Global Emerging Market Equities, Propitious Research

Wium Malan, CFA

Global Emerging Market Equities

Independent, Fundamental Quantitative Research

Propitious Research

Fully independent, fundamental and quantitative equity research, focused on companies in the Telecommunication, Media, Technology, Internet and Healthcare sectors in the Global Emerging Markets. Idea generation focused on Quality stocks, trading below their intrinsic Value, with sound Corporate Governance.

Equity Bottom-Up

<ul>
<li>The slowdown in Chinese retail sales of apparel seems to have been factored into <a href="https://www.smartkarma.com/entities/vipshop-holdings-ltd-adr" target="_blank" data-smartkarma-citation="entities:1088:1" rel="noopener">Vipshop Holdings (VIPS US)</a> 1Q 2024 revenue growth expectations whilst bottom-line is supported by margin expansion.</li>
<li>With net cash at ~40% of its market cap, the share price should be supported by the ongoing share repurchase program and its inaugural annual dividend policy.</li>
<li>Its 6.6x NTM PE ratio (~4x ex-cash) seems extremely attractive for a highly cash-generative business set to (conservatively) grow earnings at high-single-digits whilst buying back shares and paying dividends.</li>
</ul>


The slowdown in Chinese retail sales of apparel seems to have been factored into Vipshop Holdings (VIPS US) 1Q 2024 revenue growth expectations whilst bottom-line is supported by margin expansion.
With net cash at ~40% of its market cap, the share price should be supported by the ongoing share repurchase program and its inaugural annual dividend policy.
Its 6.6x NTM PE ratio (~4x ex-cash) seems extremely attractive for a highly cash-generative business set to (conservatively) grow earnings at high-single-digits whilst buying back shares and paying dividends.


Vipshop: Net Cash at 40% of Market Cap, Now Paying Dividends and Buying Back Shares

Blue Lotus Non US Internet research, Blue Lotus Research Institute

Ying Pan

Blue Lotus Non US Internet research

China growth and global non-US Internet equities

Blue Lotus Research Institute

Blue Lotus Research is a Hong Kong Type 4 Licensed investment advisory firm focusing on Chinese growth equities and global non-US Internet equities

<ul>
<li>Vipshop reported C4Q23 top-line, non-GAAP EBIT, and GAAP net profit in-line, 6.3% and 7.0% vs. our estimate, and 4.5%, 20.5%, and 23.9%, vs. consensus, respectively;</li>
<li>We expect the two themes of “live for the moment” consumption and consumption downgrade to persist in 2024. The former drives apparel spending, while the latter drives consumers to Vipshop</li>
<li>We maintain BUY and raise the TP to US$ 20.4, implying 7.7x CY24 non-GAAP P/E, and 4.9x CY24 EV/Earnings.</li>
</ul>


Vipshop reported C4Q23 top-line, non-GAAP EBIT, and GAAP net profit in-line, 6.3% and 7.0% vs. our estimate, and 4.5%, 20.5%, and 23.9%, vs. consensus, respectively;
We expect the two themes of “live for the moment” consumption and consumption downgrade to persist in 2024. The former drives apparel spending, while the latter drives consumers to Vipshop
We maintain BUY and raise the TP to US$ 20.4, implying 7.7x CY24 non-GAAP P/E, and 4.9x CY24 EV/Earnings.


[Vipshop (VIPS US, BUY, TP US$20.4)TP Change]: Will Live for the Moment Consumption Persist in 2024?

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Event-Driven

<ul>
<li>PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.</li>
<li>The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.</li>
<li>In this note, we'll talk about the latest developments, possible outcomes and implications.</li>
</ul>


PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US listed China companies.
The Hong Kong visit was on the back of the 26th Aug 2022 announcement by PCAOB and CSRC that they had entered into an agreement with US authorities for access.
In this note, we'll talk about the latest developments, possible outcomes and implications.


China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

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.

Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/atrenew-inc" target="_blank" data-smartkarma-citation="entities:33426:1" rel="noopener">ATRenew (RERE US)</a> operates the largest pre-owned consumer electronics transactions and services platform in China. It is listed in June 2021 at US$14 per ADS. </li>
<li>The shares are down 63% YTD largely due to the tech market sell-off. Unlike most tech companies, ATRenew is starting to deliver growth with profits, cash generation and share buybacks.</li>
<li>The valuation is undemanding compared to a peer group of pre-owned marketplaces and global online retail marketplaces. It will also appeal to investors with an ESG mandate.</li>
</ul>



ATRenew (RERE US) operates the largest pre-owned consumer electronics transactions and services platform in China. It is listed in June 2021 at US$14 per ADS. 
The shares are down 63% YTD largely due to the tech market sell-off. Unlike most tech companies, ATRenew is starting to deliver growth with profits, cash generation and share buybacks.
The valuation is undemanding compared to a peer group of pre-owned marketplaces and global online retail marketplaces. It will also appeal to investors with an ESG mandate.


