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/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

Perfect Medical Health / Equity Bottom-Up

<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

<ul>
<li>China ( &gt;20% of revenue ) changing its stance on COVID provides <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> with an opportunity to crystallize its expansion plans there. </li>
<li>The border reopening between HK/China will provide a boost to its HK operations (&gt;70% of revenue). The second half of H1 2023 results reflect an improving revenue trend for HK.</li>
<li>The stock trades at 16x/11x FY23e/24e with ~15% of the market cap in cash and a dividend yield of 6.5%/9.5% FY23e/24e (based on ~100% payout ratio). </li>
</ul>


China ( &gt;20% of revenue ) changing its stance on COVID provides Perfect Medical Health (1830 HK) with an opportunity to crystallize its expansion plans there. 
The border reopening between HK/China will provide a boost to its HK operations (&gt;70% of revenue). The second half of H1 2023 results reflect an improving revenue trend for HK.
The stock trades at 16x/11x FY23e/24e with ~15% of the market cap in cash and a dividend yield of 6.5%/9.5% FY23e/24e (based on ~100% payout ratio). 


Perfect Medical: Reopening in China to Provide a Boost, Rally to Sustain

Global Healthcare Analyst

Tina Banerjee

Equity Capital Markets

Beauty Farm Medical and Health Industry / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/beauty-farm-medical-and-health-industry-inc" target="_blank" data-smartkarma-citation="entities:35923:1" rel="noopener">Beauty Farm Medical and Health Industry (BFM HK)</a> is the largest provider of traditional beauty services and the fourth largest non-surgical aesthetic medical service provider in China.</li>
<li>The company seeks to raise $300 million from an IPO in Hong Kong market. Morgan Stanley, Haitong International, and Huatai International are the joint sponsors for the proposed IPO.</li>
<li>COVID-19 has hurt recent financial performance of the company and forced it to shut many of the stores in multiple locations. Further, stretched valuation make the IPO unappealing to investors.</li>
</ul>



Beauty Farm Medical and Health Industry (BFM HK) is the largest provider of traditional beauty services and the fourth largest non-surgical aesthetic medical service provider in China.
The company seeks to raise $300 million from an IPO in Hong Kong market. Morgan Stanley, Haitong International, and Huatai International are the joint sponsors for the proposed IPO.
COVID-19 has hurt recent financial performance of the company and forced it to shut many of the stores in multiple locations. Further, stretched valuation make the IPO unappealing to investors.


Beauty Farm Medical and Health Industry (BFM HK) IPO: Pandemic Blemishes Near-Term Growth Prospect

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)

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

Perfect Medical: Reopening in China to Provide a Boost, Rally to Sustain

Perfect Medical trades at 16x/11x FY23e/24e ~15% of the market cap in cash and a div yield of 6.5%/9.5% FY23e/24e (based on ~100% payout ratio). We...

Sameer Taneja

Beauty Farm Medical and Health Industry (BFM HK) IPO: Pandemic Blemishes Near-Term Growth Prospect

The company aims to raise ~$300M by listing on the HKEX. However, the pandemic has took a toll on the company’s recent financial performance in...

Tina Banerjee

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