HK/China Equity Long-Short

Osbert Tang, CFA

Equity Capital Markets

Zhou Liu Fu Jewellery / Equity Capital Markets

<ul>
<li>
<a href="https://www.smartkarma.com/entities/zhou-liu-fu-jewellery-co-ltd" target="_blank" data-smartkarma-citation="entities:43706:1" rel="noopener">Zhou Liu Fu Jewelery Co., Ltd. (6168 HK)</a>'s IPO does not appeal to us, given deteriorating profitability, smaller size, and inferior financials. </li>
<li>Its IPO price of HK$24.0 appears to be fair relative to the peers' valuation, leaving limited upside and downside in the secondary market. </li>
<li>We value the stock at HK$22.5-25.7, based on 20-30% discount to <a href="https://www.smartkarma.com/entities/chow-tai-fook-jewellery-group" target="_blank" data-smartkarma-citation="entities:549:1" rel="noopener">Chow Tai Fook Jewellery (1929 HK)</a>. It is not another <a href="https://www.smartkarma.com/entities/laopu-gold-co-ltd" target="_blank" data-smartkarma-citation="entities:44036:1" rel="noopener">Laopu Gold (6181 HK)</a>. </li>
</ul>



Zhou Liu Fu Jewelery Co., Ltd. (6168 HK)'s IPO does not appeal to us, given deteriorating profitability, smaller size, and inferior financials. 
Its IPO price of HK$24.0 appears to be fair relative to the peers' valuation, leaving limited upside and downside in the secondary market. 
We value the stock at HK$22.5-25.7, based on 20-30% discount to Chow Tai Fook Jewellery (1929 HK). It is not another Laopu Gold (6181 HK). 


Zhou Liu Fu (6168 HK) IPO: Not Our Cup of Tea

APAC IPOs & Placements, Aequitas Research

Nicholas Tan

APAC IPOs & Placements

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/zhou-liu-fu-jewellery-co-ltd" target="_blank" data-smartkarma-citation="entities:43706:1" rel="noopener">Zhou Liu Fu Jewellery Co., Ltd. (1716396D CH)</a> is looking to raise up to $143m in its upcoming Hong Kong IPO.</li>
<li>It is a leading and fast growing jewellery franchise in China offering a diverse range of products through offline and online sales channels.</li>
<li>In this note, we examine the IPO dynamics, and look at the firm’s valuation.</li>
</ul>



Zhou Liu Fu Jewellery Co., Ltd. (1716396D CH) is looking to raise up to $143m in its upcoming Hong Kong IPO.
It is a leading and fast growing jewellery franchise in China offering a diverse range of products through offline and online sales channels.
In this note, we examine the IPO dynamics, and look at the firm’s valuation.


Zhou Liu Fu Pre-IPO: Not Blindingly Cheap but Peer Momentum Is Strong

Thematic (Sector/Industry)

<ul>
<li>The "Buy the worst" basket has outperformed the HSI by a massive 16.7pp YTD, mainly boosted by <a href="https://www.smartkarma.com/entities/chow-tai-fook-jewellery-group" target="_blank" data-smartkarma-citation="entities:549:1" rel="noopener">Chow Tai Fook Jewellery (1929 HK)</a> and <a href="https://www.smartkarma.com/entities/wuxi-apptec" target="_blank" data-smartkarma-citation="entities:23679:1" rel="noopener">Wuxi Biologics (2269 HK)</a>. </li>
<li>The best-performing constituents in 2024, however, lagged behind the HSI, dragged down by <a href="https://www.smartkarma.com/entities/trip-com-group-ltd-23a341d0-4f63-4175-a8c5-ee990906cacd" target="_blank" data-smartkarma-citation="entities:36424:1" rel="noopener">Trip.com Group (9961 HK)</a> and <a href="https://www.smartkarma.com/entities/meituan" target="_blank" data-smartkarma-citation="entities:26970:1" rel="noopener">Meituan (3690 HK)</a>. </li>
<li>Government's consumption boost should benefit <a href="https://www.smartkarma.com/entities/chow-tai-fook-jewellery-group" target="_blank" data-smartkarma-citation="entities:549:1" rel="noopener">Chow Tai Fook Jewellery (1929 HK)</a>, <a href="https://www.smartkarma.com/entities/budweiser-brewing-co-apac-ltd" target="_blank" data-smartkarma-citation="entities:28077:1" rel="noopener">Budweiser Brewing APAC (1876 HK)</a>, and <a href="https://www.smartkarma.com/entities/hang-lung-properties-ltd" target="_blank" data-smartkarma-citation="entities:49:1" rel="noopener">Hang Lung Properties (101 HK)</a> in 2H25.</li>
</ul>


