HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Bottom-Up

Zhangzhou Pientzehuang Pharmaceutical Co., Ltd. / Equity Bottom-Up

Zhangzhou Pientzehuang Pharmaceutical Co., Ltd.

<ul>
<li>Due to the lockdown/pandemic, <a href="https://www.smartkarma.com/entities/zhangzhou-pientzehuang-pharmaceutical-co-ltd" target="_blank" data-smartkarma-citation="entities:15709:1" rel="noopener">Pientzehuang Pharmaceutical</a>’s 2022H1 performance slowed down. Considering the economic downturn and people's cutting back spending on non-rigid consumption, the full-year revenue growth could be around 10%-20%.</li>
<li>The Company's key challenge lies in revenue growth. However, it is not easy to increase sales largely due to the scarcity of raw materials, which limits the expansion of production.</li>
<li>Pien Tze Huang is overvalued. Share price could continue to fall,but it will bounce back due to its high moat. 2022 is a good time for bottom fishing this stock.</li>
</ul>


Due to the lockdown/pandemic, Pientzehuang Pharmaceutical’s 2022H1 performance slowed down. Considering the economic downturn and people's cutting back spending on non-rigid consumption, the full-year revenue growth could be around 10%-20%.
The Company's key challenge lies in revenue growth. However, it is not easy to increase sales largely due to the scarcity of raw materials, which limits the expansion of production.
Pien Tze Huang is overvalued. Share price could continue to fall,but it will bounce back due to its high moat. 2022 is a good time for bottom fishing this stock.


Zhangzhou Pientzehuang Pharmaceutical (600436CH) 22H1- 2022 Is Stressful but Shares Will Bounce Back

Equity Capital Markets

Shanghai Chicmax Cosmetic / Equity Capital Markets

<ul>
<li>Although adopting a multi-brand strategy, <a href="https://www.smartkarma.com/entities/shanghai-chicmax-cosmetic-co-ltd" target="_blank" data-smartkarma-citation="entities:35503:1" rel="noopener">Shanghai Chicmax Cosmetic (CMC HK)</a>’s revenue mainly came from three brands, namely KANS, One Leaf and Baby Elephant, with no blockbuster brands afterwards. </li>
<li>Chicmax emphasizes marketing/promotion over R&amp;D, which has dragged down net profit margin despite solid revenues and gross profit margins. Product quality problem is also a concern.</li>
<li>We hope that Chicmax can increase R&amp;D investment and strengthen product innovation and quality control, so as to gain more consumer loyalty and trust, especially in high-end market. </li>
</ul>


Although adopting a multi-brand strategy, Shanghai Chicmax Cosmetic (CMC HK)’s revenue mainly came from three brands, namely KANS, One Leaf and Baby Elephant, with no blockbuster brands afterwards. 
Chicmax emphasizes marketing/promotion over R&amp;D, which has dragged down net profit margin despite solid revenues and gross profit margins. Product quality problem is also a concern.
We hope that Chicmax can increase R&amp;D investment and strengthen product innovation and quality control, so as to gain more consumer loyalty and trust, especially in high-end market. 


Pre-IPO Shanghai Chicmax Cosmetic - The Current Development Strategy Will Not Go Far

<ul>
<li>In terms of the business model,the uniqueness and scarcity of Pien Tze Huang keep the market demand at high level,supporting its strong ability to raise prices and establish high moat.</li>
<li>The concerns on single product risk, scare raw materials and inadequate production capacity would cast a shadow over the Company’ future development.</li>
<li>The breakthrough point lies in whether the Company can make use of the unique advantages generated from "Pien Tze Huang" series to cultivate a second strong growth point in time.</li>
</ul>


In terms of the business model,the uniqueness and scarcity of Pien Tze Huang keep the market demand at high level,supporting its strong ability to raise prices and establish high moat.
The concerns on single product risk, scare raw materials and inadequate production capacity would cast a shadow over the Company’ future development.
The breakthrough point lies in whether the Company can make use of the unique advantages generated from "Pien Tze Huang" series to cultivate a second strong growth point in time.


Zhangzhou Pientzehuang Pharmaceutical (600436.CH) - The Strength and the Concerns

Research on Tech Companies

Evelyn Zhang

Thematic (Sector/Industry)

<ul>
<li>The competition between Alibaba and JD has been heating up after Alibaba abandoned its "exclusivity requirement”, JD sale GMV increased by 28.4% vs Alibaba only increased by 8.4% YoY.  </li>
<li>Live streaming has become a mainstream sales channel, Douyin and Kuaishou both achieved more than 200% sales increase YoY.  </li>
<li>Influencers and brands are fighting over price setting power. Many brands have opened their own official livestreaming channels this year.</li>
</ul>


The competition between Alibaba and JD has been heating up after Alibaba abandoned its "exclusivity requirement”, JD sale GMV increased by 28.4% vs Alibaba only increased by 8.4% YoY.  
Live streaming has become a mainstream sales channel, Douyin and Kuaishou both achieved more than 200% sales increase YoY.  
Influencers and brands are fighting over price setting power. Many brands have opened their own official livestreaming channels this year.


IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

FSN E-Commerce Ventures (Nykaa) / Equity Capital Markets

<div><p><a href="https://www.smartkarma.com/entities/fsn-e-commerce-ventures-nykaa" target="_blank" data-smartkarma-citation="entities:33796:1" rel="noopener">FSN E-Commerce Ventures (Nykaa) (1003622D IN)</a> provides e-retailing of beauty and fashion products through two verticals Nykaa (beauty and personal care) and Nykaa Fashion (apparel and accessories). Nykaa is the largest speciality beauty and personal care platform in India as measured by the value of products sold in the FY21 and in 5MFY22 (five months ending August), according to RedSeer.   </p></div><div>
<p>Nykaa will launch its IPO on 28 October. The IPO comprises a primary raise of Rs6,300 million ($84 million) with the remainder 42.0 million secondary shares. At the indicative price range of Rs1,085-1,125 per share, the gross proceeds are Rs51.8-53.2 billion ($691-714 million). An anchor placement of up to Rs23.4 billion ($312 million) will open on 27 October, and the IPO will close on 1 November. </p>
<p>In <a href="https://www.smartkarma.com/insights/nykaa-ipo-initiation-beauty-parade" target="_blank" data-smartkarma-citation="insights:58791" rel="noopener">Nykaa IPO Initiation: Beauty Parade</a>, we stated that Nykaa has a strong positioning in India’s e-commerce beauty products industry, underpinned by the strong brand recognition of the ‘Nykaa’ brand. The financial performance is solid with strong growth, rising margins and cash generation. These characteristics should enable Nykaa to hold its own against intensifying competition. We concluded that Nykaa has attractive fundamentals.</p>
</div><div><div class="content-highlight"><p>In <a href="https://www.smartkarma.com/insights/nykaa-ipo-on-trend" target="_blank" data-smartkarma-citation="insights:59407" rel="noopener">Nykaa IPO: On Trend</a>, we stated that the recent results from the updated prospectus reinforce our view that Nykaa has the ability to deliver strong profitable growth. Our valuation analysis suggests that the IPO price range is attractive.</p></div></div>

FSN E-Commerce Ventures (Nykaa) (1003622D IN) provides e-retailing of beauty and fashion products through two verticals Nykaa (beauty and personal care) and Nykaa Fashion (apparel and accessories). Nykaa is the largest speciality beauty and personal care platform in India as measured by the value of products sold in the FY21 and in 5MFY22 (five months ending August), according to RedSeer.   
Nykaa will launch its IPO on 28 October. The IPO comprises a primary raise of Rs6,300 million ($84 million) with the remainder 42.0 million secondary shares. At the indicative price range of Rs1,085-1,125 per share, the gross proceeds are Rs51.8-53.2 billion ($691-714 million). An anchor placement of up to Rs23.4 billion ($312 million) will open on 27 October, and the IPO will close on 1 November. 
In Nykaa IPO Initiation: Beauty Parade, we stated that Nykaa has a strong positioning in India’s e-commerce beauty products industry, underpinned by the strong brand recognition of the ‘Nykaa’ brand. The financial performance is solid with strong growth, rising margins and cash generation. These characteristics should enable Nykaa to hold its own against intensifying competition. We concluded that Nykaa has attractive fundamentals.
In Nykaa IPO: On Trend, we stated that the recent results from the updated prospectus reinforce our view that Nykaa has the ability to deliver strong profitable growth. Our valuation analysis suggests that the IPO price range is attractive.

China

Shanghai Jahwa United Co., Ltd. develops, manufactures and wholesales skin care and hair care products, cosmetics, perfumes, detergents, and other household chemical products.  The Company also provides technical and food services.

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Shanghai Jahwa United Co A (600315 CH)

Zhangzhou Pientzehuang Pharmaceutical (600436CH) 22H1- 2022 Is Stressful but Shares Will Bounce Back

Pien Tze Huang's performance slows down this year. Shares could continue to fall due to overvaluation, but will bounce back due to its high moat....

Xinyao (Criss) Wang

Pre-IPO Shanghai Chicmax Cosmetic - The Current Development Strategy Will Not Go Far

Emphasizing marketing over R&D drives the current growth, but it's not enough for Chicmax to go further. Low net profit/quality issue/weak product...

Xinyao (Criss) Wang

Zhangzhou Pientzehuang Pharmaceutical (600436.CH) - The Strength and the Concerns

We analyzed the business model of Pien Tze Huang, which is mainly due to its uniqueness and scarcity that build high moat. But it still has to...

Xinyao (Criss) Wang

A Quiet Single Day

Another year another Single's Day, but the pandemic has put a damper on this year's shopping bonanza. Faced with a shrinking pie, a new player is...

Evelyn Zhang

Nykaa IPO: Valuation Insights

Nykaa will launch its IPO on 28 October to raise gross proceeds of $691-714 million. Our valuation analysis suggests that the IPO price range is...

Arun George

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