Vriddhi Consulting

Punit Khanna

Independent Insight Provider

Equity Bottom-Up

<ul>
<li>Sitoy announced full-year results yesterday. Operationally, they were below expectations.</li>
<li>Its Net Current Assets minus all liabilities were HK$ .58 per share.</li>
<li>Its book value was HK$ 1.51 per share and at 0.28 P/B</li>
</ul>
<div class="content-highlight">
<h2>Raising Money for Persons with Disabilities in Singapore</h2>
For your kind consideration
This report has been prepared by Vriddhi Consulting, founded by Punit and Debjani Khanna. A portion of the research was contributed by Shubham Khanna, an individual on the autism spectrum.  We are grateful to Smartkarma for providing a platform to share this research and amplify its impact.
All proceeds from the publication of this report will be donated to support people with disabilities in Singapore. If you find this report valuable, we invite you to support our campaign, “Raising Money for Persons with Disabilities in Singapore.” Every contribution directly benefits the Goh Chok Tong Enable Fund and qualifies for a 250% tax deduction for Singapore tax residents.
To contribute, <a href="https://www.giving.sg/donate/campaign/raising-money-for-special-needs-persons-in-singapore" target="_blank" rel="noopener">please visit this URL.</a>
</div>


Sitoy announced full-year results yesterday. Operationally, they were below expectations.
Its Net Current Assets minus all liabilities were HK$ .58 per share.
Its book value was HK$ 1.51 per share and at 0.28 P/B


Raising Money for Persons with Disabilities in Singapore
For your kind consideration
This report has been prepared by Vriddhi Consulting, founded by Punit and Debjani Khanna. A portion of the research was contributed by Shubham Khanna, an individual on the autism spectrum.  We are grateful to Smartkarma for providing a platform to share this research and amplify its impact.
All proceeds from the publication of this report will be donated to support people with disabilities in Singapore. If you find this report valuable, we invite you to support our campaign, “Raising Money for Persons with Disabilities in Singapore.” Every contribution directly benefits the Goh Chok Tong Enable Fund and qualifies for a 250% tax deduction for Singapore tax residents.
To contribute, please visit this URL.


Sitoy Results: Value Trap or Not? You Decide: Below Liquidation Value

<ul>
<li>Stock trades at .3 x P/B, Cash on books is .38 cents per share, and Liquidation Value is .64 cents ( Net Current Assets less all liabilities is .64 cents.</li>
<li>Manufacturing business is the main business, and the company has blue-chip customers but not much pricing power.</li>
<li>The retail business has a chequered history, and the property value per share is 40 cents per share. Dividend Yield is 7%</li>
</ul>
 <div class="content-highlight">
 <h2>Raising Money for Persons with Disabilities in Singapore</h2>
 For your kind consideration
 This report has been prepared by Vriddhi Consulting, founded by Punit and Debjani Khanna. A portion of the research was contributed by Shubham Khanna, an individual on the autism spectrum.  We are grateful to Smartkarma for providing a platform to share this research and amplify its impact.
 All proceeds from the publication of this report will be donated to support people with disabilities in Singapore. If you find this report valuable, we invite you to support our campaign, “Raising Money for Persons with Disabilities in Singapore.” Every contribution directly benefits the Goh Chok Tong Enable Fund and qualifies for a 250% tax deduction for Singapore tax residents.
 To contribute, <a href="https://www.giving.sg/donate/campaign/raising-money-for-special-needs-persons-in-singapore" target="_blank" rel="noopener">please visit this URL.</a> 
 </div>


Stock trades at .3 x P/B, Cash on books is .38 cents per share, and Liquidation Value is .64 cents ( Net Current Assets less all liabilities is .64 cents.
Manufacturing business is the main business, and the company has blue-chip customers but not much pricing power.
The retail business has a chequered history, and the property value per share is 40 cents per share. Dividend Yield is 7%

