ByteDance, an emerging TMT player in China and one of the challengers to the BAT’s dominance in China, is said to be preparing for 2019 listing. It will be the largest Chinese TMT listing this year as the company was valued at USD 75 billion in the pre-IPO fundraising, closed in October 2018.
In this insight, we will discuss ByteDance’s business, in particular, how the text-based media distribution platform Jinri Toutiao (今日头条) built the foundation of the company, and paved ways for the short-video distribution platform Watermelon Video (西瓜视频), Volcano Video (火山视频), and Tiktok (抖音).
In our next insight, we will discuss how Tiktok became successful and the company’s overseas expansion.
Xingfa Aluminium (98 HK) has announced its major shareholder, Guangxin Aluminium (a wholly-owned Guangdong SASAC vehicle), has acquired 5,000 shares, lifting its stake to 30.001%, triggering a mandatory general offer. The offer price is $5.60, a premium of just 2.94% to last close.
Guangxin, together with certain management of Xingfa, attempted to take Xingfa private at $3.70/share back in 1H17. That scheme failed comprehensively, which was a good outcome for minorities as FY17 net income increased 28%. 1H18 profit was also a 25% improvement over the corresponding period.
The offer price is in line to where Xingfa traded last October and 23% below the recent peak back in mid-June 2018. It is also 37% below where China Lesso Group Holdings (2128 HK) acquired its 26.3% stake in April last year.
At a guess, this low-ball offer provides an exit for large(r) investor with regards to Xingfa’s low liquidity. But no irrevocables have been given and the Offer remains conditional on Guangxin holding 50% of the voting votes.
As expected, Xingfa is currently trading 1.4% through terms. For those interested in small-cap, illiquid stocks, I would buy around these levels to play the back-end, or the (remote) possibility of a bump. The offer has not been declared final.
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
While details of Huzhou’s property growth has been provided and showed that the city is growing the fastest compared to Hangzhou and Wenzhou, other concerns such as related party transactions and the partial listing of assets remain.
In this insight, we will provide updates on the company’s 9M 2018 financials, details of the cornerstone investor, and valuation compared to listed peers. We will also run the deal through our framework.
In our first insight (link here) covering ByteDance, we discuss ByteDance’s app matrix, the differentiating factors of ByteDance and the key difference between its Jinri Toutiao app and Tencent News.
In this insight, we will discuss in details its next blockbuster app, Tiktok. Similar to Jinri Toutiao, it is utilizing AI technology for content curation. In addition to that, the app also uses AI technology to beautify content producers. Compared to text-based content, the short-video content is more viral.
In the next insight, we will look at the company’s overseas expansion, past series of financing and valuation.
Anheuser Busch Inbev Sa/Nv (ABI BB), the world’s largest brewer, is looking to list its Asian operations in order to lighten its debt burden. The listing will probably be in Hong Kong and the company could raise around US$5bn at a valuation of around US$70bn, as per media reports, which will make it one of the largest listings for 2019. Earlier this month, the company picked JPM and MS to lead the deal.
When listed, the company will be the third biggest brewer in China and the largest in South Korea and Australia.
While we have to wait for the application proof to be filed later this year to get more details on the operations, in this insight I’ll take a early look at the Asian operations using the data already available in the parent’s annual and quarterly reports. I’ll primarily address where the business is now and how it has shaped up over the past few years.
Import elasticities. Ease of transferring business between countries. Reliability of alternative supply chains. Time taken to relocate production. The list of unknowns on how easily companies could relocate production from China goes on and on but the bottom line is that uncertainty has been raised and that is bad news for global growth.
CRC (China Railway Corporation, previously known as MOR) has been questioned about its extremely high liability rate and trillions of debts for years. Some experts believe China shall stop HSR (High Speed Railway) construction to reduce the liability in rail system and lower the financial risk of the society. While others believe a high speed rail transportation system is necessary and would improve the efficiency of the society, because China is the third largest country in the world by geographic area.
In this report, we list three possible solutions for CRC’s liability issue: to increase revenue to cover the Capex; to increase funding from local governments or private sectors; to reduce annual rail investment.
Conclusion:
In our view, China will stop expanding its rail system sooner or later. The main frame of HSR is completed. Only some extension lines are required. If CRC doesn’t start building high speed rails for freight transportation, which was mentioned in 2012-2013, China’s annual rail investment might be reduced after 2023.