The "Buy the worst" basket has outperformed the HSI by a massive 16.7pp YTD, mainly boosted by Chow Tai Fook Jewellery (1929 HK) and Wuxi Biologics (2269 HK). 
The best-performing constituents in 2024, however, lagged behind the HSI, dragged down by Trip.com Group (9961 HK) and Meituan (3690 HK). 
Government's consumption boost should benefit Chow Tai Fook Jewellery (1929 HK), Budweiser Brewing APAC (1876 HK), and Hang Lung Properties (101 HK) in 2H25.


"Buy the Worst" HSI Strategy: Solid Gains in 1H25

Equity Analyst - Asia Consumer Sector, Investory

Devi Subhakesan

Equity Analyst - Asia Consumer Sector

ASIA CONSUMER: INSIGHTS AND INVESTMENT IDEAS

Investory

Investory is a Singapore-based boutique independent equity research firm founded in January 2017 with a primary focus on consumption themes across Asia-Pacific.

We aim to generate investible ideas based on consumption trends and outlook. We screen our ideas on several parameters - product potential, long-term growth and management commitment being the most critical.  We follow a fundamental analysis approach in our stock selection process and are not restricted by market cap.

We aspire to grow into a leading source of unbiased research, free of conflict of interest, for investors yearning for independent and disciplined analysis. 

We also undertake bespoke research mandates to support our Institutional clients’ investment needs.

Our team comprises of professionals with extensive experience in the Asian equity markets, in areas ranging from research, servicing institutional clients and investment management.

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pop-mart-international-group-l" target="_blank" data-smartkarma-citation="entities:29016:1" rel="noopener">Pop Mart International Group (9992 HK)</a>  opened its first dedicated jewellery concept store, POPOP, in Shanghai last Friday, featuring accessories based on its best-selling characters like Labubu, Molly, and Skullpanda.</li>
<li>The jewellery line represents a natural, high-return extension of Pop Mart’s brand. If scaled successfully, it could support overall revenue growth, enhance group margins, and contribute to higher returns.</li>
<li>Expect high margin, high return casual jewellery business to support growth and uplift margins going forward and  lead to analyst upgrades to future revenues/earnings. </li>
</ul>



Pop Mart International Group (9992 HK)  opened its first dedicated jewellery concept store, POPOP, in Shanghai last Friday, featuring accessories based on its best-selling characters like Labubu, Molly, and Skullpanda.
The jewellery line represents a natural, high-return extension of Pop Mart’s brand. If scaled successfully, it could support overall revenue growth, enhance group margins, and contribute to higher returns.
Expect high margin, high return casual jewellery business to support growth and uplift margins going forward and  lead to analyst upgrades to future revenues/earnings. 


Pop Mart (9992 HK): Beyond Blind Boxes -Jewellery Debut. Stock Up 200% YTD. Is It Still a Buy?

HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

<ul>
<li>The performance slowdown and decrease in number of newly opened stores from 2023 to 2024 was due to the rapid surge in gold prices,which would put franchise model at risk.</li>
<li>Future performance of Zhou Liu Fu may not be benefit from the high gold prices, but could be under pressure due to rising raw material costs and reduced customer demand.</li>
<li>Valuation of Zhou Liu Fu could be lower than peers and the industry average. A comfortable P/E range could be 10-15x if based on 2025 net profit.</li>
</ul>


The performance slowdown and decrease in number of newly opened stores from 2023 to 2024 was due to the rapid surge in gold prices,which would put franchise model at risk.
Future performance of Zhou Liu Fu may not be benefit from the high gold prices, but could be under pressure due to rising raw material costs and reduced customer demand.
Valuation of Zhou Liu Fu could be lower than peers and the industry average. A comfortable P/E range could be 10-15x if based on 2025 net profit.


