Asian Insight Provider - Actionable ideas, CrossASEAN Research

Henry Soediarko

A Long & Short Investment Ideas generator for Asian Equities with 10 years experience in a Hedge fund focused on bottom-up ideas, searching out mispriced ideas and misunderstood investment thesis. Provides on-the-ground insights in various Asian markets with a sway towards ASEAN. Experienced and survived the Asian Financial Crisis in a family business, as well as the Global Financial Crisis in financial markets where lessons learned. It's all about understanding business drivers and navigating business cycles, which has high applicability in generating investment ideas. 

Investment horizon: Mid to Long term

Asian Insight Provider - Actionable ideas

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CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

Haidilao International Holding / Equity Bottom-Up

Poor 1H 2020 caused by COVID-19 has forced the management to shut a majority of its outlets, however, most Haidilao outlets would have operated by around 70-80% capacity with table turnover almost back to pre-COVID time. With more shops opening, the short term upside is more obvious as people are starting to dine out again, prompting higher table turnover and higher spending per meal. 
The risk is obviously a second or third wave of the pandemic but people are "used" to it and instead of shutting down all of the outlets, it is more likely to shut down partially only. The company has already made most of its CapEx for higher safety measures. 
<a href="https://www.smartkarma.com/entities/haidilao-international-holding-ltd" target="_blank" data-smartkarma-citation="entities:27044:1" rel="noopener">Haidilao (6862 HK)</a> 's recovery should be at play and it is even cheaper now relative to <a href="https://www.smartkarma.com/entities/yihai-int-l-holding-ltd" target="_blank" data-smartkarma-citation="entities:22803:1" rel="noopener">Yihai Int’L Holding (1579 HK)</a> although given the investors' bullishness on Yihai, shorting Yihai may not be a good idea. 
<figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/150/611/original/image_28246546621596591331011.png?1596591330" class="editor-image img-responsive" data-smartkarma-image-id="150611"></figure>
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source: Capital IQ
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Haidlao's valuation has not moved much from pre to post COVID while Yihai's has risen by almost 80%, a clear sign of flow-driven share price increase rather than earnings. Although <a href="https://www.smartkarma.com/entities/yihai-int-l-holding-ltd" target="_blank" data-smartkarma-citation="entities:22803:1" rel="noopener">Yihai Int’L Holding (1579 HK)</a> is not a short, investors would probably like to switch from Yihai to Haidilao as the latter's recovery is on the way.

Poor 1H 2020 caused by COVID-19 has forced the management to shut a majority of its outlets, however, most Haidilao outlets would have operated by around 70-80% capacity with table turnover almost back to pre-COVID time. With more shops opening, the short term upside is more obvious as people are starting to dine out again, prompting higher table turnover and higher spending per meal. 
The risk is obviously a second or third wave of the pandemic but people are "used" to it and instead of shutting down all of the outlets, it is more likely to shut down partially only. The company has already made most of its CapEx for higher safety measures. 
Haidilao (6862 HK) 's recovery should be at play and it is even cheaper now relative to Yihai Int’L Holding (1579 HK) although given the investors' bullishness on Yihai, shorting Yihai may not be a good idea. 


source: Capital IQ

Haidlao's valuation has not moved much from pre to post COVID while Yihai's has risen by almost 80%, a clear sign of flow-driven share price increase rather than earnings. Although Yihai Int’L Holding (1579 HK) is not a short, investors would probably like to switch from Yihai to Haidilao as the latter's recovery is on the way. 

Haidilao (6862): A Recovery Is on the Way