ATRenew (RERE US): Pre-Owned Satisfaction

<a href="https://www.smartkarma.com/entities/vipshop-holdings-ltd-adr" target="_blank" data-smartkarma-citation="entities:1088:1" rel="noopener">Vipshop Holdings (VIPS US)</a> has had an exceptionally volatile 12 months of trading. Following a &gt;200% share price surge between October 2020 and March 2021, the share price has corrected 77%, wiping out nearly $24bn in market value. The significant sell-off, coupled with less severe earnings expectation downgrades (-18%) from the sell-side, has resulted in Vipshop de-rating from a peak forward PE ratio of 25.3x to only 6.9x, which is the cheapest the stock has ever been. 
In this insight, we take a closer look at the meaningful market events which have driven the sell-off in Vipshop as well as the short- and longer-term earnings outlook for the company. 
Going into their 3Q21 reporting period, Vipshop is facing an exceptionally high growth base set in the comparative period as well as macro-economic headwinds due to a slowing Chinese economy and retail spending, which could result in the continuation of the earnings downgrade cycle over the short- to medium-term. However, trading on an estimated 5.3x ex-cash forward PE ratio likely implies that the buy-side has factored most of this in and we are nearing the point of peak pessimism.

Vipshop Holdings (VIPS US) has had an exceptionally volatile 12 months of trading. Following a &gt;200% share price surge between October 2020 and March 2021, the share price has corrected 77%, wiping out nearly $24bn in market value. The significant sell-off, coupled with less severe earnings expectation downgrades (-18%) from the sell-side, has resulted in Vipshop de-rating from a peak forward PE ratio of 25.3x to only 6.9x, which is the cheapest the stock has ever been. 
In this insight, we take a closer look at the meaningful market events which have driven the sell-off in Vipshop as well as the short- and longer-term earnings outlook for the company. 
Going into their 3Q21 reporting period, Vipshop is facing an exceptionally high growth base set in the comparative period as well as macro-economic headwinds due to a slowing Chinese economy and retail spending, which could result in the continuation of the earnings downgrade cycle over the short- to medium-term. However, trading on an estimated 5.3x ex-cash forward PE ratio likely implies that the buy-side has factored most of this in and we are nearing the point of peak pessimism.

China

Vipshop Holdings Ltd. retails branded products at discount over the Internet. The Company retails through flash sales, in which limited quantities of an item are sold at deep discount for a specified period of time.

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Vipshop Holdings (VIPS US)

Vipshop: Net Cash at 40% of Market Cap, Now Paying Dividends and Buying Back Shares

In this insight, we analyse Vipshop’s growth outlook, referencing reported Chinese retail sales data, its margin progression, strong balance sheet,...

Wium Malan, CFA

[Vipshop (VIPS US, BUY, TP US$20.4)TP Change]: Will Live for the Moment Consumption Persist in 2024?

Vipshop's C4Q23 results meet expectations, with "live for the moment" and consumption downgrade trends driving growth in 2024. Analysts maintain a...

Blue Lotus Research Institute

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

ATRenew (RERE US): Pre-Owned Satisfaction

Unlike most tech companies, ATRenew is starting to deliver growth with profits, cash generation and share buybacks. The valuation remains undemanding.

Arun George

Vipshop: Cheapest It Has Ever Been

In this insight, we take a closer look at the meaningful market events which have driven the sell-off in Vipshop as well as the short- and longer...

Wium Malan, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Vipshop: Net Cash at 40% of Market Cap, Now Paying Dividends and Buying Back Shares

In this insight, we analyse Vipshop’s growth outlook, referencing reported Chinese retail sales data, its margin progression, strong balance sheet,...

Wium Malan, CFA

[Vipshop (VIPS US, BUY, TP US$20.4)TP Change]: Will Live for the Moment Consumption Persist in 2024?

​Vipshop's C4Q23 results meet expectations, with "live for the moment" and consumption downgrade trends driving growth in 2024. Analysts maintain a...

Blue Lotus Research Institute

China ADRs Delisting - Friday Could Be Judgment Day for over US$800bn Mcap of Stocks

PCAOB officials concluded their Hong Kong visit last month and PCAOB is due to announce its annual judgment on whether it had adequate access to US...

Sumeet Singh

ATRenew (RERE US): Pre-Owned Satisfaction

Unlike most tech companies, ATRenew is starting to deliver growth with profits, cash generation and share buybacks. The valuation remains undemanding.

Arun George

Vipshop: Cheapest It Has Ever Been

In this insight, we take a closer look at the meaningful market events which have driven the sell-off in Vipshop as well as the short- and longer...

Wium Malan, CFA

Vipshop's C4Q23 results meet expectations, with "live for the moment" and consumption downgrade trends driving growth in 2024. Analysts maintain a...