Pre-IPO Zhou Liu Fu Jewellery (PHIP Updates) - Some Points Worth the Attention

Hong Kong

Chow Tai Fook Jewellery Group Limited retails jewelry.  The Company sells rings, necklaces, earrings, pendants, bracelets, and small statues.  Chow Tai Fook Jewellery operates retail stores in China, Hong Kong, Macau, Taiwan, Malaysia, and Singapore.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Chow Tai Fook Jewellery (1929 HK)

Zhou Liu Fu (6168 HK) IPO: Not Our Cup of Tea

Zhou Liu Fu Jewelery's IPO lacks appeal due to declining profitability, smaller size, and weaker financials, with limited upside and downside in...

Osbert Tang, CFA

Zhou Liu Fu Pre-IPO: Not Blindingly Cheap but Peer Momentum Is Strong

Zhou Liu Fu is looking to raise up to $143m in its upcoming Hong Kong IPO. In this note, we examine the IPO dynamics, and look at the firm’s...

Nicholas Tan

"Buy the Worst" HSI Strategy: Solid Gains in 1H25

The "Buy the worst" basket outperformed the HSI by 16.7pp YTD, boosted by Chow Tai Fook and Wuxi Biologics, while top performers in 2024 lagged,...

Osbert Tang, CFA

Pop Mart (9992 HK): Beyond Blind Boxes -Jewellery Debut. Stock Up 200% YTD. Is It Still a Buy?

Pop Mart offers investors with high risk appetite and long term conviction, a growth story that’s still unfolding. Valuation multiples are rich but...

Devi Subhakesan

Pre-IPO Zhou Liu Fu Jewellery (PHIP Updates) - Some Points Worth the Attention

Rapid surge in gold prices poses risk to Zhou Liu Fu's franchise model. The future performance may suffer from rising raw material costs and...

Xinyao (Criss) Wang

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Zhou Liu Fu (6168 HK) IPO: Not Our Cup of Tea

​Zhou Liu Fu Jewelery's IPO lacks appeal due to declining profitability, smaller size, and weaker financials, with limited upside and downside in...

Osbert Tang, CFA

Zhou Liu Fu Pre-IPO: Not Blindingly Cheap but Peer Momentum Is Strong

Zhou Liu Fu is looking to raise up to $143m in its upcoming Hong Kong IPO. In this note, we examine the IPO dynamics, and look at the firm’s...

Nicholas Tan

"Buy the Worst" HSI Strategy: Solid Gains in 1H25

​The "Buy the worst" basket outperformed the HSI by 16.7pp YTD, boosted by Chow Tai Fook and Wuxi Biologics, while top performers in 2024 lagged,...

Osbert Tang, CFA

Pop Mart (9992 HK): Beyond Blind Boxes -Jewellery Debut. Stock Up 200% YTD. Is It Still a Buy?

Pop Mart offers investors with high risk appetite and long term conviction, a growth story that’s still unfolding. Valuation multiples are rich but...

Devi Subhakesan

Pre-IPO Zhou Liu Fu Jewellery (PHIP Updates) - Some Points Worth the Attention

​Rapid surge in gold prices poses risk to Zhou Liu Fu's franchise model. The future performance may suffer from rising raw material costs and...

Xinyao (Criss) Wang

Zhou Liu Fu Jewelery's IPO lacks appeal due to declining profitability, smaller size, and weaker financials, with limited upside and downside in...

The "Buy the worst" basket outperformed the HSI by 16.7pp YTD, boosted by Chow Tai Fook and Wuxi Biologics, while top performers in 2024 lagged,...

Rapid surge in gold prices poses risk to Zhou Liu Fu's franchise model. The future performance may suffer from rising raw material costs and...