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>After going ex-dividend in June, <a href="https://www.smartkarma.com/entities/water-oasis-group-ltd" target="_blank" data-smartkarma-citation="entities:17348:1" rel="noopener">Water Oasis (1161 HK)</a> corrected and has remained rangebound at the 1.35-1.45 HKD/levels due to negative sentiment on HK/China.</li>
<li>We expect FY23 results to be reported in late November/early December. We expect an increase of 19%/85%  in Revenue/PAT with a 16-cent dividend for FY23 (11.4% dividend yield).</li>
<li>Stock trades at 7.6x/6.2x PE FY23e/24e, a dividend yield of 11.4%/14% FY23e/24e with 25% of the market capitalization in cash. </li>
</ul>


After going ex-dividend in June, Water Oasis (1161 HK) corrected and has remained rangebound at the 1.35-1.45 HKD/levels due to negative sentiment on HK/China.
We expect FY23 results to be reported in late November/early December. We expect an increase of 19%/85%  in Revenue/PAT with a 16-cent dividend for FY23 (11.4% dividend yield).
Stock trades at 7.6x/6.2x PE FY23e/24e, a dividend yield of 11.4%/14% FY23e/24e with 25% of the market capitalization in cash. 


Water Oasis: FY23 Earnings a Preview, Trades at 11% Yield Post Correction

Global Healthcare Analyst

Tina Banerjee

<ul>
<li>
<a href="https://www.smartkarma.com/entities/ec-healthcare" target="_blank" data-smartkarma-citation="entities:22630:1" rel="noopener">EC Healthcare (2138 HK)</a> reported record high revenue of HK$3.9B in FY23 and started FY24 on a strong note, with Q1FY24 revenue increasing 23% YoY, driven by medical services segment.</li>
<li>Cost pressure is negatively impacting the bottom line. The company is reporting decelerating EBITDA and net profit margins since FY20. ROE deteriorated to 4.5% in FY23 from 33% in FY19.</li>
<li>The company is well-positioned to see turnaround in profitability with the resumption of Mainland China visitors in Hong Kong providing impetus to high margin earning aesthetic business and cost optimization.</li>
</ul>



EC Healthcare (2138 HK) reported record high revenue of HK$3.9B in FY23 and started FY24 on a strong note, with Q1FY24 revenue increasing 23% YoY, driven by medical services segment.
Cost pressure is negatively impacting the bottom line. The company is reporting decelerating EBITDA and net profit margins since FY20. ROE deteriorated to 4.5% in FY23 from 33% in FY19.
The company is well-positioned to see turnaround in profitability with the resumption of Mainland China visitors in Hong Kong providing impetus to high margin earning aesthetic business and cost optimization.


EC Healthcare (2138 HK): Surging Revenue; Poised for Profitability Improvement; Future Looks Bright

Perfect Medical Health / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/perfect-medical-health-management" target="_blank" data-smartkarma-citation="entities:3639:1" rel="noopener">Perfect Medical Health (1830 HK)</a> will report its H1 2024 results in late November 2023. We expect slow China growth to result in revenue/profit growth of 10%/15% YoY. </li>
<li>The company will continue to open outlets in HK, and the plan is to open ten by the end of FY24 (3-4 at the end of H1FY24e).  </li>
<li>The stock trades at 12.7x PE FY24e, with an 8.7% dividend yield and around 16% of the market capitalization in net cash and investments (~800 mn HKD). </li>
</ul>



Perfect Medical Health (1830 HK) will report its H1 2024 results in late November 2023. We expect slow China growth to result in revenue/profit growth of 10%/15% YoY. 
The company will continue to open outlets in HK, and the plan is to open ten by the end of FY24 (3-4 at the end of H1FY24e).  
The stock trades at 12.7x PE FY24e, with an 8.7% dividend yield and around 16% of the market capitalization in net cash and investments (~800 mn HKD). 


Perfect Medical : Previewing the H1 FY24, Soft China To Lessen Growth

<ul>
<li>We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety. </li>
<li>Our top picks are <a href="https://www.smartkarma.com/entities/perfect-medical-health-management" target="_blank" data-smartkarma-citation="entities:3639:1" rel="noopener">Perfect Medical Health (1830 HK)</a>, <a href="https://www.smartkarma.com/entities/water-oasis-group-ltd" target="_blank" data-smartkarma-citation="entities:17348:1" rel="noopener">Water Oasis (1161 HK)</a>, <a href="https://www.smartkarma.com/entities/taste-gourmet-group-ltd" target="_blank" data-smartkarma-citation="entities:27339:1" rel="noopener">Taste Gourmet (8371 HK)</a>, <a href="https://www.smartkarma.com/entities/uchi-technologies-bhd" target="_blank" data-smartkarma-citation="entities:10723:1" rel="noopener">Uchi Technologies (UCHI MK)</a>, and <a href="https://www.smartkarma.com/entities/the-keepers-holdings-inc" target="_blank" data-smartkarma-citation="entities:23003:1" rel="noopener">The Keepers Holdings (KEEPR PM)</a>.</li>
<li>We expand our list coverage into <a href="https://www.smartkarma.com/entities/multi-bintang-indonesia-pt" target="_blank" data-smartkarma-citation="entities:11651:1" rel="noopener">Multi Bintang Indonesia (MLBI IJ)</a>, <a href="https://www.smartkarma.com/entities/delta-djakarta-tbk-pt" target="_blank" data-smartkarma-citation="entities:5585:1" rel="noopener">Delta Djakarta (DLTA IJ)</a>, and <a href="https://www.smartkarma.com/entities/sheng-siong-group-ltd" target="_blank" data-smartkarma-citation="entities:6824:1" rel="noopener">Sheng Siong (SSG SP)</a> as quality high ROCE names worth looking at.</li>
</ul>