Before that, CRC is capable of remain its existing investment amount unchanged, without further increasing the financial risk of China’s banking sector. To reduce its debts, increasing rail investment funding proportion from local governments is still an easier option than increasing CRC’s net profit. Once China reduces its rail investment, CRC would be able to reduce its net gearing significantly.
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
Xingfa Aluminium (98 HK) has announced its major shareholder, Guangxin Aluminium (a wholly-owned Guangdong SASAC vehicle), has acquired 5,000 shares, lifting its stake to 30.001%, triggering a mandatory general offer. The offer price is $5.60, a premium of just 2.94% to last close.
Guangxin, together with certain management of Xingfa, attempted to take Xingfa private at $3.70/share back in 1H17. That scheme failed comprehensively, which was a good outcome for minorities as FY17 net income increased 28%. 1H18 profit was also a 25% improvement over the corresponding period.
The offer price is in line to where Xingfa traded last October and 23% below the recent peak back in mid-June 2018. It is also 37% below where China Lesso Group Holdings (2128 HK) acquired its 26.3% stake in April last year.
At a guess, this low-ball offer provides an exit for large(r) investor with regards to Xingfa’s low liquidity. But no irrevocables have been given and the Offer remains conditional on Guangxin holding 50% of the voting votes.
As expected, Xingfa is currently trading 1.4% through terms. For those interested in small-cap, illiquid stocks, I would buy around these levels to play the back-end, or the (remote) possibility of a bump. The offer has not been declared final.
Starbucks’ growth story in China faces a new threat: WeWork Go. U.S. dollar stores face rising threat of substitutes from healthcare insurers. Uber Freight’s new Yelp-like Facility Ratings raises bar further for trucking brokerage firms.
U.S. Dollar Stores: Dollar Tree and Dollar General will face a rising threat of substitutes as healthcare insurers like Health Care Service Corp. launch subsidized meal delivery services to low-income consumers living in food deserts as a preventative healthcare measure.
Trucking Brokerage Firms: Uber Freight’s new Yelp-like Facility Ratings feature raises the bar further for trucking brokerage firms by providing its drivers with a new level of empowerment and transparency.
Starbucks: Starbucks’ growth story in China faces a new threat with the launch of WeWork Go which offers the public free coffee and pay-as-you-go access to WeWork’s locations.
I was thrilled to learn that Google just launched a new feature called Live Transcribe as it will empower deaf people, like my brother, by transcribing audio in real time. I’m also excited to order Casper’s new Glow Light for my kids to help them fall asleep better and wake up. It’s exciting to see Aetna partner with Apple on a new health-tracking and motivation app as it could be really valuable to help people engage in healthy behaviours. It’s also very encouraging to see health insurers like Health Care Service Corp. try to help low-income consumers living in food deserts by offering them subsidized health meal delivery services. While Uber Freight is looking to empower its drivers through its new Yelp-like feature for shipping and receiving facilities, Amazon is empowering its sellers with its Amazon Live Creator app which enables them to livestream for free on its platform to promote their products. And even Foot Locker seems to be gaining a social conscience with its new community-driven mission “to inspire and empower youth culture”, which coincides with its $100M strategic investment in the sneaker resale marketplace GOAT Group.
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
In our first insight (link here) covering ByteDance, we discuss ByteDance’s app matrix, the differentiating factors of ByteDance and the key difference between its Jinri Toutiao app and Tencent News.
In this insight, we will discuss in details its next blockbuster app, Tiktok. Similar to Jinri Toutiao, it is utilizing AI technology for content curation. In addition to that, the app also uses AI technology to beautify content producers. Compared to text-based content, the short-video content is more viral.
In the next insight, we will look at the company’s overseas expansion, past series of financing and valuation.
Anheuser Busch Inbev Sa/Nv (ABI BB), the world’s largest brewer, is looking to list its Asian operations in order to lighten its debt burden. The listing will probably be in Hong Kong and the company could raise around US$5bn at a valuation of around US$70bn, as per media reports, which will make it one of the largest listings for 2019. Earlier this month, the company picked JPM and MS to lead the deal.
When listed, the company will be the third biggest brewer in China and the largest in South Korea and Australia.
