In today’s briefing:
- All That Glitters Is Not Gold: Forensic Analysis of Motisons
- [Meituan (3690 HK, BUY, TP HK$118) Company Update]: Why ByteDance’s Purchase of Eleme Is a Bad Idea?
- Full Report – Lifull (2120 JP)
- [Vipshop (VIPS US, BUY, TP US$18.1) TP Change]: Discount Offerings Remain Hot Given Cold Consumption
All That Glitters Is Not Gold: Forensic Analysis of Motisons
- Regulatory Tangles:Promoters faced cricket betting allegations, SEBI penalties, debarment from financial markets and a litany of investigations. Legal and financial risks loom due to regulatory delays and unresolved litigations.
- Operational and Financial Hurdles:Excessive inventory, delayed payments, and opaque related-party transactions.Weaker margins, ROE, and underutilized manufacturing hint at broader governance frailty.
- Debt Dilemmas and Transparency Concerns: Heavy reliance on high-interest promoter loans. Governance lapses are reflected in financial metrics, raising questions about transparency and conflicts of interest.
[Meituan (3690 HK, BUY, TP HK$118) Company Update]: Why ByteDance’s Purchase of Eleme Is a Bad Idea?
- Local news reported an unnamed expert suggesting ByteDance might be buying Eleme for US$7bn, leading to share of Meituan to fall;
- While we believe (1) buying a food delivery business to complement Douyin’s in-store business makes some sense and…
- (2) ByteDance has been aggressive in pushing the boundary of its businesses, an entry into domestic food delivery is a daunting challenge that yields very little benefits for ByteDance;
Full Report – Lifull (2120 JP)
- LIFULL runs the LIFULL Home’s real estate website. Compared to its main rival, whose strategy is focused mainly on the quantity of listings, LIFULL’s aim is to achieve greater quality, as measured by the percentage of inquiries that lead to sales for professional real estate clients.
- While others primarily charge a fixed fee for listings, LIFULL charges a combination of fixed fees and incentive fees based on the number of inquiries received for a listing.
- Compared to its main rival LIFULL tends to invest more heavily in software development and considerably less on advertising.
[Vipshop (VIPS US, BUY, TP US$18.1) TP Change]: Discount Offerings Remain Hot Given Cold Consumption
- Amid demand by consumers for cost effective items, we expect that demand for discounted apparel will sustain into 2024…
- We expect high levels of apparel sales continued in December, as VIPS reported double-digit GMV growth for various types of winter related apparel items during 12/12…
- China’s cost-conscious spending environment favors VIPS, in our view. We maintain BUY and raise TP to US$ 18.1, implying 7x FY24 non-GAAP P/E.
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