        
        Raising Money for Persons with Disabilities in Singapore
        For your kind consideration
        This report has been prepared by Vriddhi Consulting, founded by Punit and Debjani Khanna. A portion of the research was contributed by Shubham Khanna, an individual on the autism spectrum.  We are grateful to Smartkarma for providing a platform to share this research and amplify its impact.
        All proceeds from the publication of this report will be donated to support people with disabilities in Singapore. If you find this report valuable, we invite you to support our campaign, “Raising Money for Persons with Disabilities in Singapore.” Every contribution directly benefits the Goh Chok Tong Enable Fund and qualifies for a 250% tax deduction for Singapore tax residents.
        To contribute, please visit this URL. 
        
        

Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

<ul>
<li>We examine the value proposition of <a href="https://www.smartkarma.com/entities/sitoy-group-holdings-ltd" target="_blank" data-smartkarma-citation="entities:464:1" rel="noopener">Sitoy Group Holdings (1023 HK)</a> trading at 4x PE with a 12.5 % dividend yield ( assuming a sustainable 50% payout ratio ).</li>
<li>The company has 400 mn HKD net cash and real estate worth 690 mn HKD on its balance sheet. This compares favorably with its 840 mn HKD market cap. </li>
<li>The major drawback of investing in the company is its track record, which shows a steadily declining revenue trend and a fluctuating ROCE (currently 11%). </li>
</ul>


We examine the value proposition of Sitoy Group Holdings (1023 HK) trading at 4x PE with a 12.5 % dividend yield ( assuming a sustainable 50% payout ratio ).
The company has 400 mn HKD net cash and real estate worth 690 mn HKD on its balance sheet. This compares favorably with its 840 mn HKD market cap. 
The major drawback of investing in the company is its track record, which shows a steadily declining revenue trend and a fluctuating ROCE (currently 11%). 


Sitoy (1023 HK): Deep Value ~50% of Mkt in Cash, 4x PE and 12.5% Dividend Yield

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

MSCI Emerging Markets Index / Technical Analysis

Asia is leading EM higher.  In this week's Chart Book, we highlight the following themes and actionable charts: <ul><li>Overweight Asia. In today’s report we highlight a broad array of actionable names within the Asia region ... see pages 3-6</li><li>Indian banks are breaking out. India’s state banks broke out last week in response to the government’s announcement of a $32.5 billion recapitalization plan. Actionable ideas: Punjab National Bank (532461-IN), State Bank of India (500112-IN), ICICI Bank (532174-IN)... see page 2</li><li>Leading Sectors. EM sectors exhibiting attractive relative strength trends include: consumer discretionary, energy, financials, health care, materials, and tech. This (mostly) cyclical line-up supports a risk-on outlook. When defensive sectors exhibit improving relative strength, then we’ll turn cautious on EM’s advance.</li></ul>

Asia is leading EM higher.  In this week's Chart Book, we highlight the following themes and actionable charts: Overweight Asia. In today’s report we highlight a broad array of actionable names within the Asia region ... see pages 3-6Indian banks are breaking out. India’s state banks broke out last week in response to the government’s announcement of a $32.5 billion recapitalization plan. Actionable ideas: Punjab National Bank (532461-IN), State Bank of India (500112-IN), ICICI Bank (532174-IN)... see page 2Leading Sectors. EM sectors exhibiting attractive relative strength trends include: consumer discretionary, energy, financials, health care, materials, and tech. This (mostly) cyclical line-up supports a risk-on outlook. When defensive sectors exhibit improving relative strength, then we’ll turn cautious on EM’s advance.

EM Technicals: Overweight Asia; Indian Banks Are Breaking Out; Bottom-Up Ideas

Leading Independent Investment Research, Morningstar, Inc.

Morningstar

Leading Independent Investment Research

Morningstar, Inc.

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. We offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors. 

Morningstar provides data on more than 500,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 16 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries, with more than $180 billion in assets under advisement or management as of June 30, 2015. We have operations in 27 countries.

