. The Company markets its products to consumers through retailers, the United States military, and other government agencies worldwide.

Hovnanian Enterprises, Inc. designs, constructs, and markets single-family homes, townhomes, and condominiums in planned residential communities. The Company operates in the states of New Jersey, North Carolina, Pennsylvania, Virginia, Maryland, New York, California, Texas, Tennessee, Alabama, and Mississippi, and in Poland. Hovnanian also provides mortgages to its homebuyers.

NACCO Industries, Inc. is an operating holding company. The Company's subsidiaries operate in coal mining and marketing, small electric household appliances, commercial products for restaurants, bars and hotels, and specialty retail of kitchenware and gourmet foods.

Hamilton Beach Brands Holding Company operates as a holding company. The Company, through its subsidiaries, markets and designs electric household and specialty house wares appliances, as well as commercial products for restaurants, bars, and hotels. Hamilton Beach Brands Holding serves consumers, commercial, and retail sectors in the United States.

Lifetime Brands, Inc. designs, markets, and distributes household cutlery, kitchenware, cutting boards, and bakeware.  The Company markets its products under its own tradenames and licensed tradenames.  Lifetime Brand's products are distributed through retailers in the United States.

Flexsteel Industries, Inc. manufactures and sells wooden and upholstered furniture for the retail, contract, and recreational vehicle (RV) furniture markets. The Company's products are sold to furniture dealers, department stores, and RV manufacturers throughout the United States. Flexsteel also sells its products to several national chains that sell on a private label basis.

Universal Electronics Inc. manufactures and markets preprogrammed universal wireless remote controls, wireless keyboards, and gaming controls principally for home video and audio entertainment equipment. The Company sells and licenses its devices and proprietary technologies worldwide to OEM's, private label manufacturers and companies involved in the cable and satellite industries.

Hooker Furniture Corporation manufactures and imports residential furniture, primarily targeted at the upper-medium price range.  The Company's products include home office furniture, entertainment centers, imported occasional furniture, and bedroom and wall systems.  Hooker sells its products to furniture retailers, catalog merchandisers, and national and regional chain stores.

Q TECHNOLOGY (GROUP) Company Limited is a PRC-based camera module manufacturer focusing on mid-to-high end camera module market for Chinese branded smartphone, tablet and PC manufacturers.

Jiangsu Tongrun Equipment Technology Co., Ltd. manufactures tool cabinets, steel furniture, other sheet metal products and sheet metal machines.

Miyakoshi Holdings, Inc. operates as a holding company. The company, through its subsidiaries, manufactures, markets, and sells audio & visual equipment. Its products include TVs, DVD players, and multimedia players. The Company is also engaged in the wholesale of pharmaceutical and medical equipment products.

Shenzhen New Nanshan Holding Group Co., Ltd manufactures and designs pre-fabricated houses, products include construction sites offices and houses, special houses for energy or mining projects, urban municipal settlement houses, houses for municipal, tourism, sports exhibition and large commercial activities, and houses for military uses.

Whirlpool China Co Ltd manufactures and markets washing machines and microwave ovens.

Hume Industries Bhd produces medium to high-end wooden furniture and focuses on woodworking and finishing of furniture, most of which is exported.

Nagawa Co. Ltd. manufactures, sells, and rents prefabricated offices and stores. The Company builds prefabricated storage sheds. Nagawa also sells construction machinery and construction materials.

Vatti Corporation Ltd. manufactures and markets household appliances. The Company's products include gas stoves, kitchen ventilators and water heater.

ES-CON JAPAN Ltd. plans and organizes apartment construction works in Osaka and Kyoto area.  The Company also provides real estate consulting services for land owners and developers.

Borosil Renewables Limited manufactures glass products. The Company offers industrial, pharmaceutical, and volumetric glassware products. Borosil Renewables offers bottles, burette, pipettes, flasks, condensers, ground joints, extractors, and other related products.

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)

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