Devi Subhakesan

Investory

Equity Bottom-Up

<ul>
<li>Highly leveraged Balance sheet and a USD350 mn bridge loan that needs refinancing, amidst rising interest rates, have alarmed investors, thus driving <a href="https://www.smartkarma.com/entities/health-and-happiness-h-h-int" target="_blank" data-smartkarma-citation="entities:20582:1" rel="noopener">Health And Happiness (H&amp;H) (1112 HK)</a> stock south.</li>
<li>With its core Baby nutrition segment sales declining and Adult, Pet nutrition still in ramp up phase, the going has been tough for H&amp;H as operating margins weakened.</li>
<li>Even as its near term concerns seem daunting, long term prospects are good with a diversified premium-brand portfolio that can moderate long term risk to growth from declining birth rate.</li>
</ul>

Henry Soediarko

CrossASEAN Research

<ul>
<li>FY 2021 was a difficult period for <a href="https://www.smartkarma.com/entities/health-and-happiness-h-h-int" target="_blank" data-smartkarma-citation="entities:20582:1" rel="noopener">Health And Happiness (H&amp;H) (1112 HK)</a> with the lower than usual sales growth and a big one-off expenses. </li>
<li>It is true that the D/E ratio has gone up to 161% but this is not the first time it happened. </li>
<li>FCF/Sales remain at low double-digit and cash/TA is also at low double-digit so it is far from going bust.</li>
</ul>

Xinyao (Criss) Wang

<ul>
<li>H&amp;H is faced with multiple challenges. Internally, the performance is under pressure, with stagnating revenue, decreasing profits, cash flow shortage and bankruptcy risk.It's difficult for H&amp;H to turn things around.</li>
<li>Externally, factors such as the declining birth rate, lower demand, fierce competition in the infant formulas market, rising costs due to inflation, and economic slowdown worsen the Company's prospects.</li>
<li>Based on our 2022 forecast (14% or lower adjusted EBITDA margin,1%-2% or flat revenue growth), we do not think H&amp;H is a good investment. We are conservative about its outlook.</li>
</ul>

Charles Macgregor

Lucror Analytics

Credit

<p>Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.</p><ul><li><a href='#lucror-entity-10675'>Honghua Group</a></li><li><a href='#lucror-entity-8108'>Hopson Development</a></li><li><a href='#lucror-entity-12763'>Tata Motors ADR</a></li></ul>

<p>Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.</p><ul><li><a href='#lucror-entity-479'>Evergrande</a></li><li><a href='#lucror-entity-21047'>Ronshine China Holdings</a></li><li><a href='#lucror-entity-240'>Sunac China Holdings</a></li><li><a href='#lucror-entity-26178'>Zhenro Properties</a></li></ul>

China

Health and Happiness H&H International Holdings Ltd provides health care supplements. The Company offers pediatric nutritional and baby care products. Health and Happiness H&H International Holdings serves nutrition and wellness industries worldwide.

Health And Happiness (H&H) - 1112 HK

Description