While we have to wait for the application proof to be filed later this year to get more details on the operations, in this insight I’ll take a early look at the Asian operations using the data already available in the parent’s annual and quarterly reports. I’ll primarily address where the business is now and how it has shaped up over the past few years.
Import elasticities. Ease of transferring business between countries. Reliability of alternative supply chains. Time taken to relocate production. The list of unknowns on how easily companies could relocate production from China goes on and on but the bottom line is that uncertainty has been raised and that is bad news for global growth.
CRC (China Railway Corporation, previously known as MOR) has been questioned about its extremely high liability rate and trillions of debts for years. Some experts believe China shall stop HSR (High Speed Railway) construction to reduce the liability in rail system and lower the financial risk of the society. While others believe a high speed rail transportation system is necessary and would improve the efficiency of the society, because China is the third largest country in the world by geographic area.
In this report, we list three possible solutions for CRC’s liability issue: to increase revenue to cover the Capex; to increase funding from local governments or private sectors; to reduce annual rail investment.
Conclusion:
In our view, China will stop expanding its rail system sooner or later. The main frame of HSR is completed. Only some extension lines are required. If CRC doesn’t start building high speed rails for freight transportation, which was mentioned in 2012-2013, China’s annual rail investment might be reduced after 2023.
Before that, CRC is capable of remain its existing investment amount unchanged, without further increasing the financial risk of China’s banking sector. To reduce its debts, increasing rail investment funding proportion from local governments is still an easier option than increasing CRC’s net profit. Once China reduces its rail investment, CRC would be able to reduce its net gearing significantly.
ByteDance, an emerging TMT player in China and one of the challengers to the BAT’s dominance in China, is said to be preparing for 2019 listing. It will be the largest Chinese TMT listing this year as the company was valued at USD 75 billion in the pre-IPO fundraising, closed in October 2018.
In this insight, we will discuss ByteDance’s business, in particular, how the text-based media distribution platform Jinri Toutiao (今日头条) built the foundation of the company, and paved ways for the short-video distribution platform Watermelon Video (西瓜视频), Volcano Video (火山视频), and Tiktok (抖音).
In our next insight, we will discuss how Tiktok became successful and the company’s overseas expansion.
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
Import elasticities. Ease of transferring business between countries. Reliability of alternative supply chains. Time taken to relocate production. The list of unknowns on how easily companies could relocate production from China goes on and on but the bottom line is that uncertainty has been raised and that is bad news for global growth.
CRC (China Railway Corporation, previously known as MOR) has been questioned about its extremely high liability rate and trillions of debts for years. Some experts believe China shall stop HSR (High Speed Railway) construction to reduce the liability in rail system and lower the financial risk of the society. While others believe a high speed rail transportation system is necessary and would improve the efficiency of the society, because China is the third largest country in the world by geographic area.
In this report, we list three possible solutions for CRC’s liability issue: to increase revenue to cover the Capex; to increase funding from local governments or private sectors; to reduce annual rail investment.
Conclusion:
In our view, China will stop expanding its rail system sooner or later. The main frame of HSR is completed. Only some extension lines are required. If CRC doesn’t start building high speed rails for freight transportation, which was mentioned in 2012-2013, China’s annual rail investment might be reduced after 2023.
Before that, CRC is capable of remain its existing investment amount unchanged, without further increasing the financial risk of China’s banking sector. To reduce its debts, increasing rail investment funding proportion from local governments is still an easier option than increasing CRC’s net profit. Once China reduces its rail investment, CRC would be able to reduce its net gearing significantly.
ByteDance, an emerging TMT player in China and one of the challengers to the BAT’s dominance in China, is said to be preparing for 2019 listing. It will be the largest Chinese TMT listing this year as the company was valued at USD 75 billion in the pre-IPO fundraising, closed in October 2018.
In this insight, we will discuss ByteDance’s business, in particular, how the text-based media distribution platform Jinri Toutiao (今日头条) built the foundation of the company, and paved ways for the short-video distribution platform Watermelon Video (西瓜视频), Volcano Video (火山视频), and Tiktok (抖音).
In our next insight, we will discuss how Tiktok became successful and the company’s overseas expansion.
