Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

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

Equity Bottom-Up

Water Oasis Group Limited distributes exclusively ~H2O+ brand skin-care products in Hong Kong, Macau, Taiwan and China. The Company also operates spa centers under the Oasis Spa, Oasis Beauty, and Oasis Beauty Homme brand names.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/water-oasis-group-ltd" target="_blank" rel="noopener">Water Oasis (1161 HK) </a>skimped on its final dividend and paid only 2 HK cents (compared to our expectation of ~5 HK cents), sending its share prices down 14% post results.</li>
<li>Insider buying after the results helped steady the shares, but we see that buying after the declaration of dividends as sending a wrong signal to some minority shareholders.</li>
<li>There is immense value, trading at 4.4x PE and 0.3x EV-EBITDA, with 485 mn HKD net cash (~90% of the market cap), but we need increased dividends to crystallize it.</li>
</ul>



Water Oasis (1161 HK) skimped on its final dividend and paid only 2 HK cents (compared to our expectation of ~5 HK cents), sending its share prices down 14% post results.
Insider buying after the results helped steady the shares, but we see that buying after the declaration of dividends as sending a wrong signal to some minority shareholders.
There is immense value, trading at 4.4x PE and 0.3x EV-EBITDA, with 485 mn HKD net cash (~90% of the market cap), but we need increased dividends to crystallize it.


Water Oasis (1161 HK): Discouraging Dividend, Value Intact

Commodities

Copper is a chemical element with symbol Cu (from Latin: cuprum) and atomic number 29. It is a soft, malleable and ductile metal with very high thermal and electrical conductivity. A freshly exposed surface of pure copper has a reddish-orange color. It is used as a conductor of heat and electricity, as a building material and as a constituent of various metal alloys, such as Sterling silver used in jewelry, cupronickel used to make marine hardware and coins and constantan used in strain gauges and thermocouples for temperature measurement.

<ul>
<li>We expect copper demand to have ended FY24 at around 27.1 million tons (up 4% year over year). FY25 could be an interesting year in which copper demand outstrips supply. </li>
<li>We expect China to have about 15.3 million tons of demand (flattish year over year) in FY24. The stimulus will be crucial for growth in overall copper FY25 demand.</li>
<li>We continue to expand our coverage of pure copper play names, with our favorites being <a href="https://www.smartkarma.com/entities/southern-copper-corp" target="_blank" data-smartkarma-citation="entities:16279:1" rel="noopener">Southern Copper (SCCO US)</a> and <a href="https://www.smartkarma.com/entities/antofagasta-plc" target="_blank" data-smartkarma-citation="entities:21814:1" rel="noopener">Antofagasta PLC (ANTO LN)</a> </li>
</ul>


We expect copper demand to have ended FY24 at around 27.1 million tons (up 4% year over year). FY25 could be an interesting year in which copper demand outstrips supply. 
We expect China to have about 15.3 million tons of demand (flattish year over year) in FY24. The stimulus will be crucial for growth in overall copper FY25 demand.
We continue to expand our coverage of pure copper play names, with our favorites being Southern Copper (SCCO US) and Antofagasta PLC (ANTO LN) 


Copper Tracker 6th Jan 2025: What Lies In Store For The Year

Iron ores are rocks and minerals from which metallic iron can be economically extracted. The ores are usually rich in iron oxides and vary in color from dark grey, bright yellow, deep purple, to rusty red. The iron itself is usually found in the form of magnetite (Fe3O4, 72.4% Fe), hematite (Fe2O3, 69.9% Fe), goethite (FeO(OH), 62.9% Fe), limonite (FeO(OH).n(H2O)) or siderite (FeCO3, 48.2% Fe).

<ul>
<li>We expect iron ore to remain rangebound between 90 and 110 USD/ton in FY25, which is in line with the band it has maintained over the past six months. </li>
<li>Iron ore players like <a href="https://www.smartkarma.com/entities/vale-sa" target="_blank" rel="noopener">Vale (VALE US)</a> and <a href="https://www.smartkarma.com/entities/fortescue-metals-group-ltd" target="_blank" rel="noopener">Fortescue Metals (FMG AU)</a> can maintain high single-digit dividend yields at USD 100/ton. We see short-term opportunities in these names.</li>
<li>For small-cap specialists, check out our research on <a href="https://www.smartkarma.com/insights/fenix-resources-fex-au-positive-developments-at-iron-ridge-and-other-catalysts" target="_blank" rel="noopener">Fenix Resources (FEX AU): Positive Developments At Iron Ridge And Other Catalysts.</a> The company (trailing 5x PE) is poised to triple its production.</li>
</ul>


We expect iron ore to remain rangebound between 90 and 110 USD/ton in FY25, which is in line with the band it has maintained over the past six months. 
Iron ore players like Vale (VALE US) and Fortescue Metals (FMG AU) can maintain high single-digit dividend yields at USD 100/ton. We see short-term opportunities in these names.
For small-cap specialists, check out our research on Fenix Resources (FEX AU): Positive Developments At Iron Ridge And Other Catalysts. The company (trailing 5x PE) is poised to triple its production.


