Research from Asian Century Stocks, Asian Century Stocks

Michael Fritzell

Research from Asian Century Stocks

Providing financial journalism in the Asia-Pacific

Asian Century Stocks

Asian Century Stocks is a newsletter providing financial journalism for companies and stocks in the Asia-Pacific. 
The Asian Century Stocks logotype “百” stands for “one hundred” or a “century”. The economic centre of gravity is moving towards Asia. Yet most global investors are missing out.

Equity Bottom-Up

<ul><li>Golden Throat (6896 HK — US$343 million) is an iconic Chinese brand of throat lozenges, used to deal with sore or dry throats.</li><li>The core product is similar to Strepsils, Halls, or Ricola, but is sold over-the-counter in pharmacies.</li><li>The company sells 146 million boxes per year and has an estimated market share of 26% in China.</li></ul>

Golden Throat (6896 HK — US$343 million) is an iconic Chinese brand of throat lozenges, used to deal with sore or dry throats.The core product is similar to Strepsils, Halls, or Ricola, but is sold over-the-counter in pharmacies.The company sells 146 million boxes per year and has an estimated market share of 26% in China.

Golden Throat (6896 HK): China’s Leading Lozenge Maker at 10x P/E and a 10% Dividend Yield

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>You might have to go all the back to <a href="https://www.smartkarma.com/entities/guoco-group-ltd" target="_blank" data-smartkarma-citation="entities:5290:1" rel="noopener">Guoco Group Ltd (53 HK)</a>'s 2012/2013 unconditional cash offer, which was ostensibly blocked by First Eagle AND Elliott Advisors.</li>
<li>Otherwise, it's slim pickings. Past Schemes or Tender Offers arguably failed as minorities were simply not supportive. There are exceptions, like <a href="https://www.smartkarma.com/entities/soho-china-ltd" target="_blank" data-smartkarma-citation="entities:4123:1" rel="noopener">Soho China (410 HK)</a> and <a href="https://www.smartkarma.com/entities/china-traditional-chinese-medicine" target="_blank" data-smartkarma-citation="entities:351:1" rel="noopener">TCM (570 HK)</a>
</li>
<li>IF LVC wish to remain active in this space/region, they appear to be going about it in a counterproductive way. I still don't understand why they would want to block.</li>
</ul>


You might have to go all the back to Guoco Group Ltd (53 HK)'s 2012/2013 unconditional cash offer, which was ostensibly blocked by First Eagle AND Elliott Advisors.
Otherwise, it's slim pickings. Past Schemes or Tender Offers arguably failed as minorities were simply not supportive. There are exceptions, like Soho China (410 HK) and TCM (570 HK)

IF LVC wish to remain active in this space/region, they appear to be going about it in a counterproductive way. I still don't understand why they would want to block.


Henlius (2696 HK): So, When Was The Last Time A PE/VC Outfit Blocked A Deal?

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Douglas Research Advisory

<ul>
<li>Golden Throat Holdings is a gem. It has excellent fundamentals including an eye-catching dividend yield (17.9% in 2023) and a blistering DPS growth (10x from 2020 to 2023). </li>
<li>It also benefits from a compelling long-term theme (relieving sore throats caused by worsening air quality/smog/fine dust problems along with recurrent regular cold/flu symptoms among millions of people in China). </li>
<li>Golden Throat Holdings is one of the leading throat lozenges manufacturers in China. Its net margin averaged 24% from 2019 to 2023.</li>
</ul>


Golden Throat Holdings is a gem. It has excellent fundamentals including an eye-catching dividend yield (17.9% in 2023) and a blistering DPS growth (10x from 2020 to 2023). 
It also benefits from a compelling long-term theme (relieving sore throats caused by worsening air quality/smog/fine dust problems along with recurrent regular cold/flu symptoms among millions of people in China). 
Golden Throat Holdings is one of the leading throat lozenges manufacturers in China. Its net margin averaged 24% from 2019 to 2023.


Asian Dividend Gems: Golden Throat Holdings

<ul>
<li>Schemes In HK can and will fail. But rarely like <a href="https://www.smartkarma.com/entities/golden-throat-holdings-group" target="_blank" data-smartkarma-citation="entities:22664:1" rel="noopener">Golden Throat (6896 HK)</a> did. And not one that was ostensibly pitched at a fair price. </li>
<li>A staggering 55.656mn or 68.875% of Disinterested Shareholders in person or via proxy voted <a href="https://www1.hkexnews.hk/listedco/listconews/sehk/2021/1130/2021113001688.pdf" target="_blank" rel="noopener">against</a> the Scheme. That's also ~7.5% of total shares out. </li>
<li>There was insider trading on the 5 August. Shares declined 6% in two trading days ahead of the vote. Plus 68mn shares moved out of CCASS. Something is not right.</li>
</ul>


Schemes In HK can and will fail. But rarely like Golden Throat (6896 HK) did. And not one that was ostensibly pitched at a fair price. 
A staggering 55.656mn or 68.875% of Disinterested Shareholders in person or via proxy voted against the Scheme. That's also ~7.5% of total shares out. 
There was insider trading on the 5 August. Shares declined 6% in two trading days ahead of the vote. Plus 68mn shares moved out of CCASS. Something is not right.


Golden Throat (6896 HK): This One Left A Bitter Aftertaste

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>Almost a year in, Changhong Group has yet to secure the regulatory approvals for its HK$1.223 scheme offer for <a href="https://www.smartkarma.com/entities/changhong-jiahua-holdings-ltd" target="_blank" data-smartkarma-citation="entities:5849:1" rel="noopener">Changhong Jiahua (3991 HK)</a>.</li>
<li>The offer will be effectively blocked, not by a Sichuan NDRC/Commerce rejection with stated reasons, but by the approval process failing to conclude by the 20 September long stop date.</li>
<li>On a deal break, I expect little-to-no downside due to improving fundamentals, significant peer re-rating and significant discount to the undisturbed price. </li>
</ul>


Almost a year in, Changhong Group has yet to secure the regulatory approvals for its HK$1.223 scheme offer for Changhong Jiahua (3991 HK).
The offer will be effectively blocked, not by a Sichuan NDRC/Commerce rejection with stated reasons, but by the approval process failing to conclude by the 20 September long stop date.
On a deal break, I expect little-to-no downside due to improving fundamentals, significant peer re-rating and significant discount to the undisturbed price. 


Changhong Jiahua (3991 HK): The Upcoming Long Stop Date Sets the Pretext for a Deal Break

China

Golden Throat Holdings Group Co Ltd manufactures and sells pharmaceutical, healthcare food, and other products. Its flagship product is Golden Throat Lozenges (OTC), an over-the-counter medicine designed to relieve symptoms of sore and dry throat and hoarse voice caused by acute pharyngitis. The company also offers a range of lozenge series products and other healthcare items. It was founded in 1956 and is headquartered in Liuzhou, People's Republic of China.

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Golden Throat (6896 HK)