Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

A buy-side analyst with over 15 years of experience investing in Asian markets and specializing in the mid-small cap space, emphasizing value investing in companies with good free cash flows/dividends and long-term holding horizons. 
Exempt Financial Adviser (EFA) under CrossASEAN Research Pte Ltd. It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity, Bottom-up Analyst

Yadea Negative EV, Cash Pile Growth>50% No Dividends ??

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Forensic Accounting

Yadea Group Holdings / Forensic Accounting

At first glance <a href="https://www.smartkarma.com/entities/yadea-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:22706:1" rel="noopener">Yadea Group Holdings (1585 HK)</a> seems a very compelling investment. It probably would pop up on lots of value investing screens. This is what a brief summary of an investment thesis in Yadea would look like:
1) Play on EV, 20% CAGR revenue growth over the last five years.  EV bikes and scooters will gravitate towards lithium batteries and the company is prepared to make that change. Future growth in this company likely to be 25-30% CAGR for the next 5 years. 
2) A 650 mn USD company with 83% of the market cap in cash ( this is excluding the pledged bank deposits , if we included those then market cap is below cash ).  The ex-cash P-E is &lt;2x.  So the company could do buybacks or increase its dividend payout ratio.
3) 14% market share in an industry that will head into consolidation as new regulations sweep through the industry making life difficult for the fragmented players of the market. As on date the number of players in the market is around 170 ( see Yadea presentation in appendix )
Upon closer examination there are lots of questions one has to ask about this cash. I wonder why this company has built such a war chest and and if it will ever be distributed to the shareholders.

At first glance Yadea Group Holdings (1585 HK) seems a very compelling investment. It probably would pop up on lots of value investing screens. This is what a brief summary of an investment thesis in Yadea would look like:
1) Play on EV, 20% CAGR revenue growth over the last five years.  EV bikes and scooters will gravitate towards lithium batteries and the company is prepared to make that change. Future growth in this company likely to be 25-30% CAGR for the next 5 years. 
2) A 650 mn USD company with 83% of the market cap in cash ( this is excluding the pledged bank deposits , if we included those then market cap is below cash ).  The ex-cash P-E is &lt;2x.  So the company could do buybacks or increase its dividend payout ratio.
3) 14% market share in an industry that will head into consolidation as new regulations sweep through the industry making life difficult for the fragmented players of the market. As on date the number of players in the market is around 170 ( see Yadea presentation in appendix )
Upon closer examination there are lots of questions one has to ask about this cash. I wonder why this company has built such a war chest and and if it will ever be distributed to the shareholders.

Yadea - Play on EV , 83% of Market Cap in Cash, Will Shareholders See the Cash?