We compile our selection of small and mid-cap names with our desired characteristics of high dividend yields, value, and margin of safety. 
Our top picks are Perfect Medical Health (1830 HK), Water Oasis (1161 HK), Taste Gourmet (8371 HK), Uchi Technologies (UCHI MK), and The Keepers Holdings (KEEPR PM).
We expand our list coverage into Multi Bintang Indonesia (MLBI IJ), Delta Djakarta (DLTA IJ), and Sheng Siong (SSG SP) as quality high ROCE names worth looking at.


Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety - August 2023

<ul>
<li>
<a href="https://www.smartkarma.com/entities/perfect-medical-health-management" target="_blank" data-smartkarma-citation="entities:3639:1" rel="noopener">Perfect Medical Health's (1830 HK)</a> share price correction seems overdone. <a href="https://time.com/6283257/china-xbb-covid-outbreak/" target="_blank" rel="noopener">News that COVID cases are expected to rise to over 65 million a week by June</a> in China: the culprit.</li>
<li>The stock presents an excellent opportunity to invest with a 8.9%/11.8% FY23e/24e dividend yield and 20% of the market capitalization in cash. Such excessive pessimism in this name is unwarranted.</li>
<li>Catalysts for the stock would be the FY23 March-end results to be declared on June 28th, 2023. </li>
</ul>



Perfect Medical Health's (1830 HK) share price correction seems overdone. News that COVID cases are expected to rise to over 65 million a week by June in China: the culprit.
The stock presents an excellent opportunity to invest with a 8.9%/11.8% FY23e/24e dividend yield and 20% of the market capitalization in cash. Such excessive pessimism in this name is unwarranted.
Catalysts for the stock would be the FY23 March-end results to be declared on June 28th, 2023. 


Perfect Medical: The Perfect Opportunity to Add

Hong Kong

Perfect Medical Health Management (previously Perfect Shape Medical Limited) offers slimming and beauty treatments. The Company provides fat softens and dissolves services, laser freckle services, and other services. Perfect Shape Medical offers services in China.

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Perfect Medical Health (1830 HK)

Water Oasis: FY23 Earnings a Preview, Trades at 11% Yield Post Correction

Water Oasis is a cheap beauty play in HK. Post its recent correction, it trades at 7.6x/6.2x PE FY23e/24e, a dividend yield of 11.4%/14% FY23e/24e...

Sameer Taneja

EC Healthcare (2138 HK): Surging Revenue; Poised for Profitability Improvement; Future Looks Bright

Despite consistent revenue growth, EC Healthcare is seeing declining profitability due to cost pressure. Turnaround is expected with the return of...

Tina Banerjee

Perfect Medical : Previewing the H1 FY24, Soft China To Lessen Growth

Perfect Medical trades at 12.7x PE FY24e, with an 8.7% dividend yield and around 16% of the market capitalization in net cash and investments (~800...

Sameer Taneja

Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety - August 2023

We cover our top picks in our high ROCE coverage list. Perfect Medical, Taste Gourmet, Water Oasis, Keepers Holdings, Uchi Technologies, Multi...

Sameer Taneja

Perfect Medical: The Perfect Opportunity to Add

Perfect Medical presents an excellent opportunity for structural growth in the beauty and aesthetics space with an 8.9%/11.8% FY23e/24e dividend...

Sameer Taneja

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52-week Range

Market Cap (USDm)

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Water Oasis: FY23 Earnings a Preview, Trades at 11% Yield Post Correction

Water Oasis is a cheap beauty play in HK. Post its recent correction, it trades at 7.6x/6.2x PE FY23e/24e, a dividend yield of 11.4%/14% FY23e/24e...

Sameer Taneja

EC Healthcare (2138 HK): Surging Revenue; Poised for Profitability Improvement; Future Looks Bright

Despite consistent revenue growth, ​EC Healthcare is seeing declining profitability due to cost pressure. Turnaround is expected with the return of...

Tina Banerjee

Perfect Medical : Previewing the H1 FY24, Soft China To Lessen Growth

Perfect Medical trades at 12.7x PE FY24e, with an 8.7% dividend yield and around 16% of the market capitalization in net cash and investments (~800...

Sameer Taneja

Shortlist Of High Conviction Ideas: Income, Value, and Margin of Safety - August 2023

We cover our top picks in our high ROCE coverage list. Perfect Medical, Taste Gourmet, Water Oasis, Keepers Holdings, Uchi Technologies, Multi...

Sameer Taneja

Perfect Medical: The Perfect Opportunity to Add

Perfect Medical presents an excellent opportunity for structural growth in the beauty and aesthetics space with an 8.9%/11.8% FY23e/24e dividend...

Sameer Taneja

Despite consistent revenue growth, EC Healthcare is seeing declining profitability due to cost pressure. Turnaround is expected with the return of...