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

Equity Bottom-Up

<ul>
<li>Earnings for Q3 2023 came in at 17.5 mn HKD up 5% YoY, about 15% below our expectations due to closure costs incurred on some restaurants in November. </li>
<li>The company added four restaurants in December 2022 which should result in strong revenue growth in January 2023. We expect monthly revenue to surpass HKD 80 mn. </li>
<li>Post the recent rally, the stock trades at 8.2x/5.2x FY23e/24e, with a 7.3%/11.5% FY23e/24e dividend yield assuming a 60% payout. We see this as an extremely cheap HK recovery play. </li>
</ul>


Earnings for Q3 2023 came in at 17.5 mn HKD up 5% YoY, about 15% below our expectations due to closure costs incurred on some restaurants in November. 
The company added four restaurants in December 2022 which should result in strong revenue growth in January 2023. We expect monthly revenue to surpass HKD 80 mn. 
Post the recent rally, the stock trades at 8.2x/5.2x FY23e/24e, with a 7.3%/11.5% FY23e/24e dividend yield assuming a 60% payout. We see this as an extremely cheap HK recovery play. 


Taste Gourmet: Encouraging 3Q 2023, Super Set Up for Q4.

Pan-Asia Catalysts/Events, Quiddity Advisors

Travis Lundy

Pan-Asia Catalysts/Events

Quiddity Advisors

Event-Driven

<ul>
<li>WH Group has sharply outperformed both global peers and HK/China-listed peers since the last bullish insight pounded the table in mid-March 2022.</li>
<li>Since then, the Pork/Feed ratio has been climbing in China and flat to down in the US, and pork prices in China are particularly robust recently. </li>
<li>
<a href="https://www.smartkarma.com/entities/wh-group-ltd" target="_blank" data-smartkarma-citation="entities:13200:1" rel="noopener">WH Group (288 HK)</a> remains cheap as chips. And despite gains, still Cheapest in Yonks relatively speaking. </li>
</ul>


WH Group has sharply outperformed both global peers and HK/China-listed peers since the last bullish insight pounded the table in mid-March 2022.
Since then, the Pork/Feed ratio has been climbing in China and flat to down in the US, and pork prices in China are particularly robust recently. 

WH Group (288 HK) remains cheap as chips. And despite gains, still Cheapest in Yonks relatively speaking. 


WH Group (288 HK) - Stronger, But Still WAY Cheap to Peers

<ul>
<li>The relaxing of restrictions by Hong Kong makes <a href="https://www.smartkarma.com/entities/taste-gourmet-group-ltd" target="_blank" data-smartkarma-citation="entities:27339:1" rel="noopener">Taste Gourmet Group Ltd (8371 HK)</a> a great reopening play, trading at 8.8x FY22e and 5.6x FY23e. </li>
<li>Despite a challenging environment, the company has executed well, maintaining net margins north of 7-8%, which are far superior to other listed competitors.</li>
<li>With &gt;60% payout ratios, it trades at a dividend yield of 6.7%/11.4% FY22e/FY23e. Since 29% of the market capitalization is cash, we are confident in the dividend payments. </li>
</ul>


The relaxing of restrictions by Hong Kong makes Taste Gourmet Group Ltd (8371 HK) a great reopening play, trading at 8.8x FY22e and 5.6x FY23e. 
Despite a challenging environment, the company has executed well, maintaining net margins north of 7-8%, which are far superior to other listed competitors.
With &gt;60% payout ratios, it trades at a dividend yield of 6.7%/11.4% FY22e/FY23e. Since 29% of the market capitalization is cash, we are confident in the dividend payments. 


