Asian Equities Analyst, Logistics & Transport, Tracking Traffic

Daniel Hellberg

Asian Equities Analyst, Logistics & Transport

Equity Capital Markets

In our first note on <a href="https://www.smartkarma.com/entities/27439" target="_blank" data-smartkarma-citation="entities:27439:1">Fosun Tourism (1638664D HK)</a>'s planned Hong Kong IPO from a few months ago, we concluded that the resort developer-operator suffered from generally weak profitability, stagnant growth at its main Club Med asset, and limited exposure to growth markets in Asia-Pacific (see <a href="https://www.smartkarma.com/insights/fosun-tourism-ipo-part-1-back-to-the-beach-with-club-med-but-is-this-a-china-play" target="_blank" data-smartkarma-citation="insights:24160">Fosun Tourism IPO, Part 1: Back to the Beach With Club Med! | But Is This a 'China' Play?</a>). In this follow-up note, we look at Fosun Tourism's proposed valuation range of HK$15.6-20.0 per share. Using a sum-of-the-parts approach, we conclude that the company is reasonably priced near the mid-point of the proposed price range (around HK$17.8-18.1 per share).However, despite its unchallenging valuation, we do not view Fosun Tourism as attractive, even near the bottom of the IPO price range. The interesting, fast-growing segments of the business (mainly its Chinese resort properties) are overwhelmed by the scale of its legacy assets, where growth is mainly driven by sluggish tourism demand in developed markets. Fosun Tourism's IPO has been covered extensively here at Smartkarma; in addition to our previous note (<a href="https://www.smartkarma.com/insights/fosun-tourism-ipo-part-1-back-to-the-beach-with-club-med-but-is-this-a-china-play" target="_blank">here</a>), <a href="https://www.smartkarma.com/profiles/4" target="_blank" data-smartkarma-citation="accounts:4">Sumeet Singh</a> (<a href="https://www.smartkarma.com/insights/fosun-tourism-ipo-fair-value-is-probably-below-low-end" target="_blank">here</a>) and <a href="https://www.smartkarma.com/profiles/1079" target="_blank" data-smartkarma-citation="accounts:1079">Johannes Salim, CFA</a> (<a href="https://www.smartkarma.com/insights/fosun-tourism-ipo-valuation-not-attractively-valued-given-low-roic" target="_blank">here</a>) and others have written about the offering in detail. The deal is set to price on December 7th and begin trading a week later, on December 14th.

In our first note on Fosun Tourism (1638664D HK)'s planned Hong Kong IPO from a few months ago, we concluded that the resort developer-operator suffered from generally weak profitability, stagnant growth at its main Club Med asset, and limited exposure to growth markets in Asia-Pacific (see Fosun Tourism IPO, Part 1: Back to the Beach With Club Med! | But Is This a 'China' Play?). In this follow-up note, we look at Fosun Tourism's proposed valuation range of HK$15.6-20.0 per share. Using a sum-of-the-parts approach, we conclude that the company is reasonably priced near the mid-point of the proposed price range (around HK$17.8-18.1 per share).However, despite its unchallenging valuation, we do not view Fosun Tourism as attractive, even near the bottom of the IPO price range. The interesting, fast-growing segments of the business (mainly its Chinese resort properties) are overwhelmed by the scale of its legacy assets, where growth is mainly driven by sluggish tourism demand in developed markets. Fosun Tourism's IPO has been covered extensively here at Smartkarma; in addition to our previous note (here), Sumeet Singh (here) and Johannes Salim, CFA (here) and others have written about the offering in detail. The deal is set to price on December 7th and begin trading a week later, on December 14th.

Fosun Tourism IPO, Part 2: Valuation Reasonable, But Story Remains Unexciting

Taiwan

Vigor Kobo Co. Ltd. bakes and sells cakes and pastries in Taiwan.

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Vigor Kobo (2733 TT)

Fosun Tourism IPO, Part 2: Valuation Reasonable, But Story Remains Unexciting

In our first note on Fosun Tourism (1638664D HK)'s planned Hong Kong IPO from a few months ago, we concluded that the resort developer-operator...

Daniel Hellberg

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