In today’s briefing:
- Recent Sell-Off in Tanker Stocks Provides an Opportunity in Cosco Shipping Energy – 1138.HK
- West China Cement (2233 HK): African Cement Play At 4x 2024E PE
- Black Sesame Pre-IPO – PHIP Updates – Unable to Shake off Its Loss-Making Tendencies
- Bloks Group IPO: Exceptional Revenue Hyper-Growth and Profitability Are Unique Among Toy Makers
- Pre-IPO Soft International Group – Whether Performance Growth Can Be Sustained Is a Question Mark
Recent Sell-Off in Tanker Stocks Provides an Opportunity in Cosco Shipping Energy – 1138.HK
- All the business fundamentals continue to trend in the right direction
- The sector has sold off with the general commodity sell-off
- Investors not giving the benefit of the doubt to future oil demand
West China Cement (2233 HK): African Cement Play At 4x 2024E PE
- West China Cement (2233 HK) is a cement company based in Western China. Sales volume in Africa in 2023 was 2.6 million tons, up 117% from 1.2 million tons in 2022.
- The company has 2 million tons of cement capacity in Mozambique, 1.5 million tons in Congo, and 1.3 million tons in Ethiopia.
- The company is trading at 4x 2024E PE. I believe the risk reward is quite high here.
Black Sesame Pre-IPO – PHIP Updates – Unable to Shake off Its Loss-Making Tendencies
- Black Sesame Technologies (BLACKSES HK) is looking to raise around US$300m in its upcoming Hong Kong IPO.
- Black Sesame International Holdings (BSIH) is an automotive-grade computing SoC and SoC-based intelligent vehicle solution provider.
- In our previous note we looked at the company’s past performance. In this note, we discuss Black Sesame’s PHIP updates.
Bloks Group IPO: Exceptional Revenue Hyper-Growth and Profitability Are Unique Among Toy Makers
- Bloks Group, a fast-growing toy company and leader of assembly character toys, filed for a Hong Kong IPO. The company is headquartered in Shanghai, PRC, and has 410 full-time employees.
- Bloks Group has raised $200M+ to date from investors, including YF Capital, Legend Capital, Source Code Capital, Gaorong Capital and SinoMedia Asia Pacific.
- The Chinese toy maker has delivered an exceptional revenue hyper-growth of 169% y/y in 2023. Elite operating metrics and impressive financial profile make IPO attractive for investors.
Pre-IPO Soft International Group – Whether Performance Growth Can Be Sustained Is a Question Mark
- The top two biggest markets of Soft International (China and Russia) are encountering the challenge of slowing growth or even growth stagnation due to decreasing birth rate and increasing competition.
- Single-Digit net profit margin is not satisfactory for a company with strong consumption attributes. This makes us wonder if the personal hygienic disposables is not a money-making business.
- Overreliance on Russian Top-tier Retailer would bring risks to the business.Both revenue growth and profitability could decrease sharply if adverse situations occur. Soft International’s valuation could be lower than peers.
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