Quality-first, Business-perspective Strategy, Urbem (HK) Limited

Steven Chen

Quality-first, Business-perspective Strategy

Equity Bottom-Up

Integrated Diagnostics Holdings / Equity Bottom-Up

<ul>
<li>One of the most effective alpha-generating approaches is to look at places that very few of the others are looking at;</li>
<li>In this episode, let's take a glance at a rapidly-developing and investable story from MENA;</li>
<li>The business generates high returns on capital with a massive growth runway, has a founder-led management team, and is reasonably priced, in my view.</li>
</ul>


One of the most effective alpha-generating approaches is to look at places that very few of the others are looking at;
In this episode, let's take a glance at a rapidly-developing and investable story from MENA;
The business generates high returns on capital with a massive growth runway, has a founder-led management team, and is reasonably priced, in my view.


Integrated Diagnostics: Another Under-The-Radar Story

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>In early Feb2020, the #1 shareholder of HK-based elderly home care provider <a href="https://www.smartkarma.com/entities/pine-care-group-ltd" target="_blank" data-smartkarma-citation="entities:28845:1" rel="noopener">Pine Care Group (1989 HK)</a> sold a 52% stake at HK$1.647, keeping 14.99%. That triggered an Unconditional MGO. </li>
<li>In Aug2022, much of the shareholder consortium which bought in 2020 agreed to sell 56.15% at HK$0.89/share to local privately-held developer Chinachem. That will trigger another Unconditional MGO.</li>
<li>The business has suffered under covid, but it is not clear why the business would be better now. Revenues will spike when Causeway Bay opens, but.... Sell. </li>
</ul>


In early Feb2020, the #1 shareholder of HK-based elderly home care provider Pine Care Group (1989 HK) sold a 52% stake at HK$1.647, keeping 14.99%. That triggered an Unconditional MGO. 
In Aug2022, much of the shareholder consortium which bought in 2020 agreed to sell 56.15% at HK$0.89/share to local privately-held developer Chinachem. That will trigger another Unconditional MGO.
The business has suffered under covid, but it is not clear why the business would be better now. Revenues will spike when Causeway Bay opens, but.... Sell. 


Pine Care Group - Another MGO, Still Wrong Price Making One Wonder...

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>Although Pine Care’s revenue kept growing in recent years, its net loss widened, with declining profitability. Single customer risk, high debt and cash flow pressure are also hidden dangers.</li>
<li>The elderly care service is characterized by high investment, long payback period, high risk, low profit margin/rate of return, strong public welfare attributes, etc. So, Pine Care’s outlook is challenging.</li>
<li>We recommend investors to view Chinachem’s acquisition of Pine Care rationally, unless Pine Care could demonstrate some positive signals in Mainland business, which is the key for future valuation expansion.  </li>
</ul>


Although Pine Care’s revenue kept growing in recent years, its net loss widened, with declining profitability. Single customer risk, high debt and cash flow pressure are also hidden dangers.
The elderly care service is characterized by high investment, long payback period, high risk, low profit margin/rate of return, strong public welfare attributes, etc. So, Pine Care’s outlook is challenging.
We recommend investors to view Chinachem’s acquisition of Pine Care rationally, unless Pine Care could demonstrate some positive signals in Mainland business, which is the key for future valuation expansion.  


Pine Care Group (1989.HK) - Hard to Make Profits Due to Industry Characteristics; Here Is What to Do

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>Hong Kong’s leading property developer, Chinachem Group agreed to acquire a 56.15% stake in <a href="https://www.smartkarma.com/entities/pine-care-group-ltd" target="_blank" data-smartkarma-citation="entities:28845:1" rel="noopener">Pine Care Group (1989 HK)</a> for HKD451.2 million ($57.5 million) from its controlling shareholders.</li>
<li>Post-Acquisition, Chinachem will launch an unconditional mandatory offer for the remaining shares, which it does not hold at HKD0.89 per share, same as the purchase price.</li>
<li>Considering delisting risk, limited upside potential of the shares after a huge run-up, and muted growth outlook of the company, investors should tender their holdings.  </li>
</ul>