Xingfa Aluminium (98 HK) has announced its major shareholder, Guangxin Aluminium (a wholly-owned Guangdong SASAC vehicle), has acquired 5,000 shares, lifting its stake to 30.001%, triggering a mandatory general offer. The offer price is $5.60, a premium of just 2.94% to last close.
Guangxin, together with certain management of Xingfa, attempted to take Xingfa private at $3.70/share back in 1H17. That scheme failed comprehensively, which was a good outcome for minorities as FY17 net income increased 28%. 1H18 profit was also a 25% improvement over the corresponding period.
The offer price is in line to where Xingfa traded last October and 23% below the recent peak back in mid-June 2018. It is also 37% below where China Lesso Group Holdings (2128 HK) acquired its 26.3% stake in April last year.
At a guess, this low-ball offer provides an exit for large(r) investor with regards to Xingfa’s low liquidity. But no irrevocables have been given and the Offer remains conditional on Guangxin holding 50% of the voting votes.
As expected, Xingfa is currently trading 1.4% through terms. For those interested in small-cap, illiquid stocks, I would buy around these levels to play the back-end, or the (remote) possibility of a bump. The offer has not been declared final.
Starbucks’ growth story in China faces a new threat: WeWork Go. U.S. dollar stores face rising threat of substitutes from healthcare insurers. Uber Freight’s new Yelp-like Facility Ratings raises bar further for trucking brokerage firms.
U.S. Dollar Stores: Dollar Tree and Dollar General will face a rising threat of substitutes as healthcare insurers like Health Care Service Corp. launch subsidized meal delivery services to low-income consumers living in food deserts as a preventative healthcare measure.
Trucking Brokerage Firms: Uber Freight’s new Yelp-like Facility Ratings feature raises the bar further for trucking brokerage firms by providing its drivers with a new level of empowerment and transparency.
Starbucks: Starbucks’ growth story in China faces a new threat with the launch of WeWork Go which offers the public free coffee and pay-as-you-go access to WeWork’s locations.
I was thrilled to learn that Google just launched a new feature called Live Transcribe as it will empower deaf people, like my brother, by transcribing audio in real time. I’m also excited to order Casper’s new Glow Light for my kids to help them fall asleep better and wake up. It’s exciting to see Aetna partner with Apple on a new health-tracking and motivation app as it could be really valuable to help people engage in healthy behaviours. It’s also very encouraging to see health insurers like Health Care Service Corp. try to help low-income consumers living in food deserts by offering them subsidized health meal delivery services. While Uber Freight is looking to empower its drivers through its new Yelp-like feature for shipping and receiving facilities, Amazon is empowering its sellers with its Amazon Live Creator app which enables them to livestream for free on its platform to promote their products. And even Foot Locker seems to be gaining a social conscience with its new community-driven mission “to inspire and empower youth culture”, which coincides with its $100M strategic investment in the sneaker resale marketplace GOAT Group.
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
Import elasticities. Ease of transferring business between countries. Reliability of alternative supply chains. Time taken to relocate production. The list of unknowns on how easily companies could relocate production from China goes on and on but the bottom line is that uncertainty has been raised and that is bad news for global growth.
ByteDance, an emerging TMT player in China and one of the challengers to the BAT’s dominance in China, is said to be preparing for 2019 listing. It will be the largest Chinese TMT listing this year as the company was valued at USD 75 billion in the pre-IPO fundraising, closed in October 2018.
In this insight, we will discuss ByteDance’s business, in particular, how the text-based media distribution platform Jinri Toutiao (今日头条) built the foundation of the company, and paved ways for the short-video distribution platform Watermelon Video (西瓜视频), Volcano Video (火山视频), and Tiktok (抖音).
In our next insight, we will discuss how Tiktok became successful and the company’s overseas expansion.
Xingfa Aluminium (98 HK) has announced its major shareholder, Guangxin Aluminium (a wholly-owned Guangdong SASAC vehicle), has acquired 5,000 shares, lifting its stake to 30.001%, triggering a mandatory general offer. The offer price is $5.60, a premium of just 2.94% to last close.
Guangxin, together with certain management of Xingfa, attempted to take Xingfa private at $3.70/share back in 1H17. That scheme failed comprehensively, which was a good outcome for minorities as FY17 net income increased 28%. 1H18 profit was also a 25% improvement over the corresponding period.
