CHINA - Healthcare, Steel, Autos, Education, Research From Beijing

Scott Laprise/ 乐天虎

CHINA - Healthcare, Steel, Autos, Education

Equity Bottom-Up

<ul><li>China has the highest level of consumer confidence in the world.</li><li>China disposable income up 7.3% YoY.</li><li>China napkins and diaper segments grew 11% in 2Q17 YoY.</li><li>Chinese consumers are willing to pay premium prices for perceived higher value disposable diapers.</li><li>We favour companies producing disposable diapers for the Chinese market, as growth has been exceptional at 27% YoY.</li><li>Online is the biggest channel for diapers exceeding offline since August 2016 hitting 67% share in June 2017.</li><li>Online prices for diapers can be as much as 80%+ cheaper.</li><li>Imported diapers sell better than domestically produced due to safety and comfort highlighting the importance of the one child.</li><li>We think the Japanese brands are growing the fastest such as Unicharm and Kao while P&amp;G and Hengan are losing share.</li></ul>

China has the highest level of consumer confidence in the world.China disposable income up 7.3% YoY.China napkins and diaper segments grew 11% in 2Q17 YoY.Chinese consumers are willing to pay premium prices for perceived higher value disposable diapers.We favour companies producing disposable diapers for the Chinese market, as growth has been exceptional at 27% YoY.Online is the biggest channel for diapers exceeding offline since August 2016 hitting 67% share in June 2017.Online prices for diapers can be as much as 80%+ cheaper.Imported diapers sell better than domestically produced due to safety and comfort highlighting the importance of the one child.We think the Japanese brands are growing the fastest such as Unicharm and Kao while P&amp;G and Hengan are losing share.

China Consumers - Chinese Prefer Japanese Diapers - We Go Shopping to Find Out

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

Smartkarma

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Vinda International / Equity Capital Markets

Vinda's Chairman (Li Chao Wang), Vice Chairman (Yu Yi Fang) and Chief Technology Officer (Dong Yi Ping) are selling 19.012 million shares. We like the company's fundamentals, in particular: 1) it is moving up the value chain to sell higher value-add products (and thus higher margins), 2) it is quickly moving into e-commerce (7% revenue from e-commerce in 2014 vs 2% in 2013).Its valuation (last close) is slightly higher than Hengan however, we think it is worth some premium as it is expected to grow faster and the synergy with SCA is yet to be fully realized. Despite negative rating from our framework (mostly as a result of placement properties given the nature of secondary sales), we think the placement is an opportunity for investors to accumulate Vinda's sharesm, at the backdrop of mainland's capital flow to Hong Kong market (see <a href="http://www.smartkarma.com/insights/hk-china-mutual-recognition-of-funds-china-increases-outflows-to-the-world" target="_blank">Travis note</a>).

Vinda's Chairman (Li Chao Wang), Vice Chairman (Yu Yi Fang) and Chief Technology Officer (Dong Yi Ping) are selling 19.012 million shares. We like the company's fundamentals, in particular: 1) it is moving up the value chain to sell higher value-add products (and thus higher margins), 2) it is quickly moving into e-commerce (7% revenue from e-commerce in 2014 vs 2% in 2013).Its valuation (last close) is slightly higher than Hengan however, we think it is worth some premium as it is expected to grow faster and the synergy with SCA is yet to be fully realized. Despite negative rating from our framework (mostly as a result of placement properties given the nature of secondary sales), we think the placement is an opportunity for investors to accumulate Vinda's sharesm, at the backdrop of mainland's capital flow to Hong Kong market (see Travis note). 

Moving up the value chain, catching up with Hengan, opportunity to accumulate

Hong Kong

Vinda International Holdings Limited manufactures tissue paper products in China.

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Vinda International (3331 HK)

China Consumers - Chinese Prefer Japanese Diapers - We Go Shopping to Find Out

China has the highest level of consumer confidence in the world. China disposable income up 7.3% YoY. China napkins and diaper segments grew 11%...

Scott Laprise/ 乐天虎

Moving up the value chain, catching up with Hengan, opportunity to accumulate

Vinda's Chairman (Li Chao Wang), Vice Chairman (Yu Yi Fang) and Chief Technology Officer (Dong Yi Ping) are selling 19.012 million shares. We like...

Ke Yan, CFA, FRM

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52-week Range

Market Cap (USDm)

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