Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>Hanwha Galleria (452260 KS) is the 23rd company in our Korea Small Cap Gems series. </li>
<li>Hanwha Galleria is a spun-off company from Hanwha Solution. Hanwha Galleria's shares have declined 39% since being relisted on 31 May 2023. </li>
<li>Hanwha Galleria is a deep value stock with undervalued real estate assets. Chairman's son is also buying aggressively and there is a big catalyst for Five Guys launch in Korea. </li>
</ul>


Hanwha Galleria (452260 KS) is the 23rd company in our Korea Small Cap Gems series. 
Hanwha Galleria is a spun-off company from Hanwha Solution. Hanwha Galleria's shares have declined 39% since being relisted on 31 May 2023. 
Hanwha Galleria is a deep value stock with undervalued real estate assets. Chairman's son is also buying aggressively and there is a big catalyst for Five Guys launch in Korea. 


Korea Small Cap Gem #23: Hanwha Galleria (Deep Value + Five Guys + Chairman's Son Buying)

Thematic (Sector/Industry)

<ul>
<li>We discuss how White Castle, which has one of the most loyal customer base for franchise burger chain in the United States, has been using robots to make French fries.</li>
<li>In February 2022, White Castle started to roll out Miso Robotics' Flippy 2 machine robots on about White Castle 100 restaurants in the United States.</li>
<li>In the next several years, there is a real chance for McDonald's, White Castle, and Burger King to replace human workers making French fries and burgers with robots.</li>
</ul>


We discuss how White Castle, which has one of the most loyal customer base for franchise burger chain in the United States, has been using robots to make French fries.
In February 2022, White Castle started to roll out Miso Robotics' Flippy 2 machine robots on about White Castle 100 restaurants in the United States.
In the next several years, there is a real chance for McDonald's, White Castle, and Burger King to replace human workers making French fries and burgers with robots.


White Castles' Kitchen Robots - Impact on McDonald's & Global Fast Food Franchises

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.

Equity Capital Markets

<div>
<p><a href="https://www.smartkarma.com/entities/nayuki-holdings" target="_blank" data-smartkarma-citation="entities:32149:1" rel="noopener">Nayuki Holdings (2150 HK)</a> is the second-largest premium teahouse chain in China accounting for 18.9% of China’s premium modern teahouse market as measured by total retail consumption value in 2020, according to CIC.</p>
<p>Nayuki will commence trading on Wednesday, 30 June. Nayuki priced its IPO at HK$19.80 and the shares <a href="https://inews.hket.com/article/2993858/%E3%80%90%E5%A5%88%E9%9B%AA%E7%9A%84%E8%8C%B6%E6%9A%97%E7%9B%A4%E3%80%91%E5%A5%88%E9%9B%AA%E7%9A%84%E8%8C%B62150%E5%A0%B4%E5%A4%96%E6%9A%97%E7%9B%A4%E5%8D%8711-%E3%80%80%E4%B8%80%E6%89%8B%E5%B8%B3%E9%9D%A2%E8%B3%BA1100%E5%85%83?mtc=40001&amp;srkw=IPO%E6%9C%80%E5%BF%AB%E6%9C%80%E9%BD%8A" target="_blank" rel="noopener">stood 11% higher</a> at HK$22.00 in the grey market.</p>
</div><div>
<p>In <a href="https://www.smartkarma.com/insights/nayuki-holdings-ipo-initiation-a-new-leaf" target="_blank" data-smartkarma-citation="insights:48532" rel="noopener">Nayuki Holdings IPO Initiation: A New Leaf</a>, we noted that premium teahouses have rapidly gained popularity in China as they bring new tea-drinking experiences and benefit from the structural trend of consumer’s consumption upgrades driven by higher disposable income. We opined that Nayuki has the right ingredients to offer investors an attractive play on this market. In <a href="https://www.smartkarma.com/insights/nayuki-holdings-ipo-drinking-habits" target="_blank" data-smartkarma-citation="insights:52873" rel="noopener">Nayuki Holdings IPO: Drinking Habits</a>, we noted that recent results (disclosed in the PHIP) show that Nayuki is well-positioned as a post-COVID-19 recovery play.</p>
<p>In <a href="https://www.smartkarma.com/insights/nayuki-holdings-ipo-valuation-insights" target="_blank" data-smartkarma-citation="insights:53291" rel="noopener">Nayuki Holdings IPO: Valuation Insights</a>, we noted that Nayuki is attractively valued to its peer group for its forecasted earnings growth i.e. on a PEG basis. We recommended participating at the low end of the IPO price range due to the decent upside compared to our base-case DCF valuation.</p>
</div><div><div><div class="content-highlight"><p>Updating for the final IPO net raise and FX, our base-case DCF derived price target is HK$19.45 per share. Nevertheless, our DCF sensitivity and relative valuation analysis show that the grey market price is justifiable.  </p></div></div></div>


