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>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

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'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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/dickson-concepts-intl-ltd" target="_blank" data-smartkarma-citation="entities:5052:1" rel="noopener">Dickson Concepts Intl (113 HK)</a>, an HK distributor of luxury goods, is a classic example of a Graham net-net with a &gt;40% discount to NCAV (Net Current Asset Value). </li>
<li>The company has 4.7 bn HKD of cash against total liabilities of 2.3 bn HKD (on a market cap of 1.6 bn HKD), thus representing deep value. </li>
<li>With an economic environment in HK for retail sales improving + an existing 8% dividend yield, we could make a case for higher dividend payments.</li>
</ul>



Dickson Concepts Intl (113 HK), an HK distributor of luxury goods, is a classic example of a Graham net-net with a &gt;40% discount to NCAV (Net Current Asset Value). 
The company has 4.7 bn HKD of cash against total liabilities of 2.3 bn HKD (on a market cap of 1.6 bn HKD), thus representing deep value. 
With an economic environment in HK for retail sales improving + an existing 8% dividend yield, we could make a case for higher dividend payments.


Dickson Concepts 113 HK: Straight From The Ben Graham Stable, >40% Discount to NCAV

<ul>
<li>Over the past 12 months, we have written insights on 14 stocks in the small/mid-cap space with high dividend yields, inexpensive valuations, and a great margin of safety. </li>
<li>We re-examine these to shortlist 3-4 names of our highest conviction amidst the current macroeconomic climate.</li>
<li>Our high conviction shortlist includes <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/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/the-keepers-holdings-inc" target="_blank" data-smartkarma-citation="entities:23003:1" rel="noopener">The Keepers Holdings (KEEPR PM)</a>, and <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>.</li>
</ul>


Over the past 12 months, we have written insights on 14 stocks in the small/mid-cap space with high dividend yields, inexpensive valuations, and a great margin of safety. 
We re-examine these to shortlist 3-4 names of our highest conviction amidst the current macroeconomic climate.
Our high conviction shortlist includes Water Oasis (1161 HK), Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), and Taste Gourmet (8371 HK).


Shortlist of High Conviction Ideas - Income, Value, Margin of Safety

<ul>
<li>A correction in <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 recently has led to it trading at a decent multiple of 15.2x/11.6x FY23e/24e PE(x) with a 6.9%/9.1% FY23e/24e dividend yield. </li>
<li>We estimate the lockdowns in China from Oct-Dec last year will impact the H2 FY23 result, leading to softer revenue growth of 4.8% for FY23 (profit 11% YoY). </li>
<li>We are optimistic about China re-opening and cross-border travel and believe that &gt;20% revenue growth can materialize in FY24, led by a recovery in China/HK revenue. </li>
</ul>


A correction in Perfect Medical Health's (1830 HK) share price recently has led to it trading at a decent multiple of 15.2x/11.6x FY23e/24e PE(x) with a 6.9%/9.1% FY23e/24e dividend yield. 
We estimate the lockdowns in China from Oct-Dec last year will impact the H2 FY23 result, leading to softer revenue growth of 4.8% for FY23 (profit 11% YoY). 
We are optimistic about China re-opening and cross-border travel and believe that &gt;20% revenue growth can materialize in FY24, led by a recovery in China/HK revenue. 


Perfect Medical: Calm Start to the Year, Correction Provides Good Entry Point

Hong Kong

The Cross-Harbour (Holdings) Limited, through its subsidiaries, operates a driver training center, tunnel, and electronic tolls. The Company also provides treasury services.

Hope Education Group Co, Ltd. offers educational services. The Company provides educational training, knowledge point sharing, activities arrangement, and other services. Hope Education Group offers its services throughout China.

Water Oasis Group Limited distributes exclusively ~H2O+ brand skin-care products in Hong Kong, Macau, Taiwan and China. The Company also operates spa centers under the Oasis Spa, Oasis Beauty, and Oasis Beauty Homme brand names.

