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

Equity Bottom-Up

<p>Last Friday, the company announced a profit alert with revenue grew 60% and NPAT RMB 1.8 billion or 163% higher YoY citing improvement in operating margin. This could come not only from a discipline operating expenses management but also an improved product mix; margin from online sales is higher than from retail. </p><p>There will be some sellers today to book some profit from yesterday's gain but long-term investors should hold on to this as the nationalistic pattern may last longer than the first half of 2021 especially when the US is still making taking a hard stand on the Xinjiang issue, now moving from the cotton to solar panel, therefore, driving a higher revenue to <a href="https://www.smartkarma.com/entities/li-ning-co-ltd" target="_blank" data-smartkarma-citation="entities:6047:1" rel="noopener">Li Ning Co Ltd (2331 HK)</a> .</p><div class="content-highlight"><p>Li Ning's valuation and share price may sound expensive but the appeal of an online focus business with higher profitability and leaner capital structure compared to its peers warrant some premium. </p></div>

Last Friday, the company announced a profit alert with revenue grew 60% and NPAT RMB 1.8 billion or 163% higher YoY citing improvement in operating margin. This could come not only from a discipline operating expenses management but also an improved product mix; margin from online sales is higher than from retail. There will be some sellers today to book some profit from yesterday's gain but long-term investors should hold on to this as the nationalistic pattern may last longer than the first half of 2021 especially when the US is still making taking a hard stand on the Xinjiang issue, now moving from the cotton to solar panel, therefore, driving a higher revenue to Li Ning Co Ltd (2331 HK) .Li Ning's valuation and share price may sound expensive but the appeal of an online focus business with higher profitability and leaner capital structure compared to its peers warrant some premium. 

HK/China Equity Long-Short

Osbert Tang, CFA

<p>We view the FY21 (Year end Mar) result of <a href="https://www.smartkarma.com/entities/china-dongxiang-group-co" target="_blank" data-smartkarma-citation="entities:1068:1" rel="noopener">China Dongxiang Group Co (3818 HK)</a> positively, despite a dividend payout ratio which is lower than expected. As we wrote in <a href="https://www.smartkarma.com/insights/china-dongxiang-3818-hk-what-can-we-expect-from-the-final-result" target="_blank" data-smartkarma-citation="insights:53174" rel="noopener">China Dongxiang (3818 HK): What Can We Expect from the Final Result?</a>, its sportswear business in China has recorded good turnaround, with gross profit soared 46.3% YoY and 27.9% HoH. Meanwhile, its investment business also registered an income of Rmb2.1bn for full-year, or Rmb759.7m for 2H21, up 88.7% YoY.</p><p>Going forward, we expect CNDX's strategy to bring about further improvement in its sportswear business in China. It has also disclosed more names of listed equity that it hold both directly and indirectly and they are all of good quality, in our view. The stock is trading on 47% discount to book value which made up of 14% of net cash, 73% of investment portfolio and 13% of other net assets. Frankly, we think such valuation is too depressed and believe there is more upside room even after a 52% rally in share price YTD.</p>

We view the FY21 (Year end Mar) result of China Dongxiang Group Co (3818 HK) positively, despite a dividend payout ratio which is lower than expected. As we wrote in China Dongxiang (3818 HK): What Can We Expect from the Final Result?, its sportswear business in China has recorded good turnaround, with gross profit soared 46.3% YoY and 27.9% HoH. Meanwhile, its investment business also registered an income of Rmb2.1bn for full-year, or Rmb759.7m for 2H21, up 88.7% YoY.Going forward, we expect CNDX's strategy to bring about further improvement in its sportswear business in China. It has also disclosed more names of listed equity that it hold both directly and indirectly and they are all of good quality, in our view. The stock is trading on 47% discount to book value which made up of 14% of net cash, 73% of investment portfolio and 13% of other net assets. Frankly, we think such valuation is too depressed and believe there is more upside room even after a 52% rally in share price YTD.

China Dongxiang (3818 HK): Lower-Than-Expected Dividends but Still A Marvelous FY21

Overseas Chinese Equities, Aequitas Research

Ming Lu

Overseas Chinese Equities

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.