Nayuki Holdings (2150 HK) is the second-largest premium teahouse chain in China accounting for 18.9% of China’s premium modern teahouse market as measured by total retail consumption value in 2020, according to CIC.
Nayuki will commence trading on Wednesday, 30 June. Nayuki priced its IPO at HK$19.80 and the shares stood 11% higher at HK$22.00 in the grey market.

In Nayuki Holdings IPO Initiation: A New Leaf, we noted that premium teahouses have rapidly gained popularity in China as they bring new tea-drinking experiences and benefit from the structural trend of consumer’s consumption upgrades driven by higher disposable income. We opined that Nayuki has the right ingredients to offer investors an attractive play on this market. In Nayuki Holdings IPO: Drinking Habits, we noted that recent results (disclosed in the PHIP) show that Nayuki is well-positioned as a post-COVID-19 recovery play.
In Nayuki Holdings IPO: Valuation Insights, we noted that Nayuki is attractively valued to its peer group for its forecasted earnings growth i.e. on a PEG basis. We recommended participating at the low end of the IPO price range due to the decent upside compared to our base-case DCF valuation.
Updating for the final IPO net raise and FX, our base-case DCF derived price target is HK$19.45 per share. Nevertheless, our DCF sensitivity and relative valuation analysis show that the grey market price is justifiable.  

<p><a href="https://www.smartkarma.com/entities/nayuki-holdings" target="_blank" data-smartkarma-citation="entities:32149:1" rel="noopener">Nayuki Holdings (2150 HK)</a> is the second-largest premium teahouse chain in China accounting for 18.9% of China’s premium modern teahouse market as measured by total retail consumption value in 2020, according to CIC.</p><div><p>At the proposed IPO price range of HK$17.20-19.80 per share, Nayuki will have a market cap of HK$29,500.2-33,959.5 million ($3.8-4.4 billion). At the mid-point of the IPO price range, the net proceeds are HK$4,521.3 million ($582 million). </p></div><div>
<p>Five cornerstone investors will purchase $155 million worth of the offer shares (25.25% of the offer shares at the mid-point of the IPO price range). The cornerstone investors are UBS Asset Management, China Universal Asset Management, GF Fund, China Southern Asset Management and CCB International. </p>
<div>
<p>In <a href="https://www.smartkarma.com/insights/nayuki-holdings-ipo-initiation-a-new-leaf" target="_blank" data-smartkarma-citation="insights:48532" rel="noopener">Nayuki Holdings IPO Initiation: A New Leaf</a>, we noted that premium teahouses have rapidly gained popularity in China as they bring new tea-drinking experiences and benefit from the structural trend of consumer’s consumption upgrades driven by higher disposable income. We opined that Nayuki has the right ingredients to offer investors an attractive play on this market. In <a href="https://www.smartkarma.com/insights/nayuki-holdings-ipo-drinking-habits" target="_blank" data-smartkarma-citation="insights:52873" rel="noopener">Nayuki Holdings IPO: Drinking Habits</a>, we noted that recent results (disclosed in the PHIP) show that Nayuki is well-positioned as a post-COVID-19 recovery play.</p>
<div class="content-highlight"><p>Based on our forecasts, Nayuki is attractively valued to its peer group for its forecasted earnings growth i.e. on a PEG basis. Overall, we are inclined to participate at the low end of the IPO price range due to the decent upside compared to our base-case DCF valuation of HK$19.49 per share.</p></div>
</div>
<p></p>
</div>

