HK/China Healthcare Analyst (ex-Fosun Pharma)

Xinyao (Criss) Wang

Equity Capital Markets

Pu'er Lancang Ancient Tea / Equity Capital Markets

<ul>
<li>Traditional tea companies are rarely seen in China's secondary market. The most significant issue in the domestic tea industry is product standardization, leading to obvious bottlenecks in future revenue/profit scale. </li>
<li>Despite increasing investment in sales/marketing, financial results of Lancang haven’t shown much improvement. Sales of 1966 products would continue to be under pressure due to weak demand during economic downturn.</li>
<li>Lancang’s financial performance is unsatisfactory, with declining revenue growth and profit margin. We are not optimistic about the Company's prospects. Valuation should be lower than <a href="https://www.smartkarma.com/entities/nayuki-holdings" target="_blank" data-smartkarma-citation="entities:32149:1" rel="noopener">Nayuki Holdings (2150 HK).</a>
</li>
</ul>


Traditional tea companies are rarely seen in China's secondary market. The most significant issue in the domestic tea industry is product standardization, leading to obvious bottlenecks in future revenue/profit scale. 
Despite increasing investment in sales/marketing, financial results of Lancang haven’t shown much improvement. Sales of 1966 products would continue to be under pressure due to weak demand during economic downturn.
Lancang’s financial performance is unsatisfactory, with declining revenue growth and profit margin. We are not optimistic about the Company's prospects. Valuation should be lower than Nayuki Holdings (2150 HK).



Pre-IPO Pu'er Lancang Ancient Tea (PHIP Updates) - Lack of Product Standardization Is the Pain Point

Head of Research, Krungthai XSpring

Waraporn Wiboonkanarak

Head of Research

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Krungthai XSpring

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Equity Bottom-Up

<ul><li>The SET Index is expected to gain, with the support at 1,660/1,652 points and the resistance at 1,680/1,690 points.</li><li>Technically, the index is likely to rebound after it was able to close above the support at 1,670 points and stayed above the 10-day moving average.</li><li>Tactically, investors are suggested to do trading buy in the short term at the aforementioned support, with the loss-stopping point at 1,652 points, focusing on laggard plays in the food, retail and ICT sectors that are at low risk of being sold for sector rotations.</li></ul>

The SET Index is expected to gain, with the support at 1,660/1,652 points and the resistance at 1,680/1,690 points.Technically, the index is likely to rebound after it was able to close above the support at 1,670 points and stayed above the 10-day moving average.Tactically, investors are suggested to do trading buy in the short term at the aforementioned support, with the loss-stopping point at 1,652 points, focusing on laggard plays in the food, retail and ICT sectors that are at low risk of being sold for sector rotations.

China

Pu'er Lancang Ancient Tea Co., Ltd. manufactures and distributes tea products. The Company produces cooked tea, raw tea, seasoned tea, and other products. Pu'er Lancang Ancient Tea also produces tea sets.

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Pu'er Lancang Ancient Tea (PLAT HK)

Pre-IPO Pu'er Lancang Ancient Tea (PHIP Updates) - Lack of Product Standardization Is the Pain Point

Due to lack of product standardization, weak marketing, poor cost control, there're obvious growth bottleneck in Lancang's revenue scale. Profit...

Xinyao (Criss) Wang

Technical Analysis

The SET Index is expected to gain, with the support at 1,660/1,652 points and the resistance at 1,680/1,690 points. Technically, the index is...

Krungthai XSpring

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