In today’s briefing:
- Haidilao’s Imminent SpinOff of the Super Hi Overseas Business – Index Treatment and Implications
- Endeavour Group Placement – Recent Momentum Has Been Very Weak
- Sula Vineyards IPO: Forensic Analysis
- 2021 & 2022 High Conviction Review: Time’s Up For Seven & I But Japan Tobacco Has More Room to Run
- Long-Term Growth Intact: Xtep
- Weilong Delicious Global IPO Trading – Liked by Retail but Still at a Premium
Haidilao’s Imminent SpinOff of the Super Hi Overseas Business – Index Treatment and Implications
- On 11 July, Haidilao (6862 HK) announced it would propose to spin off its international restaurant business (13-15% of revenue) to shareholders and employees. Shareholders approved in August.
- There were interim announcements and indeed interim reports with some information, but not a lot. But Super Hi International Holding was headed for separate listing in HK.
- Last week, Haidilao said it was going ahead with a Listing by Introduction pending listing approval by HKEX. Haidilao shares go ex- 16 December. Index providers have announced treatment.
Endeavour Group Placement – Recent Momentum Has Been Very Weak
- Woolworths Ltd (WOW AU) plans to raise around US$438m via selling 5.5% of Endeavour Group (EDV AU).
- Endeavour Group was demerged from Woolworths in Jun 2021 and it runs the drinks and hospitality business of Woolworths.
- In this note, we will talk about the deal dynamics and run the deal through our ECM framework.
Sula Vineyards IPO: Forensic Analysis
- Sula Vineyards (1332009D IN) has currently come up with its IPO. The ~INR 9.6 bn IPO comprises offer for sale and has a price band of INR 340-357 per share.
- The company is a market leader with a market share crossing 50% in a relatively nascent INR 13.45 bn domestic 100% grape wine market.
- Key forensic takeaways that one should consider is high litigation liabilities, emphasis on related party transactions, irrational dividends and absurd trend of line items.
2021 & 2022 High Conviction Review: Time’s Up For Seven & I But Japan Tobacco Has More Room to Run
- As the year draws to a close, we took time to assess the effectiveness of our high-conviction calls made during the past two years.
- With further dividend hikes looking increasingly possible, our 2022 high-conviction call, Japan Tobacco (2914 JP) has more room to run this year.
- However, it’s probably the right time to take profits from our 2021 high-conviction trade, Seven & I Holdings (3382 JP) as the US gas-stations profitability maxed-out in the last quarter.
Long-Term Growth Intact: Xtep
- 4Q22 retail sales was negatively affected by the covid restrictions
- Sales growth is expected to recover in 1Q23 with China’s nationwide loosening policy.
- Long term growth is intact with continued upgrades of brands, products and channels
Weilong Delicious Global IPO Trading – Liked by Retail but Still at a Premium
- Weilong Delicious Global (WDG), a spicy snack food company in China, raised around US$130m in its Hong Kong IPO.
- According to F&S, WDG ranked first among spicy snack food enterprises in China, with a market share of 6.2%, and in the seasoned flour product and spicy vegetable snacks categories.
- We have covered various aspects of the deal in our previous notes. In this note we will talk about the demand and trading dynamics.
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