Investor hunting for undervalued gems, Pretium Consulting

Jay Ju

Investor hunting for undervalued gems

Equity Bottom-Up

Him International Music / Equity Bottom-Up

This insight was first published on Seeking Alpha by ValuePlusCatalyst on19th October. The research was a collaboration between the author and Jay Ju and he has gotten the author's permission to publish this insight on Smartkarma.As the Chinese government increasingly cracks down on piracy and the streaming revolution further accelerates, the Chinese music industry has been growing at a 35-40% CAGR. We think the market has overlooked <a href="https://www.smartkarma.com/entities/9174" target="_blank" data-smartkarma-citation="entities:9174:1">HiM International Music Inc (8446 TT)</a> as it has limited sell-side coverage and non-linear earnings growth potential that is not easy to predict. <ul class=""><li>No pure-play in the market except HiM: music platforms account for tiny portions of Tencent, Alibaba, and NetEase. Vivendi's UMG is US/EU focused and complicated. </li><li>Premier Asset: HiM is widely considered to be one of the elite companies in Chinese music with one of the highest regarded management teams and ranks just behind the Big3.</li><li>Low Valuation: ~10x 2018 ex-cash and invest. prop P/E vs. 19-20x ex-cash 2018 P/E for Asian and US/EU comps. HiM could appreciate &gt;4.5 x by 2025 based on industry growth.</li><li>Clear Catalyst: IP contract renewals in March 2018 to drive 50%+ increase in 2018 EPS. Recent IP-licensing comp by competitor points to 3-4x 2017 EPS. Trophy asset with strategic value.</li></ul>

This insight was first published on Seeking Alpha by ValuePlusCatalyst on19th October. The research was a collaboration between the author and Jay Ju and he has gotten the author's permission to publish this insight on Smartkarma.As the Chinese government increasingly cracks down on piracy and the streaming revolution further accelerates, the Chinese music industry has been growing at a 35-40% CAGR. We think the market has overlooked HiM International Music Inc (8446 TT) as it has limited sell-side coverage and non-linear earnings growth potential that is not easy to predict. No pure-play in the market except HiM: music platforms account for tiny portions of Tencent, Alibaba, and NetEase. Vivendi's UMG is US/EU focused and complicated. Premier Asset: HiM is widely considered to be one of the elite companies in Chinese music with one of the highest regarded management teams and ranks just behind the Big3.Low Valuation: ~10x 2018 ex-cash and invest. prop P/E vs. 19-20x ex-cash 2018 P/E for Asian and US/EU comps. HiM could appreciate &gt;4.5 x by 2025 based on industry growth.Clear Catalyst: IP contract renewals in March 2018 to drive 50%+ increase in 2018 EPS. Recent IP-licensing comp by competitor points to 3-4x 2017 EPS. Trophy asset with strategic value.

HiM International Music - Music IP Content Player with Potential to Become a Multi-Bagger

Taiwan

HIM International Music Inc. is an independent record label and artist management company.

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Him International Music (8446 TT)

HiM International Music - Music IP Content Player with Potential to Become a Multi-Bagger

This insight was first published on Seeking Alpha by ValuePlusCatalyst on19th October. The research was a collaboration between the author and Jay...

Jay Ju

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