Greater China Equity Long/Short Analyst

Eric Chen

Equity Bottom-Up

<ul>
<li>We believe the company is well positioned in China's rapidly growing pizza market thanks to its strong brand and superior store economics. </li>
<li>Despite stock rally post 1H23 results, market still underestimates its earnings for both near and long term. We expect RMB250 million net profit for 2024 versus break-even by consensus.  </li>
<li>History suggests DPC Dash has recipe for attractive stock return driven by its highly visible growth that can shield it from macro situations, which is desperately needed by China investors.  </li>
</ul>


We believe the company is well positioned in China's rapidly growing pizza market thanks to its strong brand and superior store economics. 
Despite stock rally post 1H23 results, market still underestimates its earnings for both near and long term. We expect RMB250 million net profit for 2024 versus break-even by consensus.  
History suggests DPC Dash has recipe for attractive stock return driven by its highly visible growth that can shield it from macro situations, which is desperately needed by China investors.  


DPC Dash (1405 HK): Recipe for Multibagger

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>Domino's Pizza had a mixed quarter.</li><li>The company's revenues were below Wall Street expectations but its operating income margin increased by 100 basis points year-over-year resulting in an earnings beat.</li><li>In the first quarter, Domino's international company opened 143 new stores while closing 37 others, totaling 106 net new stores.</li></ul>

Domino's Pizza had a mixed quarter.The company's revenues were below Wall Street expectations but its operating income margin increased by 100 basis points year-over-year resulting in an earnings beat.In the first quarter, Domino's international company opened 143 new stores while closing 37 others, totaling 106 net new stores.

Domino's Pizza Inc.: Store Additions Continue To Drive Growth – Key Drivers

Equity Analyst, LightStream Research

Oshadhi Kumarasiri

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

<ul>
<li>The exclusive master franchisee of Domino's Pizza in mainland China, Hong Kong and Macau, DPC Dash’s IPO opened for subscriptions today at a price range of HK$ 46.0-55.0 per share.</li>
<li>The IPO valuation is not particularly enticing to lure us as we don’t think it's at a sufficient discount to <a href="https://www.smartkarma.com/entities/yum-china-holdings-inc-0533692c-6dae-4014-baa1-ed0b050638f2" target="_blank" data-smartkarma-citation="entities:29259:1" rel="noopener">Yum China Holdings Inc (9987 HK)</a>’s multiples.</li>
<li>
<a href="https://www.smartkarma.com/entities/dpc-dash-ltd" target="_blank" data-smartkarma-citation="entities:36556:1" rel="noopener">DPC Dash (1405 HK)</a> is also relatively more expensive than <a href="https://www.smartkarma.com/entities/domino-s-pizza-inc" target="_blank" data-smartkarma-citation="entities:6436:1" rel="noopener">Domino's Pizza (DPZ US)</a> master franchisees in other regions.</li>
</ul>


The exclusive master franchisee of Domino's Pizza in mainland China, Hong Kong and Macau, DPC Dash’s IPO opened for subscriptions today at a price range of HK$ 46.0-55.0 per share.
The IPO valuation is not particularly enticing to lure us as we don’t think it's at a sufficient discount to Yum China Holdings Inc (9987 HK)’s multiples.

DPC Dash (1405 HK) is also relatively more expensive than Domino's Pizza (DPZ US) master franchisees in other regions.


DPC Dash IPO Valuation: Looks Expensive Cf. Yum China & Dominos Master Franchisees in Other Regions

Head of Research, IPOs & Placements, Aequitas Research

Sumeet Singh

Head of Research, 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/dpc-dash-ltd" target="_blank" data-smartkarma-citation="entities:36556:1" rel="noopener">DPC Dash (1405 HK)</a> is now looking to raise up to US$90m, after having shelved its last attempt to raise around US$75m in its Hong Kong IPO in December.</li>
<li>The company is the exclusive master franchisee for Domino’s Pizza in China, HK and Macau. DPC operated 604 stores across 17 cities, as of Feb 2023.</li>
<li>In this note, we run the deal through our ECM framework and talk about valuations.</li>
</ul>



DPC Dash (1405 HK) is now looking to raise up to US$90m, after having shelved its last attempt to raise around US$75m in its Hong Kong IPO in December.
The company is the exclusive master franchisee for Domino’s Pizza in China, HK and Macau. DPC operated 604 stores across 17 cities, as of Feb 2023.
In this note, we run the deal through our ECM framework and talk about valuations.


DPC Dash IPO - Might Be Worth a Small Slice

<ul><li>Domino's gave a mixed performance in the last quarter as its revenues were below par after facing significant challenges in the U.S.</li><li>The carryout business of the company continues to be its core strength.</li><li>In light of the permitting as well as store construction supply challenges it faced, a deceleration in growth was expected.</li></ul>

Domino's gave a mixed performance in the last quarter as its revenues were below par after facing significant challenges in the U.S.The carryout business of the company continues to be its core strength.In light of the permitting as well as store construction supply challenges it faced, a deceleration in growth was expected.

United States

Domino's Pizza, Inc. operates a network of Company-owned and franchise Domino's Pizza stores, located throughout the United States and in other countries.  The Company also operates regional dough manufacturing and distribution centers in the contiguous United States and outside the United States.

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Domino's Pizza (DPZ US)

DPC Dash (1405 HK): Recipe for Multibagger

We believe the company has the right recipe to become another multibagger in China's catering sector thanks to its strong brand and superior store...

Eric Chen

Domino's Pizza Inc.: Store Additions Continue To Drive Growth – Key Drivers

Domino's Pizza had a mixed quarter. The company's revenues were below Wall Street expectations but its operating income margin increased by 100...

Baptista Research

DPC Dash IPO Valuation: Looks Expensive Cf. Yum China & Dominos Master Franchisees in Other Regions

The exclusive master franchisee of Domino's Pizza in mainland China, Hong Kong and Macau, DPC Dash’s IPO opened for subscriptions today at a price...

Oshadhi Kumarasiri

DPC Dash IPO - Might Be Worth a Small Slice

DPC Dash (1405 HK) is now looking to raise up to US$90m, after having shelved its last attempt to raise around US$75m in its Hong Kong IPO in...

Sumeet Singh

Domino's Pizza Inc.: Major Drivers

Domino's gave a mixed performance in the last quarter as its revenues were below par after facing significant challenges in the U.S. The carryout...

Baptista Research

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