Taste Gourmet: Multibagger Reopening Play

<ul>
<li>
<a href="https://www.smartkarma.com/entities/wh-group-ltd" target="_blank" data-smartkarma-citation="entities:13200:1" rel="noopener">WH Group (288 HK)</a> is two businesses - a US pork processor and a Chinese one - and both businesses are suffering lower margins than they'd like.</li>
<li>But they are doing better than and are cheaper than peers. And still the stock falls. Today, the stock price hit a 6-year low on dramatic underperformance of peers.</li>
<li>The question is what the proper discount would be for people who question its governance credentials. It's a really big discount now.</li>
</ul>



WH Group (288 HK) is two businesses - a US pork processor and a Chinese one - and both businesses are suffering lower margins than they'd like.
But they are doing better than and are cheaper than peers. And still the stock falls. Today, the stock price hit a 6-year low on dramatic underperformance of peers.
The question is what the proper discount would be for people who question its governance credentials. It's a really big discount now.


WH Group (288 HK) - Now Cheapest in Yonks Outright and Vs Peers

David Blennerhassett

<ul>
<li>The Scheme Document for <a href="https://www.smartkarma.com/entities/cp-pokphand-co-ltd" target="_blank" data-smartkarma-citation="entities:10135:1" rel="noopener">Cp Pokphand (43 HK)</a> (CPP) has been dispatched. The Scheme Meeting will take place on the 15 December. </li>
<li>
<a href="https://www.smartkarma.com/entities/charoen-pokphand-foods-public-company-limited" target="_blank" data-smartkarma-citation="entities:16131:1" rel="noopener">CP FOODS (CPF TB)</a> and <a href="https://www.smartkarma.com/entities/itochu-corp" target="_blank" data-smartkarma-citation="entities:18448:1" rel="noopener">Itochu Corp (8001 JP)</a> with 49.74% and 25% of shares out respectively are offering HK$1.15/share for CPP, a leading agri-food conglomerate in China and Vietnam. </li>
<li>The Independent Financial Adviser (Ballas Capital) considers the Scheme to be fair and reasonable. Assuming the Scheme gets up, payment is the 25 January, on or before.</li>
</ul>


The Scheme Document for Cp Pokphand (43 HK) (CPP) has been dispatched. The Scheme Meeting will take place on the 15 December. 

CP FOODS (CPF TB) and Itochu Corp (8001 JP) with 49.74% and 25% of shares out respectively are offering HK$1.15/share for CPP, a leading agri-food conglomerate in China and Vietnam. 
The Independent Financial Adviser (Ballas Capital) considers the Scheme to be fair and reasonable. Assuming the Scheme gets up, payment is the 25 January, on or before.


C.P. Pokphand (43 HK): Scheme Doc Out. Meeting on 15 December

Hong Kong

WH Group is the world's largest pork company, operating across China, the US, and Europe. It integrates hog production, slaughtering, and the processing and distribution of packaged meats and fresh pork. The company's core business includes a wide range of packaged meat products and fresh pork. Headquartered in Hong Kong, the company traces its origins back to 1958.

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WH Group (288 HK)

Taste Gourmet: Encouraging 3Q 2023, Super Set Up for Q4.

Taste Gourmet trades at 8.2x/5.2x FY23e/24e, with a 7.3%/11.5% FY23e/24e dividend yield assuming a 60% payout. We see this as an extremely cheap HK...

Sameer Taneja

WH Group (288 HK) - Stronger, But Still WAY Cheap to Peers

WH Group is up strongly the past 3 months, outperforming western peers (+43%) and China/HK-listed peers (+17%). China pork price dynamics are...

Travis Lundy

Taste Gourmet: Multibagger Reopening Play

The relaxing of restrictions by Hong Kong makes Taste Gourmet Group Ltd (8371 HK) a great reopening play, trading at 8.8x FY22e/5.6x FY23e PE and a...

Sameer Taneja

WH Group (288 HK) - Now Cheapest in Yonks Outright and Vs Peers

WH Group has always been cheap to its peer group. Now it is worse. Pork prices are underperforming feed prices, lowering margins worldwide. WH has...

Travis Lundy

C.P. Pokphand (43 HK): Scheme Doc Out. Meeting on 15 December

This still looks a pretty clean deal. I'd be paying up to and around $1.12/share which is ~3.6%/15% gross/annualised spread.

David Blennerhassett

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