In today’s briefing:
- Baicha Baidao (2555 HK) IPO: Valuation Insights
- Nongfu Spring (9633 HK): Criticism Not a Concern, Strong Performance, But Flat Price, Buy
- Sichuan Baicha Baidao IPO – Doesn’t Offer a Discount to Peers
- Doesn’t Cooperation Rather than Competition Slow the Pace of Improvement in Disclosure in English?
- Vinfast (VFS US) – An EV Accident Waiting to Happen?
- Johor Plantations Pre-IPO – Assets in Prime Yield Stage But Industry Isn’t Really Expected to Grow
- Corn Prices To Fire Up on Rising Energy Costs
- Inflation Surprises as Commodities Rip Higher
- BBW: Management Meetings: Poised for Growth; Reiterate Buy Rating, $41 PT
Baicha Baidao (2555 HK) IPO: Valuation Insights
- Sichuan Baicha Baidao Industrial (SCBCBDID CH), a leading freshly made tea drinks company, has launched an HKEx IPO to raise US$330 million. The shares will be listed on 23 April.
- We previously discussed the IPO in Baicha Baidao IPO: The Bull Case and Baicha Baidao IPO: The Bear Case.
- There are no cornerstone investors. Our valuation analysis suggests that Baicha is fairly valued at the HK$17.50 IPO price. Therefore, we would pass on the IPO.
Nongfu Spring (9633 HK): Criticism Not a Concern, Strong Performance, But Flat Price, Buy
- We believe the criticism against Nongfu Spring will eventually help the company.
- Catching the trend of sugar free, tea revenue surged by 83% in 2023.
- The company achieved higher growth and higher margin, but its stock price is still flat.
Sichuan Baicha Baidao IPO – Doesn’t Offer a Discount to Peers
- Sichuan Baicha Baidao Industrial is looking to raise up to US$330m in its HK IPO.
- SBBI sells new-style tea drinks through its ChaPanda stores. According to F&S, SBBI ranked third in China’s new-style tea shop market with a market share of 6.8% in FY23.
- We have looked at the company’s performance in our past note. In this note, we talk about valuations
Doesn’t Cooperation Rather than Competition Slow the Pace of Improvement in Disclosure in English?
- TSE officially announced that it will request prime market listed companies to simultaneously disclose two documents, financial statements and timely disclosure information, in Japanese and English from April 2025.”
- Given the characteristics of Japanese companies, which tend to implement only minimum requirements, few companies will engage in English language disclosure in their annual securities reports, which wasn’t explicitly stated.
- Rather than improving the quality of the market to make it easier for global investors to trade, TSE has set efforts targets to match the speed of the slowest ship.
Vinfast (VFS US) – An EV Accident Waiting to Happen?
- Vinfast (VFS US) is large on promise but low on delivery, with sales in FY2023 coming in well below expectations, and the vast majority being to related companies.
- The company is building huge capacity in Vietnam, India, and Indonesia in the region, and in the US, where sales have been slow but where capex is required.
- Vingroup has set up ride-hailing company GSM, using Vinfast vehicles for its fleet, making up 50% of its sales in 2023, leaving question marks over the sustainability of its model.
Johor Plantations Pre-IPO – Assets in Prime Yield Stage But Industry Isn’t Really Expected to Grow
- Johor Plantations Group (2368120D MK) is looking to raise around US$180m in its upcoming Malaysia IPO.
- Johor Plantations Group (JPG) is an upstream oil palm plantation firm operating predominantly in Johor, Malaysia.
- In this note, we look at the firm’s past performance.
Corn Prices To Fire Up on Rising Energy Costs
- Corn prices are presently being pressured by ample supplies owing to the record US harvest.
- Corn prices face an upside risk owing to elevated demand for ethanol and supply uncertainty from the South American harvest.
- Premium for long-dated corn futures over near-term futures is on the rise. A calendar spread can be used to express this view.
Inflation Surprises as Commodities Rip Higher
- Last week’s inflation data surprised market participants on the upside. CPI YoY: 3,2% vs. 3,1% estimate. Core CPI m/m: 0,4% vs 0,3% estimated
- Even larger was the upside surprise in the PPI data. Friends of the 70s double-dip inflation scenario will probably love this chart.
- Take a closer look at the 70s and how inflation recovered before it take of in the late 70s for another rip higher.
BBW: Management Meetings: Poised for Growth; Reiterate Buy Rating, $41 PT
- We are reiterating our Buy rating, $41 price target and projections for Build-A-Bear Workshop after meeting with management in their St.
- Louis headquarters.
- We believe there remain multiple near and longer term growth opportunities for the company, as they expand the product, places and prices they offer “Furry friends” and further leverage the trusted Build-a-Bear brand name.
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