<ul>
<li>The main competitor, Huawei Group, decided to sell one of its two smartphone brands.</li>
<li>Xiaomi took all the smartphone market share that Huawei Group left behind.</li>
<li>Xiaomi’s revenue growth rate jumped to 35% yoy in 3Q20 versus 3% yoy in 2Q20.</li>
<li>However, so far, we believe the company is slightly overvalued.</li>
</ul>


The main competitor, Huawei Group, decided to sell one of its two smartphone brands.
Xiaomi took all the smartphone market share that Huawei Group left behind.
Xiaomi’s revenue growth rate jumped to 35% yoy in 3Q20 versus 3% yoy in 2Q20.
However, so far, we believe the company is slightly overvalued.


Xiaomi (1810 HK): Taking Advantage of Huawei’s Sale of Smartphone Brand, But Overvalued

APAC IPOs & Placements

Zhen Zhou, Toh

Equity Capital Markets

<p><a href="https://www.smartkarma.com/entities/vesync" target="_blank" data-smartkarma-citation="entities:31067:1" rel="noopener">Vesync (2148 HK)</a> is looking to raise up to US$200mn in its Hong Kong IPO.</p><p>The company sells small home appliances mainly through Amazon’s e-commerce marketplace and its products range from home environment appliances to health monitoring devices. The company derived most of its revenue from North America</p><p>Overall, growth of Vesync has been strong as the company has adapted well by selling products that have been in demand during the California fires in 2018 - 2019 and COVID-19. Its vendor central program allowed the company to scale up quickly and sell in bulk to Amazon without having to incur fulfilment costs unlike products sold via seller central program.</p><p>In this note, we will look at the company’s business, revenue drivers, deal dynamics, assumptions, and share our thoughts on valuation.</p>

Vesync (2148 HK) is looking to raise up to US$200mn in its Hong Kong IPO.The company sells small home appliances mainly through Amazon’s e-commerce marketplace and its products range from home environment appliances to health monitoring devices. The company derived most of its revenue from North AmericaOverall, growth of Vesync has been strong as the company has adapted well by selling products that have been in demand during the California fires in 2018 - 2019 and COVID-19. Its vendor central program allowed the company to scale up quickly and sell in bulk to Amazon without having to incur fulfilment costs unlike products sold via seller central program.In this note, we will look at the company’s business, revenue drivers, deal dynamics, assumptions, and share our thoughts on valuation.

Vesync IPO - The Tale of Valuation Dichotomy

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

JS Global Lifestyle   / Equity Capital Markets

<div>
<p><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> along with CDH is looking to raise upto US$167m in a mix of a top-up and a sell down by CDH. </p>
<p>The company was listed in Dec 2019 and my colleague, <a href="https://www.smartkarma.com/profiles/zhen-zhou-toh" target="_blank" data-smartkarma-citation="accounts:673" rel="noopener">Zhen Zhou, Toh,</a> covered the IPO extensively, links to his insight are below. The lock-up on the company and its shareholders expired in Jun 2020 and was covered in <a href="https://www.smartkarma.com/insights/js-global-lifestyle-js-lock-up-expiry-potential-sellers-at-a-fair-valuation" target="_blank" rel="noopener">JS Global Lifestyle (JS 环球生活) Lock-Up Expiry - Potential Sellers at a Fair Valuation.</a></p>
<p>With CDH starting its exit, there will be a whole lot more shares to come. In this insight, I'll run the deal through our ECM framework and talk about the deal dynamics.</p>
</div><p>Links to our previous coverage:</p><div><ul style="list-style-type: disc;">
<li>
<a href="https://www.smartkarma.com/insights/js-global-lifestyle-js-early-thoughts-declaring-us-470m-dividend-before-ipo" target="_blank" data-smartkarma-citation="insights:30871" rel="noopener">JS Global (JS 环球生活) Early Thoughts - Declaring US$470m Dividend Before IPO</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/js-global-lifestyle-js-quick-note-questions-about-corporate-structure-and-reorganization" target="_blank" data-smartkarma-citation="insights:30952" rel="noopener">JS Global (JS 环球生活) Quick Note - Questions About Corporate Structure and Reorganization</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/js-global-lifestyle-js-pre-ipo-review-sometimes-two-negatives-don-t-make-a-positive" target="_blank" data-smartkarma-citation="insights:32701" rel="noopener">JS Global (JS 环球生活) Pre-IPO Review - Sometimes, Two Negatives Don't Make a Positive</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/js-global-js-phip-updates-thoughts-on-valuation-paid-a-premium-for-a-good-brand" target="_blank" data-smartkarma-citation="insights:32870" rel="noopener">JS Global (JS 环球生活) PHIP Updates &amp; Thoughts on Valuation - Paid a Premium for a Good Brand</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/js-global-js-ipo-review-limited-upside-from-the-bottom-end" target="_blank" data-smartkarma-citation="insights:33293" rel="noopener">JS Global (JS 环球生活) IPO Review - Limited Upside from the Bottom-End</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/js-global-js-updates-before-ipo-relaunch-going-at-it-again" target="_blank" data-smartkarma-citation="insights:35102" rel="noopener">JS Global (JS 环球生活) Updates Before IPO Relaunch - Going at It Again</a> </li>
<li>
<a href="https://www.smartkarma.com/insights/js-global-js-trading-low-adjusted-free-float-tightly-held-by-top-shareholders" target="_blank" data-smartkarma-citation="insights:35290" rel="noopener">JS Global (JS 环球生活) Trading - Low Adjusted Free-Float Tightly Held by Top Shareholders</a> </li>
</ul></div><div><p></p></div>