Iron Ore Tracker (6-Jan-2025): What Does the New Year Hold in Store For Iron Ore

Philippine Stock Exchange / Equity Bottom-Up

Philippine Stock Exchange Inc. is a self-regulatory organization that provides a fair, efficient, transparent and orderly market for the buying and selling of securities.

<ul>
<li>In its press release on December 26th, the <a href="https://www.smartkarma.com/entities/philippine-stock-exchange-inc" target="_blank" rel="noopener">Philippine Stock Exchange (PSE PM)</a> detailed two catalysts: acquiring 61.92% of PDS and increasing the listing maintenance fee. </li>
<li>The PDS (Philippine Dealing System) pricing of 2.32 billion pesos for 61.92% implies a 10.5x PE (7.5x PE ex-cash), which will be accretive to earnings despite the cash coming down. </li>
<li>With the 75% increase in the upper limit of listing and maintenance fees and the acquisition, the stock trades at 12-13x PE/7.6% dividend yield and three billion net cash.</li>
</ul>


In its press release on December 26th, the Philippine Stock Exchange (PSE PM) detailed two catalysts: acquiring 61.92% of PDS and increasing the listing maintenance fee. 
The PDS (Philippine Dealing System) pricing of 2.32 billion pesos for 61.92% implies a 10.5x PE (7.5x PE ex-cash), which will be accretive to earnings despite the cash coming down. 
With the 75% increase in the upper limit of listing and maintenance fees and the acquisition, the stock trades at 12-13x PE/7.6% dividend yield and three billion net cash.


Philippine Stock Exchange (PSE PM): A Detailed Analysis Of Two Value Doubling Catalysts

JNBY Design Limited designs, promotes, and sells textile products. The Company offers apparels, footwear, and other accessories for women and children. JNBY Design markets its products globally.

<ul>
<li>Our stock screen for textile/apparel companies listed in Hong Kong for FY24 summarizes the winners and losers. </li>
<li>
<a href="https://www.smartkarma.com/entities/yue-yuen-industrial-holdings-limited" target="_blank" data-smartkarma-citation="entities:12281:1" rel="noopener">Yue Yuen Industrial Holdings (551 HK)</a> / <a href="https://www.smartkarma.com/entities/jnby-design-ltd" target="_blank" data-smartkarma-citation="entities:23642:1" rel="noopener">JNBY Design Ltd (3306 HK)</a> and <a href="https://www.smartkarma.com/entities/stella-international" target="_blank" data-smartkarma-citation="entities:7610:1" rel="noopener">Stella International (1836 HK)</a> were the three best performers with returns of over 80% YTD.</li>
<li>We continue to be bullish on <a href="https://www.smartkarma.com/entities/jnby-design-ltd" target="_blank" data-smartkarma-citation="entities:23642:1" rel="noopener">JNBY Design Ltd (3306 HK)</a> / <a href="https://www.smartkarma.com/entities/pacific-textiles-holdings" target="_blank" data-smartkarma-citation="entities:12638:1" rel="noopener">Pacific Textiles (1382 HK)</a> and like <a href="https://www.smartkarma.com/entities/nameson-holdings-ltd" target="_blank" data-smartkarma-citation="entities:22670:1" rel="noopener">Nameson Holdings (1982 HK)</a> for its rich dividend yield.</li>
</ul>


Our stock screen for textile/apparel companies listed in Hong Kong for FY24 summarizes the winners and losers. 

Yue Yuen Industrial Holdings (551 HK) / JNBY Design Ltd (3306 HK) and Stella International (1836 HK) were the three best performers with returns of over 80% YTD.
We continue to be bullish on JNBY Design Ltd (3306 HK) / Pacific Textiles (1382 HK) and like Nameson Holdings (1982 HK) for its rich dividend yield.


HK-Listed Apparel & Footwear Screener:  Winners and Losers, Picks For 2025

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.

Sameer Taneja
Equity, Bottom-up Analyst
• Investics Research

Water Oasis (1161 HK): Discouraging Dividend, Value Intact

We summarize the results of Water Oasis for FY24. We rationalize the dividend cut and provide color on prospects for FY25 as cash now is 90% of the...

Sameer Taneja

Copper Tracker 6th Jan 2025: What Lies In Store For The Year

We summarize our estimates for copper demand for FY25. Market participants are increasingly bullish on copper, but China's demand must pick up for...

Sameer Taneja

Iron Ore Tracker (6-Jan-2025): What Does the New Year Hold in Store For Iron Ore

We summarize our estimates for iron ore pricing in CY25. We also provide some interesting equity/options-related opportunities for market...

Sameer Taneja

Philippine Stock Exchange (PSE PM): A Detailed Analysis Of Two Value Doubling Catalysts

We highlight two major PSE PM catalysts (the 61.9% acquisition of PDS and the increase in listing maintenance fees) that can double the stock this...

Sameer Taneja

HK-Listed Apparel & Footwear Screener: Winners and Losers, Picks For 2025

We summarize the winners and losers of 2024 for our textile/apparel stock screen. Despite the high returns, stocks are trading at 6-16% dividend...

Sameer Taneja