Independent Research, Turtles all the way down

Turtles all the way down

Independent Research

Writing short articles about mis-priced boring stocks around the world.

Equity Bottom-Up

Genomma Lab Internacional Sab / Equity Bottom-Up

<ul><li>I got two new ideas and will close one. </li><li>The first one is Genomma Lab (LABB) , a Mexican branded OTC pharma and personal care products company.</li><li>The stock trades at a cheap multiple of about 10x earnings. But if you adjust for currency losses, the stock is cheaper.</li></ul>

I got two new ideas and will close one. The first one is Genomma Lab (LABB) , a Mexican branded OTC pharma and personal care products company.The stock trades at a cheap multiple of about 10x earnings. But if you adjust for currency losses, the stock is cheaper.

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>Over the past 12 months, we have written insights on 14 stocks in the small/mid-cap space with high dividend yields, inexpensive valuations, and a great margin of safety. </li>
<li>We re-examine these to shortlist 3-4 names of our highest conviction amidst the current macroeconomic climate.</li>
<li>Our high conviction shortlist includes <a href="https://www.smartkarma.com/entities/water-oasis-group-ltd" target="_blank" data-smartkarma-citation="entities:17348:1" rel="noopener">Water Oasis (1161 HK)</a>, <a href="https://www.smartkarma.com/entities/perfect-medical-health-management" target="_blank" data-smartkarma-citation="entities:3639:1" rel="noopener">Perfect Medical Health (1830 HK)</a>, <a href="https://www.smartkarma.com/entities/the-keepers-holdings-inc" target="_blank" data-smartkarma-citation="entities:23003:1" rel="noopener">The Keepers Holdings (KEEPR PM)</a>, and <a href="https://www.smartkarma.com/entities/taste-gourmet-group-ltd" target="_blank" data-smartkarma-citation="entities:27339:1" rel="noopener">Taste Gourmet (8371 HK)</a>.</li>
</ul>


Over the past 12 months, we have written insights on 14 stocks in the small/mid-cap space with high dividend yields, inexpensive valuations, and a great margin of safety. 
We re-examine these to shortlist 3-4 names of our highest conviction amidst the current macroeconomic climate.
Our high conviction shortlist includes Water Oasis (1161 HK), Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), and Taste Gourmet (8371 HK).


Shortlist of High Conviction Ideas - Income, Value, Margin of Safety

<ul><li>Early this year I was quite pessimistic on Hong Kong stocks.</li><li>But since then the Hang Seng is down another 20% or so. A lot of stocks with 9-10%+ dividend yields are laying around.</li><li>I should have been a bit quicker writing this up, but then you are getting it for free.</li></ul>

Early this year I was quite pessimistic on Hong Kong stocks.But since then the Hang Seng is down another 20% or so. A lot of stocks with 9-10%+ dividend yields are laying around.I should have been a bit quicker writing this up, but then you are getting it for free.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/water-oasis-group-ltd" target="_blank" data-smartkarma-citation="entities:17348:1" rel="noopener">Water Oasis (1161 HK)</a> reported a tepid H1 with profits coming in at 26 mn HKD, down 56.2% YoY.  This was below our expectations as the company received no subsidies.</li>
<li>No interim dividend was paid as the profit in H1 was minuscule, and business had commenced on the 21st of April, impacting a month of H2.  </li>
<li>Save for another lockdown in HK, we see a substantial improvement in profitability for <a href="https://www.smartkarma.com/entities/water-oasis-group-ltd" target="_blank" data-smartkarma-citation="entities:17348:1" rel="noopener">Water Oasis (1161 HK)</a> in H2, along with subsidies that are being paid retrospectively.</li>
</ul>



Water Oasis (1161 HK) reported a tepid H1 with profits coming in at 26 mn HKD, down 56.2% YoY.  This was below our expectations as the company received no subsidies.
No interim dividend was paid as the profit in H1 was minuscule, and business had commenced on the 21st of April, impacting a month of H2.  
Save for another lockdown in HK, we see a substantial improvement in profitability for Water Oasis (1161 HK) in H2, along with subsidies that are being paid retrospectively.


Water Oasis: Lockdown Affected H1 FY22, Improving H2

<ul>
<li>Beauty services in Hong Kong will pick up from the 21st of April 2022 post the reopening, due to pent-up demand and the disbursement of <a href="https://www.consumptionvoucher.gov.hk/en/newround.html" target="_blank" rel="noopener">Consumption Vouchers</a> by the government. </li>
<li>Despite losing three months of H1 2022 and a month of H2 2022, we believe that <a href="https://www.smartkarma.com/entities/water-oasis-group-ltd" target="_blank" data-smartkarma-citation="entities:17348:1" rel="noopener">Water Oasis (1161 HK)</a>  is still trading at 5.4x PE FY22e.</li>
<li>With an 80% payout ratio, the dividend yield is alluring at 16.4%. Net cash represents 38% of market capitalization. A year of uninterrupted operations implies a 3.8x PE. </li>
</ul>


Beauty services in Hong Kong will pick up from the 21st of April 2022 post the reopening, due to pent-up demand and the disbursement of Consumption Vouchers by the government. 
Despite losing three months of H1 2022 and a month of H2 2022, we believe that Water Oasis (1161 HK)  is still trading at 5.4x PE FY22e.
With an 80% payout ratio, the dividend yield is alluring at 16.4%. Net cash represents 38% of market capitalization. A year of uninterrupted operations implies a 3.8x PE. 


Water Oasis: A Double From Here, Brace for the Re-Opening of Hong Kong

Hong Kong

Water Oasis Group Limited distributes exclusively ~H2O+ brand skin-care products in Hong Kong, Macau, Taiwan and China. The Company also operates spa centers under the Oasis Spa, Oasis Beauty, and Oasis Beauty Homme brand names.

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Water Oasis (1161 HK)

Quick ideas #2

I got two new ideas and will close one. The first one is Genomma Lab (LABB) , a Mexican branded OTC pharma and personal care products company.

Turtles all the way down

Shortlist of High Conviction Ideas - Income, Value, Margin of Safety

We like Water Oasis (1161 HK), Perfect Medical Health (1830 HK), The Keepers Holdings (KEEPR PM), and Taste Gourmet (8371 HK) as the businesses are...

Sameer Taneja

Back in Hong Kong stocks

Early this year I was quite pessimistic on Hong Kong stocks. But since then the Hang Seng is down another 20% or so. A lot of stocks with 9-10%+...

Turtles all the way down

Water Oasis: Lockdown Affected H1 FY22, Improving H2

An HK beauty recovery play trading at a 5.4x/3.3x FY22/FY23 PE and a 15.7% dividend yield with >30% of cash on the balance sheet.

Sameer Taneja

Water Oasis: A Double From Here, Brace for the Re-Opening of Hong Kong

Despite losing three months of H1 2022 and a month of H2 2022, we believe that Water Oasis (1161 HK) is still trading at 5.4x PE FY22e with a...

Sameer Taneja

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