In today’s briefing:
- Vipshop: With Net Cash at Nearly 50% of Market Cap, Is It a Value Trap or a Takeover Target?
- China Conch (586 HK): Post-Spinoff Blues
- Seazen Group – Earnings Flash – FY 2021 Results – Lucror Analytics
- Weekly Wrap – 01 Apr 2022
Vipshop: With Net Cash at Nearly 50% of Market Cap, Is It a Value Trap or a Takeover Target?
- Vipshop has underperformed, on a 12-month basis, due to a slowdown in active user growth, which has spilt over into slower revenue growth and contracting earnings.
- Material equity investments, accompanied by strategic cooperation agreements, by Tencent and JD.com in December 2017 catalysed significant user growth over the subsequent 3 years.
- The recent de-rating once again flags Vipshop as an attractive takeover target for its current strategic shareholders and broader eCommerce rivals, including nascent disruptors and live-streaming operators.
China Conch (586 HK): Post-Spinoff Blues
- In my last note, I thought China Conch Venture Holdings (586 HK) (CCV) appeared fully-priced. If I had been long CCV, I recommended getting out.
- CCV shed HK$11.35/share after going ex- the China Conch Environment Protection Holdings (587 HK) (CCEP) water treatment in-specie spin-off. CCEP closed at HK$9.77/share on its first day of trading.
- CCV is trading back to around levels prior to the announcement of the spin-off. Separately, CCEP appears to be trading rich relative to waste treatment peers.
Seazen Group – Earnings Flash – FY 2021 Results – Lucror Analytics
Seazen’s FY 2021 results were in line with our expectations, with the company accelerating the pace of property delivery and maintaining a reasonable pace of debt growth to facilitate expansion during H1. It halted land acquisitions and focused on building up liquidity amid market volatility in H2.
We view the company’s refinancing risk as moderate, with Seazen having access to onshore funding. Seazen is likely to slow its expansion in the commercial property segment, given the resurgence of COVID-19 cases and poor market sentiment. We believe the company will resume land acquisitions in 2022, in order to replenish the land bank. Going forward, Seazen is committed to maintaining stability in its operations and having strong liquidity, so as to weather the volatile market conditions.
Weekly Wrap – 01 Apr 2022
Lucror Analytics Weekly Wraps provide an overview of all Morning Views comments and reports published by our analyst team in the past week, and also showcase a list of the most-read reports.
In this Insight:
- First Pacific Co
- Yanzhou Coal Mining Company Limited H
- Indika Energy
- Lippo Karawaci
- Agile Property Holdings
and more…
Before it’s here, it’s on Smartkarma
