Equity Analyst, LightStream Research

Shifara Samsudeen, ACMA, CGMA

A chartered management accountant with more than 10 years of rich experience in investment research and financial analysis. Worked as an equity analyst for one of the world's largest asset managers with USD2.5trn in AUM covering numerous sectors including chemicals, retail, tech, autos, telco, real-estate and banks, globally. Experienced in fundamental equity research, industry research, commodity studies, forensic accounting, and due diligence reviews.

Equity Analyst

Long-Short Analysis on Japan, Asia and the World

LightStream Research

LightStream conducts quantitatively rigorous and data-driven analysis with a focus on Japan and Asia.

We consistently cover the Tech, Consumer and Industrial sectors, and provide ECM and Events coverage more broadly.

We supplement traditional qualitative insights from company relationships with a robust quantitative foundation that examines as much historical data as is available.
We further refine the accuracy of our insights and calls through the use of alternative data to flesh out current trends, and through a valuation framework that emphasises non-superficial peer group selection and a proper attempt to understand the metrics and changes that have driven security valuations in the past.

Equity Capital Markets

Jiumaojiu International Holdings based in China has filed for an IPO which could raise US$246m (HK$2bn) at the midpoint of the IPO range. Jiumaojiu operates a chain of restaurants in China. The company operates and manages five different brands of restaurants in China with each offering a different cuisine.The two core brands, Jiu Mao Jiu (JMJ) and Tai Er account for about 99% of the company revenues. The company’s restaurants are predominantly located in shopping malls in China and the outlook for the Chinese catering service marker remains bright. The Tai Er restaurants offer Sauerkraut fish which is currently experiencing a boom in demand in the country while a large number of restaurants in China are focused on offering the dish. The company expects to open a large number of Tai Er restaurants over the next three years and we expect the company’s earnings to grow as a result. At the same time, we expect the company’s mature brand, JMJ to grow its earnings steadily over the next couple of years while the segment will remain the cash cow for the company. The other brands currently make only about 1% of revenue and the company has planned to expand the other brands over the next 2-3 years. We expect the earnings from other brands to continue to rise and account for about 5% of revenue in 2021E.Based on our analysis, we believe the company’s indicative IPO price is low given the company’s impressive growth profile which should warrant a higher valuation for the company. We would subscribe for this IPO even at the higher end of the indicative IPO price range.

Jiumaojiu International Holdings based in China has filed for an IPO which could raise US$246m (HK$2bn) at the midpoint of the IPO range. Jiumaojiu operates a chain of restaurants in China. The company operates and manages five different brands of restaurants in China with each offering a different cuisine.The two core brands, Jiu Mao Jiu (JMJ) and Tai Er account for about 99% of the company revenues. The company’s restaurants are predominantly located in shopping malls in China and the outlook for the Chinese catering service marker remains bright. The Tai Er restaurants offer Sauerkraut fish which is currently experiencing a boom in demand in the country while a large number of restaurants in China are focused on offering the dish. The company expects to open a large number of Tai Er restaurants over the next three years and we expect the company’s earnings to grow as a result. At the same time, we expect the company’s mature brand, JMJ to grow its earnings steadily over the next couple of years while the segment will remain the cash cow for the company. The other brands currently make only about 1% of revenue and the company has planned to expand the other brands over the next 2-3 years. We expect the earnings from other brands to continue to rise and account for about 5% of revenue in 2021E.Based on our analysis, we believe the company’s indicative IPO price is low given the company’s impressive growth profile which should warrant a higher valuation for the company. We would subscribe for this IPO even at the higher end of the indicative IPO price range.

Jiumaojiu IPO: A Growing Business at an Attractive Valuation