Anxian Yuan China Holdings Limited is a holding company. The Company, through its subsidiaries, operates cemetary business.

Green International Holdings Limited manufactures and trades toys and recreational products. The Company's product categories include hard and electronic toys for children, educational and recreational, soft toys, and sports products.

SDM Group Holdings Limited, through its subsidiaries, operates dance institutions for children in Hong Kong. The Company's schools offer courses in jazz, ballet, hip-hop and latin dance.

Steve Leung Design Group Limited provides interior designing services. The Company offers apartments, restaurants, and hotels interior designing services . Steve Leung Design Group provides services worldwide.

Sun International Group Limited offers equine services. The Company provides horse breeding, horse trading, horse raising, and other services. Sun International Group also operates futures trading, enterprise placement, financial credit financing, asset management, and other businesses.

Regal Hotels International Holdings Limited owns and operates hotels.  The Company also manages and invests in real estate properties as well as invests in and trades financial instruments and marketable securities.  In addition, Regal hotel operates brewery, operates restaurants, and provides travel and florist and wedding services.

Cafe De Coral Holdings Limited, through its subsidiaries, operates quick service restaurants, fast casual dining, institutional catering and specialty restaurant chains, and food manufacturing business.

Carriage Services, Inc. operates funeral homes and cemeteries in the United States.  The Company provides a complete range of services relating to funerals, burials, and cremations.  Carriage also sells related products and merchandise such as caskets, burial vaults, garments, and memorials.

Shanghai Xin Nanyang Co., Ltd., through its subsidiaries, manufactures communication products and industrial equipment, develops cable TV network, security trading, and communication systems, provides network integration, education, and precision processing services.

China Kepei Education Group Limited provides educational services. The Company offers high-quality profession-oriented education services and other services. China Kepei Education Group provides services in China.

Chegg, Inc. provides online educational platform. The Company offers homework help, course selection, note taking, manuals, and textbook rentals services. Chegg serves customers throughout the United States.

American Public Education Inc. provides online postsecondary education directed at the needs of the military and public service communities.  The Company offers a wide range of degree programs and certificate programs including national security, military studies, intelligence, homeland security, criminal justice, technology, business administration and liberal arts.

PIA CORPORATION provides event ticketing services in Japan.  The Company sells tickets for concerts, sporting contests, and other events of entertainment value through telephone operators, mobile phone services, and a network of ticket stores.  Pia also operates in entertainment publishing and information distribution services.

Nagase Brothers Inc. operates cram schools mainly in Tokyo metropolitan area. The Company offers educational services for elementary, junior high, and high school students.  Nagase Brothers also offers educational services via satellite.

JP-HOLDINGS, INC. is a Japan-based company that provides child-care centers. The Company provides food catering services for child-care centers. JP-HOLDINGS also offers English language Classes and Gymnastics Classes

AcadeMedia AB provides educational services. The Company offers pre-school, elementary, secondary, vocational, adult education, comprehensive lesson plans, skills training, and professional rehabilitation services. AcadeMedia operates throughout Sweden.

Propel Funeral Partners Limited provides funeral services. The Company owns and operates funeral homes, cemeteries, crematoria, and related assets, as well as offers funeral, cremation, burial, and mortuary services. Propel Funeral Partners serves individuals and families in Australia and New Zealand.

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)

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

Dickson Concepts 113 HK: Straight From The Ben Graham Stable, >40% Discount to NCAV

Dickson Concepts Intl (113 HK), an HK distributor of luxury goods, is a classic example of a Graham net-net with a >40% discount to NCAV (Net...

Sameer Taneja

Shortlist of High Conviction Ideas - Income, Value, Margin of Safety

We like Water Oasis (1161 HK), Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), and Taste Gourmet (8371 HK) as the businesses are...

Sameer Taneja

Perfect Medical: Calm Start to the Year, Correction Provides Good Entry Point

A correction in Perfect Medical Health's (1830 HK) share price recently has led to it trading at a decent multiple of 15.2x/11.6x FY23e/24e PE(x)...

Sameer Taneja

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