The offer price is in line to where Xingfa traded last October and 23% below the recent peak back in mid-June 2018. It is also 37% below where China Lesso Group Holdings (2128 HK) acquired its 26.3% stake in April last year.
At a guess, this low-ball offer provides an exit for large(r) investor with regards to Xingfa’s low liquidity. But no irrevocables have been given and the Offer remains conditional on Guangxin holding 50% of the voting votes.
As expected, Xingfa is currently trading 1.4% through terms. For those interested in small-cap, illiquid stocks, I would buy around these levels to play the back-end, or the (remote) possibility of a bump. The offer has not been declared final.
Starbucks’ growth story in China faces a new threat: WeWork Go. U.S. dollar stores face rising threat of substitutes from healthcare insurers. Uber Freight’s new Yelp-like Facility Ratings raises bar further for trucking brokerage firms.
U.S. Dollar Stores: Dollar Tree and Dollar General will face a rising threat of substitutes as healthcare insurers like Health Care Service Corp. launch subsidized meal delivery services to low-income consumers living in food deserts as a preventative healthcare measure.
Trucking Brokerage Firms: Uber Freight’s new Yelp-like Facility Ratings feature raises the bar further for trucking brokerage firms by providing its drivers with a new level of empowerment and transparency.
Starbucks: Starbucks’ growth story in China faces a new threat with the launch of WeWork Go which offers the public free coffee and pay-as-you-go access to WeWork’s locations.
I was thrilled to learn that Google just launched a new feature called Live Transcribe as it will empower deaf people, like my brother, by transcribing audio in real time. I’m also excited to order Casper’s new Glow Light for my kids to help them fall asleep better and wake up. It’s exciting to see Aetna partner with Apple on a new health-tracking and motivation app as it could be really valuable to help people engage in healthy behaviours. It’s also very encouraging to see health insurers like Health Care Service Corp. try to help low-income consumers living in food deserts by offering them subsidized health meal delivery services. While Uber Freight is looking to empower its drivers through its new Yelp-like feature for shipping and receiving facilities, Amazon is empowering its sellers with its Amazon Live Creator app which enables them to livestream for free on its platform to promote their products. And even Foot Locker seems to be gaining a social conscience with its new community-driven mission “to inspire and empower youth culture”, which coincides with its $100M strategic investment in the sneaker resale marketplace GOAT Group.
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
ByteDance, an emerging TMT player in China and one of the challengers to the BAT’s dominance in China, is said to be preparing for 2019 listing. It will be the largest Chinese TMT listing this year as the company was valued at USD 75 billion in the pre-IPO fundraising, closed in October 2018.
In this insight, we will discuss ByteDance’s business, in particular, how the text-based media distribution platform Jinri Toutiao (今日头条) built the foundation of the company, and paved ways for the short-video distribution platform Watermelon Video (西瓜视频), Volcano Video (火山视频), and Tiktok (抖音).
In our next insight, we will discuss how Tiktok became successful and the company’s overseas expansion.
Xingfa Aluminium (98 HK) has announced its major shareholder, Guangxin Aluminium (a wholly-owned Guangdong SASAC vehicle), has acquired 5,000 shares, lifting its stake to 30.001%, triggering a mandatory general offer. The offer price is $5.60, a premium of just 2.94% to last close.
Guangxin, together with certain management of Xingfa, attempted to take Xingfa private at $3.70/share back in 1H17. That scheme failed comprehensively, which was a good outcome for minorities as FY17 net income increased 28%. 1H18 profit was also a 25% improvement over the corresponding period.
The offer price is in line to where Xingfa traded last October and 23% below the recent peak back in mid-June 2018. It is also 37% below where China Lesso Group Holdings (2128 HK) acquired its 26.3% stake in April last year.
At a guess, this low-ball offer provides an exit for large(r) investor with regards to Xingfa’s low liquidity. But no irrevocables have been given and the Offer remains conditional on Guangxin holding 50% of the voting votes.
As expected, Xingfa is currently trading 1.4% through terms. For those interested in small-cap, illiquid stocks, I would buy around these levels to play the back-end, or the (remote) possibility of a bump. The offer has not been declared final.
Starbucks’ growth story in China faces a new threat: WeWork Go. U.S. dollar stores face rising threat of substitutes from healthcare insurers. Uber Freight’s new Yelp-like Facility Ratings raises bar further for trucking brokerage firms.