Hong Kong’s leading property developer, Chinachem Group agreed to acquire a 56.15% stake in Pine Care Group (1989 HK) for HKD451.2 million ($57.5 million) from its controlling shareholders.
Post-Acquisition, Chinachem will launch an unconditional mandatory offer for the remaining shares, which it does not hold at HKD0.89 per share, same as the purchase price.
Considering delisting risk, limited upside potential of the shares after a huge run-up, and muted growth outlook of the company, investors should tender their holdings.  


Pine Care Group (1989 HK): Chinachem Takeover Offers a Good Exit Opportunity for Investors

Smartkarma Research Team, Smartkarma

Smartkarma Research

Smartkarma Research Team

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Kato Hong Kong Holdings / Equity Bottom-Up

<p>For our next Webinar, we are happy to welcome Insight Provider <a href="https://www.smartkarma.com/profiles/steven-chen" target="_blank" data-smartkarma-citation="accounts:10934" rel="noopener">Steven Chen</a> , who will break down his quality-focused, business-perspective investing strategy and then dig deeper into some under-appreciated multi-bag picks that his strategy brings forth in China/Hong Kong as well as across Asia-Pacific.</p>
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<h3>The webinar will be hosted on Wednesday, 7 July 2021, 17:00 SGT/HKT.</h3>
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<h2><a href="https://share.hsforms.com/1H9pFZOB-RF2J00kbvMmxcw2c5gj?zoom_webinar_id=87808685654" target="_blank" rel="noopener">Register for the Webinar here</a></h2>
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<p>Steven Chen is a quality-focused, business-perspective investor with bottom-up opportunistic approaches, an ex-hedge fund analyst on Wall Street, a serial entrepreneur, a strategic advisor, a computer scientist, a free-market capitalist, and a global citizen. He is the founder of Urbem Capital.</p>
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For our next Webinar, we are happy to welcome Insight Provider Steven Chen , who will break down his quality-focused, business-perspective investing strategy and then dig deeper into some under-appreciated multi-bag picks that his strategy brings forth in China/Hong Kong as well as across Asia-Pacific.


The webinar will be hosted on Wednesday, 7 July 2021, 17:00 SGT/HKT.





Register for the Webinar here


Steven Chen is a quality-focused, business-perspective investor with bottom-up opportunistic approaches, an ex-hedge fund analyst on Wall Street, a serial entrepreneur, a strategic advisor, a computer scientist, a free-market capitalist, and a global citizen. He is the founder of Urbem Capital.


Smartkarma Webinar | Top Picks in China / Hong Kong

Hong Kong

Kato Hong Kong Holdings Limited provides health care facilities.

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Kato Hong Kong Holdings (2189 HK)

Integrated Diagnostics: Another Under-The-Radar Story

This company generates high returns on capital with a massive growth runway, has a founder-led management team, and is reasonably priced.

Steven Chen

Pine Care Group - Another MGO, Still Wrong Price Making One Wonder...

Pine Care Group is undergoing its second change of ownership/control in 3yrs as the Tang family sells out to Chinachem (the Wang family). It's...

Travis Lundy

Pine Care Group (1989.HK) - Hard to Make Profits Due to Industry Characteristics; Here Is What to Do

Pine Care is hard to make expected profits due to elderly care industry characteristics in China, with challenging outlook. We advise investors to...

Xinyao (Criss) Wang

Pine Care Group (1989 HK): Chinachem Takeover Offers a Good Exit Opportunity for Investors

Pine Care shareholders can tender their holdings for a guaranteed return, due to the muted growth outlook of the company amid macro headwinds and...

Tina Banerjee

Smartkarma Webinar | Top Picks in China / Hong Kong

On 7 July, 5pm SGT, join us and Steven Chen, who will break down his quality-focused, business-perspective investing strategy and then dig deeper...

Smartkarma Research

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