Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/oriental-watch-holdings" target="_blank" data-smartkarma-citation="entities:19950:1" rel="noopener">Oriental Watch (398 HK)</a>  has begun Q4 2024 slowly, with its SSSG dropping by double-digit levels in all its major markets (HK/China and Macau).</li>
<li>As the year almost draws to a close, we expect profits to drop 10-15% YoY for FY24 and the company to pay out 100%, resulting in a 14% dividend yield.</li>
<li>The company also has 1.2 bn HKD of net cash, representing 70% of its market capitalization. Additionally, it has 700 mn HKD of investment property. </li>
</ul>



Oriental Watch (398 HK)  has begun Q4 2024 slowly, with its SSSG dropping by double-digit levels in all its major markets (HK/China and Macau).
As the year almost draws to a close, we expect profits to drop 10-15% YoY for FY24 and the company to pay out 100%, resulting in a 14% dividend yield.
The company also has 1.2 bn HKD of net cash, representing 70% of its market capitalization. Additionally, it has 700 mn HKD of investment property. 


Oriental Watch 398 HK: Slow 4Q FY24, Resting On A 14% Yield, With 70% of Mkt Cap in Cash

Value Investing in Asia, Oriental Value

Oriental Value

Value Investing in Asia

<ul><li>Oriental Watch is a prominent luxury watch retailer in the Greater China region.</li><li>While the company offers various brands, the majority of its sales, over 80%, come from its core brands, particularly Rolex and Tudor, a sister brand of Rolex.</li><li>Over the past two years, Oriental Watch has benefited greatly from the strong popularity of Rolex watches and has rewarded its shareholders with a dividend payout of over 100%.</li></ul>

Oriental Watch is a prominent luxury watch retailer in the Greater China region.While the company offers various brands, the majority of its sales, over 80%, come from its core brands, particularly Rolex and Tudor, a sister brand of Rolex.Over the past two years, Oriental Watch has benefited greatly from the strong popularity of Rolex watches and has rewarded its shareholders with a dividend payout of over 100%.

<ul>
<li>We remain cautious on <a href="https://www.smartkarma.com/entities/oriental-watch-holdings" target="_blank" data-smartkarma-citation="entities:19950:1" rel="noopener">Oriental Watch (398 HK)</a> despite the recovery in sales in June this year. Wealth destruction in financial markets could impact sales in the short term.</li>
<li>Having said that, the stock is extremely cheap at 6.7x FY23 earnings (-32% YoY from FY22), with more than one bn HKD in cash (60% of market capitalization). </li>
<li>With a generous payout ratio of &gt;100%, the stock trades at &gt;17% yield. We believe the company will dip into cash reserves to maintain a high yield.</li>
</ul>


We remain cautious on Oriental Watch (398 HK) despite the recovery in sales in June this year. Wealth destruction in financial markets could impact sales in the short term.
Having said that, the stock is extremely cheap at 6.7x FY23 earnings (-32% YoY from FY22), with more than one bn HKD in cash (60% of market capitalization). 
With a generous payout ratio of &gt;100%, the stock trades at &gt;17% yield. We believe the company will dip into cash reserves to maintain a high yield.


Oriental Watch: Trading at 17% Yield, 60% Mkt Cap in Cash

<ul>
<li>
<a href="https://www.smartkarma.com/entities/oriental-watch-holdings" target="_blank" data-smartkarma-citation="entities:19950:1" rel="noopener">Oriental Watch (398 HK)</a> profit alert for &gt;350 mn HKD affirms our conviction on the increasing dividend (74 HKD cents for FY22, implying a 15.7% dividend yield). </li>
<li>Lockdowns in China (accounting for 67% of the revenue) cast doubt around how H1 2023 will shape up. </li>
<li>With cash &gt; 50% of market capitalization, we remain positive on the company maintaining its high dividend payout for FY23 despite weakness in H1. </li>
</ul>



Oriental Watch (398 HK) profit alert for &gt;350 mn HKD affirms our conviction on the increasing dividend (74 HKD cents for FY22, implying a 15.7% dividend yield). 
Lockdowns in China (accounting for 67% of the revenue) cast doubt around how H1 2023 will shape up. 
With cash &gt; 50% of market capitalization, we remain positive on the company maintaining its high dividend payout for FY23 despite weakness in H1. 


Oriental Watch: Good Results in the Bag, Cautious H1 2023

<ul>
<li>
<a href="https://www.smartkarma.com/entities/oriental-watch-holdings" target="_blank" data-smartkarma-citation="entities:19950:1" rel="noopener">Oriental Watch (398 HK)</a>  went ex-dividend on the 4th of January and has settled at an appetizing valuation of 6.8x PE with 60% of the market cap in cash.</li>
<li>The market post-golden week and into the new year has been tepid.</li>
<li>We expect the company to continue paying out 100% of its profits as dividends, based on which the dividend yield is close to 14% at the current share price.</li>
</ul>



Oriental Watch (398 HK)  went ex-dividend on the 4th of January and has settled at an appetizing valuation of 6.8x PE with 60% of the market cap in cash.
The market post-golden week and into the new year has been tepid.
We expect the company to continue paying out 100% of its profits as dividends, based on which the dividend yield is close to 14% at the current share price.


Oriental Watch (398 HK): Ex-Dividend, Cash Levels To Mkt Cap at 60%, 6.8x PE, 14% Dividend Yield

Hong Kong

Oriental Watch Holdings Limited, through its subsidiaries, trades watches and invests in properties.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Oriental Watch (398 HK)