U.S. Dollar Stores: Dollar Tree and Dollar General will face a rising threat of substitutes as healthcare insurers like Health Care Service Corp. launch subsidized meal delivery services to low-income consumers living in food deserts as a preventative healthcare measure.
Trucking Brokerage Firms: Uber Freight’s new Yelp-like Facility Ratings feature raises the bar further for trucking brokerage firms by providing its drivers with a new level of empowerment and transparency.
Starbucks: Starbucks’ growth story in China faces a new threat with the launch of WeWork Go which offers the public free coffee and pay-as-you-go access to WeWork’s locations.
I was thrilled to learn that Google just launched a new feature called Live Transcribe as it will empower deaf people, like my brother, by transcribing audio in real time. I’m also excited to order Casper’s new Glow Light for my kids to help them fall asleep better and wake up. It’s exciting to see Aetna partner with Apple on a new health-tracking and motivation app as it could be really valuable to help people engage in healthy behaviours. It’s also very encouraging to see health insurers like Health Care Service Corp. try to help low-income consumers living in food deserts by offering them subsidized health meal delivery services. While Uber Freight is looking to empower its drivers through its new Yelp-like feature for shipping and receiving facilities, Amazon is empowering its sellers with its Amazon Live Creator app which enables them to livestream for free on its platform to promote their products. And even Foot Locker seems to be gaining a social conscience with its new community-driven mission “to inspire and empower youth culture”, which coincides with its $100M strategic investment in the sneaker resale marketplace GOAT Group.
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
Fashion industry is a leading polluter of water, air and land and its rapid growth has inflicted serious environmental damage in manufacturing bases across Asia. With increased consumer awareness and public scrutiny, leading brands globally have committed to adopt sustainable practices. This can mean a rise in operating costs, margin pressures which can lead to higher prices and/or lower volumes. What does that mean for corporate earnings growth and stock valuations? Our report attempts to arrive at some ballpark estimations based on a scenario analysis. Leading branded apparel companies can suffer market value destruction ranging up to 30% if their long term margins and growth assumptions are reset at lower levels following a shake-up of their existing low cost model. And, those who refuse to adapt and adopt sustainable processes could soon be shunned by ESG-led investors and environmentally mindful consumers alike, leading to valuation discounts. Investors Beware.
Over the past decades, corporate growth and profitability agenda overshadowed environmental considerations, and apparel brands have grown in an environmentally unsustainable manner. Beneath the façade of glitzy fashion magazines lies the dirty underbelly of pesticide use, water mismanagement, irresponsible effluent discharge, chemical poisoning, greenhouse gas emissions, energy overuse, micro-plastic pollution and landfill dumping. Until recently, the notion that apparel retailers should be responsible and accountable for the environmental infringements in their highly fragmented but globalised supply chain was an unwelcome idea. Under pressure from consumers and activists, this is now changing. With ESG-led investing going mainstream, investors too may start to take notice.
The detailed report below includes:
Summary and conclusions from the study on Fast Fashion’s environmental footprint in Asia and impact of rise in consumer awareness on global apparel companies
Understanding Fast fashion
Fast Fashion trends in Asia – Survey findings on consumer attitudes to shopping and environmental issues
Environmental issues in Asia due to Fast fashion
Sustainable clothing – an emerging trend, and what can turn it mainstream
Investing in Fast fashion: between a rock and a hard place – a Valuation vulnerability analysis
Sustainability & 13 leading fast Fashion players – how future ready are they?
This report was prepared jointly by the team at Investory – Devi Subhakesan , Rohinee Sharma and Shilpa Krishnan. Investory commissioned an exclusive survey for this report to understand young urban Asian consumers’ attitude towards fast fashion and their understanding of environmental issues.
Get Straight to the Source on Smartkarma
Smartkarma supports the world’s leading investors with high-quality, timely, and actionable Insights. Subscribe now for unlimited access, or request a demo below.
ByteDance, an emerging TMT player in China and one of the challengers to the BAT’s dominance in China, is said to be preparing for 2019 listing. It will be the largest Chinese TMT listing this year as the company was valued at USD 75 billion in the pre-IPO fundraising, closed in October 2018.
