HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/softcare-limited" target="_blank" data-smartkarma-citation="entities:44292:1" rel="noopener">Softcare (2698 HK)</a>'s IPO price was fixed at HK$26.20, or 16.4x FY26F PER, with overwhelming positive responses in both the Hong Kong IPO and international offer. </li>
<li>We calculate its fair value at HK$26.07-29.43, based on a 50% premium to <a href="https://www.smartkarma.com/entities/hengan-international-group-co-ltd" target="_blank" data-smartkarma-citation="entities:29:1" rel="noopener">Hengan International Group (1044 HK)</a> and a 20% discount to the US peers, leaving limited upside.</li>
<li>Its tiny public shareholder ownership (15%) and the potential of being an M&amp;A target will elevate its valuations. However, anything above the US peers (i.e. 20.5x PER) is expensive. </li>
</ul>



Softcare (2698 HK)'s IPO price was fixed at HK$26.20, or 16.4x FY26F PER, with overwhelming positive responses in both the Hong Kong IPO and international offer. 
We calculate its fair value at HK$26.07-29.43, based on a 50% premium to Hengan International Group (1044 HK) and a 20% discount to the US peers, leaving limited upside.
Its tiny public shareholder ownership (15%) and the potential of being an M&amp;A target will elevate its valuations. However, anything above the US peers (i.e. 20.5x PER) is expensive. 


Softcare (2698 HK): Where Should It Be Traded?

External broker reports(aggregated public sources), Axis Direct

Axis Direct

External broker reports(aggregated public sources)

Axis Direct is the flagship brand under Axis Securities Limited, a subsidiary of Axis Bank in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Thematic (Sector/Industry)

<ul><li>The FMCG sector stands at the cusp of a structural reset as the GST Council rolls out GST 2.0.</li><li>The reform simplifies the existing four-tier structure (5%/12%/18%/28% + cess) into two slabs – 5% and 18% – with a 40% rate reserved for sin and luxury goods.</li><li>Effective 22nd September, 2025, the timing ahead of the festive season is expected to spur affordability and lift consumption.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

The FMCG sector stands at the cusp of a structural reset as the GST Council rolls out GST 2.0.The reform simplifies the existing four-tier structure (5%/12%/18%/28% + cess) into two slabs – 5% and 18% – with a 40% rate reserved for sin and luxury goods.Effective 22nd September, 2025, the timing ahead of the festive season is expected to spur affordability and lift consumption.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Consumption Sector - GST 2.0: Powers the Next Leg of Growth and Reshapes the FMCG Landscape

Founder at Stock Spin-off Investing, Stock Spin-Off Investing

Richard Howe

Founder at Stock Spin-off Investing

Stock Spin-Off Investing

Generate attractive returns by taking advantage of inefficiencies in the stock spin-off market.

Stock Spin-offs

Event-Driven

<ul><li>First, I sold out of Kenvue (KVUE) when the stock surged earlier this week. We locked in a nice 18% total return. </li><li>Kenvue and its consumer healthcare peers Haleon (HLN), Proctor &amp; Gamble (PG) and Colgate-Palmolive (CL), have all been strong given their defensive nature in a volatile market.</li><li>I still believe that Kenvue (KVUE) is a solid company with 15% upside potential, but I have higher conviction in my other recommendations.</li></ul>

First, I sold out of Kenvue (KVUE) when the stock surged earlier this week. We locked in a nice 18% total return. Kenvue and its consumer healthcare peers Haleon (HLN), Proctor &amp; Gamble (PG) and Colgate-Palmolive (CL), have all been strong given their defensive nature in a volatile market.I still believe that Kenvue (KVUE) is a solid company with 15% upside potential, but I have higher conviction in my other recommendations.

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

<ul>
<li>Constituent changes to the <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 INDEX</a> and capping changes will result in a round-trip trade of US$15.9bn across the Select Sector indices and the S&amp;P500 Equal Weight Index.</li>
<li>The Select Sector index trackers and <a href="https://www.smartkarma.com/entities/invesco-s-p-500-equal-weight-e" target="_blank" data-smartkarma-citation="entities:32932:1" rel="noopener">S&amp;P 500 Equal Weight</a> trackers will need to buy <a href="https://www.smartkarma.com/entities/apollo-global-management-inc" target="_blank" data-smartkarma-citation="entities:28770:1" rel="noopener">Apollo Global Management</a> and <a href="https://www.smartkarma.com/entities/workday-inc-class-a" target="_blank" data-smartkarma-citation="entities:5660:1" rel="noopener">Workday</a>, adding to the buying from <a href="https://www.smartkarma.com/entities/s-p-500-index" target="_blank" data-smartkarma-citation="entities:22886:1" rel="noopener">S&amp;P 500 INDEX</a> trackers.</li>
<li>The flows will change over the next week as stock prices move around and final capping is done after the close on 13 December.</li>
</ul>


Constituent changes to the S&amp;P 500 INDEX and capping changes will result in a round-trip trade of US$15.9bn across the Select Sector indices and the S&amp;P500 Equal Weight Index.
The Select Sector index trackers and S&amp;P 500 Equal Weight trackers will need to buy Apollo Global Management and Workday, adding to the buying from S&amp;P 500 INDEX trackers.
The flows will change over the next week as stock prices move around and final capping is done after the close on 13 December.