JS Global Lifestyle (1691 HK) along with CDH is looking to raise upto US$167m in a mix of a top-up and a sell down by CDH. 
The company was listed in Dec 2019 and my colleague, Zhen Zhou, Toh, covered the IPO extensively, links to his insight are below. The lock-up on the company and its shareholders expired in Jun 2020 and was covered in JS Global Lifestyle (JS 环球生活) Lock-Up Expiry - Potential Sellers at a Fair Valuation.
With CDH starting its exit, there will be a whole lot more shares to come. In this insight, I'll run the deal through our ECM framework and talk about the deal dynamics.
Links to our previous coverage:

JS Global (JS 环球生活) Early Thoughts - Declaring US$470m Dividend Before IPO 

JS Global (JS 环球生活) Quick Note - Questions About Corporate Structure and Reorganization 

JS Global (JS 环球生活) Pre-IPO Review - Sometimes, Two Negatives Don't Make a Positive 

JS Global (JS 环球生活) PHIP Updates &amp; Thoughts on Valuation - Paid a Premium for a Good Brand 

JS Global (JS 环球生活) IPO Review - Limited Upside from the Bottom-End 

JS Global (JS 环球生活) Updates Before IPO Relaunch - Going at It Again 

JS Global (JS 环球生活) Trading - Low Adjusted Free-Float Tightly Held by Top Shareholders 


JS Global Lifestyle (JS 环球生活) - Big Large Share Price Run-Up, Large Sell Down Overhang

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)

Li Ning (2331): Marching On

Li Ning's valuation and share price may sound expensive but the appeal of an online focus business with higher profitability and leaner capital...

Henry Soediarko

China Dongxiang (3818 HK): Lower-Than-Expected Dividends but Still A Marvelous FY21

China Dongxiang has delivered impressive FY21 result with good recovery in sportswear and surge in investment income. At 47% discount to book...

Osbert Tang, CFA

Xiaomi (1810 HK): Taking Advantage of Huawei’s Sale of Smartphone Brand, But Overvalued

The main competitor, Huawei Group, decided to sell one of its two smartphone brands. Xiaomi took all the smartphone market share that Huawei Group...

Ming Lu

Vesync IPO - The Tale of Valuation Dichotomy

Vesync sells small home appliances mainly through Amazon’s e-commerce marketplace and its products range from home environment appliances to health...

Zhen Zhou, Toh

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Li Ning (2331): Marching On

Li Ning's valuation and share price may sound expensive but the appeal of an online focus business with higher profitability and leaner capital...

Henry Soediarko

China Dongxiang (3818 HK): Lower-Than-Expected Dividends but Still A Marvelous FY21

China Dongxiang has delivered impressive FY21 result with good recovery in sportswear and surge in investment income. At 47% discount to book...

Osbert Tang, CFA

Xiaomi (1810 HK): Taking Advantage of Huawei’s Sale of Smartphone Brand, But Overvalued

The main competitor, Huawei Group, decided to sell one of its two smartphone brands. Xiaomi took all the smartphone market share that Huawei Group...

Ming Lu

Vesync IPO - The Tale of Valuation Dichotomy

Vesync sells small home appliances mainly through Amazon’s e-commerce marketplace and its products range from home environment appliances to health...

Zhen Zhou, Toh

JS Global Lifestyle (JS 环球生活) - Big Large Share Price Run-Up, Large Sell Down Overhang

JS Global Lifestyle (JS 环球生活) Lock-Up Expiry - Potential Sellers at a Fair Valuation JS Global Lifestyle (1691 HK)'s IPO lock-up expires on the...

Sumeet Singh