In this insight, we will discuss ByteDance’s business, in particular, how the text-based media distribution platform Jinri Toutiao (今日头条) built the foundation of the company, and paved ways for the short-video distribution platform Watermelon Video (西瓜视频), Volcano Video (火山视频), and Tiktok (抖音).
In our next insight, we will discuss how Tiktok became successful and the company’s overseas expansion.
Xingfa Aluminium (98 HK) has announced its major shareholder, Guangxin Aluminium (a wholly-owned Guangdong SASAC vehicle), has acquired 5,000 shares, lifting its stake to 30.001%, triggering a mandatory general offer. The offer price is $5.60, a premium of just 2.94% to last close.
Guangxin, together with certain management of Xingfa, attempted to take Xingfa private at $3.70/share back in 1H17. That scheme failed comprehensively, which was a good outcome for minorities as FY17 net income increased 28%. 1H18 profit was also a 25% improvement over the corresponding period.
The offer price is in line to where Xingfa traded last October and 23% below the recent peak back in mid-June 2018. It is also 37% below where China Lesso Group Holdings (2128 HK) acquired its 26.3% stake in April last year.
At a guess, this low-ball offer provides an exit for large(r) investor with regards to Xingfa’s low liquidity. But no irrevocables have been given and the Offer remains conditional on Guangxin holding 50% of the voting votes.
As expected, Xingfa is currently trading 1.4% through terms. For those interested in small-cap, illiquid stocks, I would buy around these levels to play the back-end, or the (remote) possibility of a bump. The offer has not been declared final.
Starbucks’ growth story in China faces a new threat: WeWork Go. U.S. dollar stores face rising threat of substitutes from healthcare insurers. Uber Freight’s new Yelp-like Facility Ratings raises bar further for trucking brokerage firms.
U.S. Dollar Stores: Dollar Tree and Dollar General will face a rising threat of substitutes as healthcare insurers like Health Care Service Corp. launch subsidized meal delivery services to low-income consumers living in food deserts as a preventative healthcare measure.
Trucking Brokerage Firms: Uber Freight’s new Yelp-like Facility Ratings feature raises the bar further for trucking brokerage firms by providing its drivers with a new level of empowerment and transparency.
Starbucks: Starbucks’ growth story in China faces a new threat with the launch of WeWork Go which offers the public free coffee and pay-as-you-go access to WeWork’s locations.
I was thrilled to learn that Google just launched a new feature called Live Transcribe as it will empower deaf people, like my brother, by transcribing audio in real time. I’m also excited to order Casper’s new Glow Light for my kids to help them fall asleep better and wake up. It’s exciting to see Aetna partner with Apple on a new health-tracking and motivation app as it could be really valuable to help people engage in healthy behaviours. It’s also very encouraging to see health insurers like Health Care Service Corp. try to help low-income consumers living in food deserts by offering them subsidized health meal delivery services. While Uber Freight is looking to empower its drivers through its new Yelp-like feature for shipping and receiving facilities, Amazon is empowering its sellers with its Amazon Live Creator app which enables them to livestream for free on its platform to promote their products. And even Foot Locker seems to be gaining a social conscience with its new community-driven mission “to inspire and empower youth culture”, which coincides with its $100M strategic investment in the sneaker resale marketplace GOAT Group.
There is rising discussion about the probability of whether we will see a deal between the US and China to prevent a full blow trade war by March 1. We wanted to give you our assessment and its many layers.
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Xingfa Aluminium (98 HK) has announced its major shareholder, Guangxin Aluminium (a wholly-owned Guangdong SASAC vehicle), has acquired 5,000 shares, lifting its stake to 30.001%, triggering a mandatory general offer. The offer price is $5.60, a premium of just 2.94% to last close.
Guangxin, together with certain management of Xingfa, attempted to take Xingfa private at $3.70/share back in 1H17. That scheme failed comprehensively, which was a good outcome for minorities as FY17 net income increased 28%. 1H18 profit was also a 25% improvement over the corresponding period.
The offer price is in line to where Xingfa traded last October and 23% below the recent peak back in mid-June 2018. It is also 37% below where China Lesso Group Holdings (2128 HK) acquired its 26.3% stake in April last year.
At a guess, this low-ball offer provides an exit for large(r) investor with regards to Xingfa’s low liquidity. But no irrevocables have been given and the Offer remains conditional on Guangxin holding 50% of the voting votes.