Download the Morningstar Fact Sheet : http://corporate.morningstar.com/US/documents/MarketingFactSheets/AboutMorningstarFactsheet.pdf

Thematic (Sector/Industry)

Eighteen sales and marketing executives at Crown Resorts were reported as being detained in China, likely due to illegally soliciting Chinese to gamble in overseas casinos. Our contacts in the industry have already seen immediate termination of marketing efforts in mainland China by Macau casinos, which imply lower near-term gaming revenue in our view. A loss of higher-margin direct VIP business could also mean lower overall VIP margin for the Macau casinos, as junket VIP margins are one to two percentage points lower compared with direct VIP margins. Near-term sentiment will be unfavorable for the Macau gaming stocks. However, we gauge that marketing activities in mainland China will resurface as the dust settles, though casinos will take a lower-profile approach.To reflect the short-term impact, if we reduced 2016 full-year VIP, mass and slot revenue by 7.5% for our Macau gaming coverage, there would still be no impact on fair value estimates. Therefore, we maintain our long-term forecast and long-term-based, DCF-generated fair value estimates. Our narrow moat ratings also remain unchanged.Analyst: Chelsey Tam

Eighteen sales and marketing executives at Crown Resorts were reported as being detained in China, likely due to illegally soliciting Chinese to gamble in overseas casinos. Our contacts in the industry have already seen immediate termination of marketing efforts in mainland China by Macau casinos, which imply lower near-term gaming revenue in our view. A loss of higher-margin direct VIP business could also mean lower overall VIP margin for the Macau casinos, as junket VIP margins are one to two percentage points lower compared with direct VIP margins. Near-term sentiment will be unfavorable for the Macau gaming stocks. However, we gauge that marketing activities in mainland China will resurface as the dust settles, though casinos will take a lower-profile approach.To reflect the short-term impact, if we reduced 2016 full-year VIP, mass and slot revenue by 7.5% for our Macau gaming coverage, there would still be no impact on fair value estimates. Therefore, we maintain our long-term forecast and long-term-based, DCF-generated fair value estimates. Our narrow moat ratings also remain unchanged.Analyst: Chelsey Tam

Negative Near-Term Read-Throughs from the Detainment of Crown Resorts' Marketing Executives in China

Hong Kong

Sitoy Group is a leading manufacturer of branded high-end and luxury handbags, small leather goods, and travel goods, and also operates as a retailer in Greater China. The company designs, develops, manufactures, and sells products under brands such as TUSCAN'S, Fashion & Joy, and Duffy. Sitoy Group was founded in 1968 and is headquartered in Hong Kong.

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Sitoy Group (1023 HK)

Sitoy Results: Value Trap or Not? You Decide: Below Liquidation Value

Deep-value situation with a deteriorating operating business in both retail and manufacturing. A high dividend Yield will provide support to the...

Punit Khanna

Sitoy : Value Trap or Not

Sitoy is one of the largest leather bag contract manufacturers in the world and is a net-net situation and trading below book. Earnings continue to...

Punit Khanna

Sitoy (1023 HK): Deep Value ~50% of Mkt in Cash, 4x PE and 12.5% Dividend Yield

We examine the value proposition of Sitoy Group Holdings (1023 HK) trading at 4x PE with a 12.5 % dividend yield ( assuming a sustainable 50%...

Sameer Taneja

EM Technicals: Overweight Asia; Indian Banks Are Breaking Out; Bottom-Up Ideas

Asia is leading EM higher. In this week's Chart Book, we highlight the following themes and actionable charts: Overweight Asia. In today’s...

Vermilion Research

Negative Near-Term Read-Throughs from the Detainment of Crown Resorts' Marketing Executives in China

Eighteen sales and marketing executives at Crown Resorts were reported as being detained in China, likely due to illegally soliciting Chinese to...

Morningstar, Inc.

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