In today’s briefing:
- China Resources Beverage Pre-IPO – PHIP Updates – Revenue Slowing, Margins Growing
- Quiddity Leaderboard HSTECH Dec 24: Midea Group Question Mark and Final Rankings for Exp ADDs/DELs
- Intermestic IPO: Forecasts and Valuation
- Fast Retailing(9983) | Weaving a Global Empire; FY8/25 Outlook
- China Resources Beverage Pre-IPO – Updated Thoughts on Valuation
- Pre-IPO China Resources Beverage (PHIP Updates) – Some Points Worth the Attention
- Shortlist of High Conviction Philippines Equity Ideas – October 2024
- Pvh Corp – VNCE: European Tour: Creating Key Growth Vehicle; Reiterating Buy Rating, $3 PT
- Slightly More than the Annual IPOs, 119 Companies Newly Applied for Transitional Measures This Year
China Resources Beverage Pre-IPO – PHIP Updates – Revenue Slowing, Margins Growing
- China Resources Beverage (CRB HK) is looking to raise up to US$1bn in its upcoming Hong Kong IPO.
- China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.
- In our earlier notes, we talked about the company’s past performance and provided our thoughts on valuations. In this note, we will look at updates from its most recent filings.
Quiddity Leaderboard HSTECH Dec 24: Midea Group Question Mark and Final Rankings for Exp ADDs/DELs
- The HSTECH Index tracks the performance of the top 30 technology companies listed in Hong Kong that have high business exposure to certain technology themes.
- In this insight, we take a look at the final rankings of potential ADDs and potential DELs for the December 2024 index rebal event.
- We do not expect any changes for the HSTECH index in December 2024. However, we expect there to be capping flows of US$1,079mn one-way.
Intermestic IPO: Forecasts and Valuation
- The Japanese eyewear company Intermestic (262A JP) has set the terms for its Tokyo IPO and plans to raise US$121m through the IPO.
- Our analysis shows that the company’s IPO is valued attractively compared to JINS Inc (3046 JP) , who offers eyewear at a similar price range to Intermestic.
- Japanese eyewear makers who have aggressively expanded into overseas markets seems to be suffering from falling sales and margins, particularly in China due to economic slowdown.
Fast Retailing(9983) | Weaving a Global Empire; FY8/25 Outlook
- Fast Retailing, through its flagship Uniqlo, is redefining retail by focusing on high-quality, functional apparel, surpassing global peers in operating profit margins.
- The company’s “scrap & build” strategy revitalizes underperforming stores in China, while expanding internationally, with a strong growth trajectory across North America and Europe.
- With a revised fair value of 52,500 yen, we forecast significant sales growth, driven by favorable seasonal trends, global expansion and recovering consumer sentiment in China.
China Resources Beverage Pre-IPO – Updated Thoughts on Valuation
- China Resources Beverage (CRB HK) is looking to raise up to US$1bn in its upcoming Hong Kong IPO.
- China Resources Beverage manufactures and sells packaged drinking water and RTD soft beverages in China.
- In our earlier notes, we talked about the company’s past performance and provided our initial thoughts on valuations. In this note, we will relook at valuations post its PHIP updates.
Pre-IPO China Resources Beverage (PHIP Updates) – Some Points Worth the Attention
- Nongfu Spring is able to take a price war to grab market share,but the strategy of CR Beverage forced to cut prices may not work,making its profit margin further decline.
- CR Beverage’s business model is “single business + scale expansion”, worse than “multi-category structure + new product incubation”.Future performance growth may inevitably slow down if without the second growth curve.
- Whether in terms of product/revenue structure, profitability, or sustainability of growth momentum, CR Beverage isn’t as good as Nongfu Spring. Valuation of CR Beverage should be lower than Nongfu Spring.
Shortlist of High Conviction Philippines Equity Ideas – October 2024
- We are gradually building a high-conviction coverage of ideas for the mid and small-caps in the Philippines.
- We set criteria for high ROCE, reasonable growth (10-15% YoY), strong balance sheets, and reasonable capital allocation (dividend yields), all ingredients for being multi-baggers.
- We like Ginebra San Miguel (GSMI PM), The Keepers Holdings (KEEPR PM), and DigiPlus Interactive (PLUS PM). We recently included Sti Education Systems (STI PM) in our coverage
Pvh Corp – VNCE: European Tour: Creating Key Growth Vehicle; Reiterating Buy Rating, $3 PT
- We are reiterating our Buy rating, projections and $3 price target for Vince after meeting with management in their European headquarters and touring the Galeries Lafayette shop in shop in Paris.
- We believe, with the company now well capitalized and acting in a materially more strategic fashion, the European opportunities, from owned stores to additional wholesale to category expansion, position Vince to drive material international growth going froward.
- When coupled with strong product offerings and what we believe are material opportunities in the domestic market, we believe Vince is ideally positioned to register material top and bottom line growth, and we reiterate our Buy rating and $3 price target for VNCE.
Slightly More than the Annual IPOs, 119 Companies Newly Applied for Transitional Measures This Year
- Of the companies that have been removed from the list of companies subject to transitional measures, only about half have been able to meet the criteria for maintaining their listing.
- It’s not easy for companies applying transitional measures to comply with the criteria for maintaining listing, so it’s realistic to move to a market with looser criteria for maintaining listing.
- Besides problems with listing screening process, many managers consider IPO to be the goal and have little will to grow the company after listing, leading to slump in corporate value.
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