Nayuki Holdings (2150 HK) is the second-largest premium teahouse chain in China accounting for 18.9% of China’s premium modern teahouse market as measured by total retail consumption value in 2020, according to CIC.At the proposed IPO price range of HK$17.20-19.80 per share, Nayuki will have a market cap of HK$29,500.2-33,959.5 million ($3.8-4.4 billion). At the mid-point of the IPO price range, the net proceeds are HK$4,521.3 million ($582 million). 
Five cornerstone investors will purchase $155 million worth of the offer shares (25.25% of the offer shares at the mid-point of the IPO price range). The cornerstone investors are UBS Asset Management, China Universal Asset Management, GF Fund, China Southern Asset Management and CCB International. 

In Nayuki Holdings IPO Initiation: A New Leaf, we noted that premium teahouses have rapidly gained popularity in China as they bring new tea-drinking experiences and benefit from the structural trend of consumer’s consumption upgrades driven by higher disposable income. We opined that Nayuki has the right ingredients to offer investors an attractive play on this market. In Nayuki Holdings IPO: Drinking Habits, we noted that recent results (disclosed in the PHIP) show that Nayuki is well-positioned as a post-COVID-19 recovery play.
Based on our forecasts, Nayuki is attractively valued to its peer group for its forecasted earnings growth i.e. on a PEG basis. Overall, we are inclined to participate at the low end of the IPO price range due to the decent upside compared to our base-case DCF valuation of HK$19.49 per share.




Independent Research, Food Delivery Space, Newmoon Capital

Newmoon Capital

Independent Research, Food Delivery Space

We look for owner-operators in what we believe are either highly defensible assets or soon to be highly defensible assets, trading at a fraction of their future potential.

Private Capital Markets

<p>Judging from the twitter DMs, several of my points from my previous post have gone over the head of some investors, particularly the one around Signature (white label delivery). Deliveroo is at risk of getting disrupted because a large proportion of its orders/sales are from a small selection of chain restaurants — 10 chains represent 35% of ALL UK orders. Some of such chains include Nando’s, Wagamama, and McDonalds. The top 100 chains could easily be more than 50% of the UK business, if not much more. This is the case (if not moreso) for Uber Eats, and less the case for $TKWY.</p>

Judging from the twitter DMs, several of my points from my previous post have gone over the head of some investors, particularly the one around Signature (white label delivery). Deliveroo is at risk of getting disrupted because a large proportion of its orders/sales are from a small selection of chain restaurants — 10 chains represent 35% of ALL UK orders. Some of such chains include Nando’s, Wagamama, and McDonalds. The top 100 chains could easily be more than 50% of the UK business, if not much more. This is the case (if not moreso) for Uber Eats, and less the case for $TKWY.

Deliveroo Part 6 - White Label Killed the Delivery Star

United States

Shake Shack Inc is a modern day "roadside" burger stand known for its all-natural burgers. Shake Shack is part of Danny Meyer's Union Square Hospitality Group (USHG).

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Shake Shack Inc Class A (SHAK US)

Korea Small Cap Gem #23: Hanwha Galleria (Deep Value + Five Guys + Chairman's Son Buying)

Hanwha Galleria is a deep value stock with undervalued real estate assets. Chairman's son is also buying aggressively and there is a big catalyst...

Douglas Kim

White Castles' Kitchen Robots - Impact on McDonald's & Global Fast Food Franchises

In the next several years, there is a real chance for McDonald's, White Castle, and Burger King to replace human workers making French fries and...

Douglas Kim

Nayuki Holdings IPO: Trading Debut

Nayuki priced its IPO at HK$19.80 and the shares stood 11% higher at HK$22.00 in the grey market. Our DCF sensitivity and relative valuation...

Arun George

Nayuki Holdings IPO: Valuation Insights

We are inclined to participate at the low end of the IPO price range due to the decent upside compared to our base-case DCF valuation of HK$19.49...

Arun George

Deliveroo Part 6 - White Label Killed the Delivery Star

Deliveroo is at risk of getting disrupted because a large proportion of its orders/sales are from a small selection of chain restaurants — 10...

Newmoon Capital

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