As expected, Xingfa is currently trading 1.4% through terms. For those interested in small-cap, illiquid stocks, I would buy around these levels to play the back-end, or the (remote) possibility of a bump. The offer has not been declared final.
Starbucks’ growth story in China faces a new threat: WeWork Go. U.S. dollar stores face rising threat of substitutes from healthcare insurers. Uber Freight’s new Yelp-like Facility Ratings raises bar further for trucking brokerage firms.
U.S. Dollar Stores: Dollar Tree and Dollar General will face a rising threat of substitutes as healthcare insurers like Health Care Service Corp. launch subsidized meal delivery services to low-income consumers living in food deserts as a preventative healthcare measure.
Trucking Brokerage Firms: Uber Freight’s new Yelp-like Facility Ratings feature raises the bar further for trucking brokerage firms by providing its drivers with a new level of empowerment and transparency.
Starbucks: Starbucks’ growth story in China faces a new threat with the launch of WeWork Go which offers the public free coffee and pay-as-you-go access to WeWork’s locations.
I was thrilled to learn that Google just launched a new feature called Live Transcribe as it will empower deaf people, like my brother, by transcribing audio in real time. I’m also excited to order Casper’s new Glow Light for my kids to help them fall asleep better and wake up. It’s exciting to see Aetna partner with Apple on a new health-tracking and motivation app as it could be really valuable to help people engage in healthy behaviours. It’s also very encouraging to see health insurers like Health Care Service Corp. try to help low-income consumers living in food deserts by offering them subsidized health meal delivery services. While Uber Freight is looking to empower its drivers through its new Yelp-like feature for shipping and receiving facilities, Amazon is empowering its sellers with its Amazon Live Creator app which enables them to livestream for free on its platform to promote their products. And even Foot Locker seems to be gaining a social conscience with its new community-driven mission “to inspire and empower youth culture”, which coincides with its $100M strategic investment in the sneaker resale marketplace GOAT Group.
There is rising discussion about the probability of whether we will see a deal between the US and China to prevent a full blow trade war by March 1. We wanted to give you our assessment and its many layers.
Fashion industry is a leading polluter of water, air and land and its rapid growth has inflicted serious environmental damage in manufacturing bases across Asia. With increased consumer awareness and public scrutiny, leading brands globally have committed to adopt sustainable practices. This can mean a rise in operating costs, margin pressures which can lead to higher prices and/or lower volumes. What does that mean for corporate earnings growth and stock valuations? Our report attempts to arrive at some ballpark estimations based on a scenario analysis. Leading branded apparel companies can suffer market value destruction ranging up to 30% if their long term margins and growth assumptions are reset at lower levels following a shake-up of their existing low cost model. And, those who refuse to adapt and adopt sustainable processes could soon be shunned by ESG-led investors and environmentally mindful consumers alike, leading to valuation discounts. Investors Beware.
Over the past decades, corporate growth and profitability agenda overshadowed environmental considerations, and apparel brands have grown in an environmentally unsustainable manner. Beneath the façade of glitzy fashion magazines lies the dirty underbelly of pesticide use, water mismanagement, irresponsible effluent discharge, chemical poisoning, greenhouse gas emissions, energy overuse, micro-plastic pollution and landfill dumping. Until recently, the notion that apparel retailers should be responsible and accountable for the environmental infringements in their highly fragmented but globalised supply chain was an unwelcome idea. Under pressure from consumers and activists, this is now changing. With ESG-led investing going mainstream, investors too may start to take notice.
The detailed report below includes:
Summary and conclusions from the study on Fast Fashion’s environmental footprint in Asia and impact of rise in consumer awareness on global apparel companies
Understanding Fast fashion
Fast Fashion trends in Asia – Survey findings on consumer attitudes to shopping and environmental issues
Environmental issues in Asia due to Fast fashion
Sustainable clothing – an emerging trend, and what can turn it mainstream
Investing in Fast fashion: between a rock and a hard place – a Valuation vulnerability analysis
Sustainability & 13 leading fast Fashion players – how future ready are they?
This report was prepared jointly by the team at Investory – Devi Subhakesan , Rohinee Sharma and Shilpa Krishnan. Investory commissioned an exclusive survey for this report to understand young urban Asian consumers’ attitude towards fast fashion and their understanding of environmental issues.
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