Select Sector Indices and S&P Equal Weight Rebalance: US$16bn Trade; More Buying for APO and WDAY

Independent research on the U.S. markets, Baptista Research

Baptista Research

Independent research on the U.S. markets

Baptista Research is an independent financial research house focused on the U.S. markets. We provide equity research as well as credit research reports on the top-listed U.S. companies with most of our focus on technology, consumer goods and services, automobiles, industrials, oil and gas, pharma, and healthcare. Our research has served more than 3000 institutional investors including mutual funds, hedge funds, banks, family offices, and various buy-side firms. We operate a research subscription service where institutions, as well as retail investors, can have priority access to all our research. We also have a wide distribution of our research reports across some of the top global financial platforms. Apart from equity research and credit research, we also provide advisory services with respect to mergers & acquisitions (M&A), private equity/ venture capital fundraising, valuation reports, and investment management services for corporates.
Baptista Research is owned and managed by Ishan Majumdar, an ex-Venture Capitalist/ Investment Banker, a Chartered Accountant, and a Masters’ degree holder in Management from HEC Paris. Ishan has nearly a decade of experience in Mergers and Acquisitions, Leveraged Buyouts (LBOs), Venture Capital Investing, Corporate Strategy, and Valuation in front-office roles at the likes of BNP Paribas CIB, Credit Agricole CIB, Groupe Danone, and TIW Private Equity. He has worked on and closed multiple acquisition deals, leveraged buyouts, and start-up investment transactions.

<ul><li>Colgate-Palmolive's third quarter of 2024 earnings report and discussions provide both promising facets and areas of concern.</li><li>The positive result of this report is primarily reflected in the consistent top and bottom-line growth that the company managed to achieve.</li><li>This quarter marked another period of strong volume-led organic sales expansion, with substantial contributions from both developed and emerging markets which grew at rates of 3% and 4.6% respectively.</li></ul>

Colgate-Palmolive's third quarter of 2024 earnings report and discussions provide both promising facets and areas of concern.The positive result of this report is primarily reflected in the consistent top and bottom-line growth that the company managed to achieve.This quarter marked another period of strong volume-led organic sales expansion, with substantial contributions from both developed and emerging markets which grew at rates of 3% and 4.6% respectively.

Colgate-Palmolive Company: Will Its Innovation & Market Adaptation in Latin America Bring A Shift In The Competitive Dynamics?  - Major Drivers

United States

Colgate-Palmolive Company is a consumer products company that markets its products throughout the world.  The Company's products include toothpaste, toothbrushes, shampoos, deodorants, bar and liquid soaps, dishwashing liquid, and laundry products, as well as pet nutrition products for cats and dogs.

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Colgate Palmolive Co (CL US)

Softcare (2698 HK): Where Should It Be Traded?

Softcare's IPO price was fixed at HK$26.20, with positive responses. Fair value is HK$26.07-29.43, and limited upside is expected. Small free...

Osbert Tang, CFA

Consumption Sector - GST 2.0: Powers the Next Leg of Growth and Reshapes the FMCG Landscape

The reform simplifies the existing four-tier structure (5%/12%/18%/28% + cess) into two slabs – 5% and 18% – with a 40% rate reserved for sin and...

Axis Direct

Weekly Update (CON, UNTC, KVUE, TSVT)

First, I sold out of Kenvue (KVUE) when the stock surged earlier this week. We locked in a nice 18% total return. Kenvue and its consumer...

Richard Howe

Select Sector Indices and S&P Equal Weight Rebalance: US$16bn Trade; More Buying for APO and WDAY

Constituent changes to the SPX and capping changes result in a round-trip trade of US$15.9bn. Apollo Global, Workday, Exxon and McDonald's are...

Brian Freitas

Colgate-Palmolive Company: Will Its Innovation & Market Adaptation in Latin America Bring A Shift In The Competitive Dynamics? - Major Drivers

Colgate-Palmolive's third quarter of 2024 earnings report and discussions provide both promising facets and areas of concern. The positive result...

Baptista Research

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52-week Range

Market Cap (USDm)

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Softcare (2698 HK): Where Should It Be Traded?

​Softcare's IPO price was fixed at HK$26.20, with positive responses. Fair value is HK$26.07-29.43, and limited upside is expected. Small free...

Osbert Tang, CFA

Consumption Sector - GST 2.0: Powers the Next Leg of Growth and Reshapes the FMCG Landscape

The reform simplifies the existing four-tier structure (5%/12%/18%/28% + cess) into two slabs – 5% and 18% – with a 40% rate reserved for sin and...

Axis Direct

Weekly Update (CON, UNTC, KVUE, TSVT)

First, I sold out of Kenvue (KVUE) when the stock surged earlier this week. We locked in a nice 18% total return. Kenvue and its consumer...

Richard Howe

Select Sector Indices and S&P Equal Weight Rebalance: US$16bn Trade; More Buying for APO and WDAY

Constituent changes to the SPX and capping changes result in a round-trip trade of US$15.9bn. Apollo Global, Workday, Exxon and McDonald's are...

Brian Freitas

Colgate-Palmolive Company: Will Its Innovation & Market Adaptation in Latin America Bring A Shift In The Competitive Dynamics? - Major Drivers

Colgate-Palmolive's third quarter of 2024 earnings report and discussions provide both promising facets and areas of concern. The positive result...

Baptista Research

Softcare's IPO price was fixed at HK$26.20, with positive responses. Fair value is HK$26.07-29.43, and limited upside is expected. Small free...