Quality-first, Business-perspective Strategy, Urbem (HK) Limited

Steven Chen

Quality-first, Business-perspective Strategy

Thematic (Sector/Industry)

<ul>
<li>Beaten-down industries often offer rare opportunities for investors to buy quality businesses at attractive prices;</li>
<li>We feel that the valuations of a few Hong Kong-based beauty service providers seem at least reasonable;</li>
<li>Then the question would be whether the "cheap" business is truly of high quality (i.e., a well-moated compounder);</li>
<li>As always, we advocate focusing solely on winners that are persistently profitable, high-return, and cash-rich;</li>
<li>We took a look at three such players in this space and concluded with only one of them worth an "investable" status.</li>
</ul>


Beaten-down industries often offer rare opportunities for investors to buy quality businesses at attractive prices;
We feel that the valuations of a few Hong Kong-based beauty service providers seem at least reasonable;
Then the question would be whether the "cheap" business is truly of high quality (i.e., a well-moated compounder);
As always, we advocate focusing solely on winners that are persistently profitable, high-return, and cash-rich;
We took a look at three such players in this space and concluded with only one of them worth an "investable" status.


A Look at Hong Kong's Beaten-Down Beauty Service Stocks

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, IPOs & Placements

Smartkarma

Smartkarma unites the fragmented investment industry, connecting institutional investors, independent research providers, and corporates within a single network.

Research Reinvented

Equity Capital Markets

Union Medical Healthcare, the largest provider of aesthetic medical services in Hong Kong, plans to raise US$150m through its IPO in Hong Kong. As per media reports, the company is in the pre-marketing stage and could launch the IPO as soon as next month.In this insight take a look at some of the factors that could impact the deal. Post deal launch we will follow up with another insight to discuss valuations. At the outset a 64% CAGR in revenue appears impressive, however, a closer look reveals a few cracks in revenue and earnings growth. In addition, were one to exclude the revenue from unutilized of pre-paid treatments, there wouldn't be much earnings left.

Union Medical Healthcare, the largest provider of aesthetic medical services in Hong Kong, plans to raise US$150m through its IPO in Hong Kong. As per media reports, the company is in the pre-marketing stage and could launch the IPO as soon as next month.In this insight take a look at some of the factors that could impact the deal. Post deal launch we will follow up with another insight to discuss valuations. At the outset a 64% CAGR in revenue appears impressive, however, a closer look reveals a few cracks in revenue and earnings growth. In addition, were one to exclude the revenue from unutilized of pre-paid treatments, there wouldn't be much earnings left. 

Union Medical Healthcare Pre-IPO Review - Dressed up with More than Its Fair Share of Botox

Hong Kong

Water Oasis Group Limited distributes exclusively ~H2O+ brand skin-care products in Hong Kong, Macau, Taiwan and China. The Company also operates spa centers under the Oasis Spa, Oasis Beauty, and Oasis Beauty Homme brand names.

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Water Oasis (1161 HK)

A Look at Hong Kong's Beaten-Down Beauty Service Stocks

The Hong Kong beauty service industry is among the hardest-hit throughout the pandemic. We recommend focusing solely on the highest-quality and...

Steven Chen

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52-week Range

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A Look at Hong Kong's Beaten-Down Beauty Service Stocks

The Hong Kong beauty service industry is among the hardest-hit throughout the pandemic. We recommend focusing solely on the highest-quality and...

Steven Chen

Union Medical Healthcare Pre-IPO Review - Dressed up with More than Its Fair Share of Botox

Union Medical Healthcare, the largest provider of aesthetic medical services in Hong Kong, plans to raise US$150m through its IPO in Hong Kong. As...

Sumeet Singh