HK/China Equity Long-Short

Osbert Tang, CFA

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/haier-smart-home-co-ltd-b3ef445f-0f54-4586-8c58-9073de98d60e" target="_blank" data-smartkarma-citation="entities:31105:1" rel="noopener">Haier Smart Home (6690 HK)</a> is less exposed to China's real estate market than one would have thought. Despite poor property industry, HSH still generated 12.9% earnings growth in 3Q23.</li>
<li>We are delighted to see further margin pick-up in 2Q23-3Q23, thanks to digitalisation and better efficiency. We believe such a trend can be sustained over the next 12-18 months. </li>
<li>More innovative products will drive market share, and better margin can support a 13% 3-year earnings CAGR. ROE is high at 17-8% despite net cash (8.8% of share price).   </li>
</ul>



Haier Smart Home (6690 HK) is less exposed to China's real estate market than one would have thought. Despite poor property industry, HSH still generated 12.9% earnings growth in 3Q23.
We are delighted to see further margin pick-up in 2Q23-3Q23, thanks to digitalisation and better efficiency. We believe such a trend can be sustained over the next 12-18 months. 
More innovative products will drive market share, and better margin can support a 13% 3-year earnings CAGR. ROE is high at 17-8% despite net cash (8.8% of share price).   


<ul>
<li>While <a href="https://www.smartkarma.com/entities/vesync" target="_blank" data-smartkarma-citation="entities:31067:1" rel="noopener">Vesync (2148 HK)</a>'s net profit grew 20.1% in FY24, there is a marked slowdown in 2H24 (+7.4%) vs. 1H24 (+37.5%), suggesting increased operating pressure. </li>
<li>North American sales slowed to 10.7% growth in 2H24, from 13% in 1H24. The deteriorating financial and operating performance affirmed that privatisation is an exit opportunity.</li>
<li>Its PER discount (on privatiation price) to peers has widened to 35-38%, compared with 25-30% in Dec. Its US exposure makes it unable to reap benefits from China market stimulus.</li>
</ul>


While Vesync (2148 HK)'s net profit grew 20.1% in FY24, there is a marked slowdown in 2H24 (+7.4%) vs. 1H24 (+37.5%), suggesting increased operating pressure. 
North American sales slowed to 10.7% growth in 2H24, from 13% in 1H24. The deteriorating financial and operating performance affirmed that privatisation is an exit opportunity.
Its PER discount (on privatiation price) to peers has widened to 35-38%, compared with 25-30% in Dec. Its US exposure makes it unable to reap benefits from China market stimulus.


Vesync (2148 HK): What Did the FY24 Results Tell?

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.

Event-Driven

<ul>
<li>On 27 December 2024, <a href="https://www.smartkarma.com/entities/vesync" target="_blank" data-smartkarma-citation="entities:31067:1" rel="noopener">Vesync (2148 HK)</a> disclosed a Cayman scheme privatisation offer from the Yang family at HK$5.60. On 28 January, the antitrust condition was satisfied.   </li>
<li>Despite a light offer, the scheme vote is low-risk. No disinterested shareholder holds a blocking stake, there is a scrip option with no cap, and there is no retail opposition. </li>
<li>The scheme document will be despatched by 11 April. At the last close and for an end-of-May payment, the gross and annualised spread is 6.9% and 22.7%, respectively.  </li>
</ul>


On 27 December 2024, Vesync (2148 HK) disclosed a Cayman scheme privatisation offer from the Yang family at HK$5.60. On 28 January, the antitrust condition was satisfied.   
Despite a light offer, the scheme vote is low-risk. No disinterested shareholder holds a blocking stake, there is a scrip option with no cap, and there is no retail opposition. 
The scheme document will be despatched by 11 April. At the last close and for an end-of-May payment, the gross and annualised spread is 6.9% and 22.7%, respectively.  


Vesync (2148 HK): Antitrust Condition Satisfied, and the Scheme Vote Remains Low-Risk

Asia Pac IPO & Placement Research, China biotech, Aequitas Research

Ke Yan, CFA, FRM

Asia Pac IPO & Placement Research, China biotech

IPOs and Placements coverage across Asia Pacific

Aequitas Research

We cover all listing across the Asia Pacific along with follow-up placements. As of Dec 2020, our team had covered 539 IPOs with a hit rate of 73.5% and 685 placements with a hit rate of 66.8%.

We combine fundamental bottom-up views with our proprietary quantitative framework to provide a holistic coverage across new listings and placements. Our coverage includes pre-IPO notes before the deal is launched, follow-up analysis once the deal is live and post-listing trading analysis as well.

Quantitative Analysis

<ul>
<li>We analyze the 4Q2023 Shanghai/Shenzhen northbound Connect flows with our data engine as the exchange changed the rule to only disclose north bound position once a quarter.</li>
<li>We estimate that the outflows in 4Q2023 were US$20,921 million and holdings were US$302 billion.</li>
<li>We highlight flows for Moutai, Yangtze Power, Catl, Gree Electric Appliances, Sungrow Power Supply.</li>
</ul>


We analyze the 4Q2023 Shanghai/Shenzhen northbound Connect flows with our data engine as the exchange changed the rule to only disclose north bound position once a quarter.
We estimate that the outflows in 4Q2023 were US$20,921 million and holdings were US$302 billion.
We highlight flows for Moutai, Yangtze Power, Catl, Gree Electric Appliances, Sungrow Power Supply.


Northbound Flows (4Q2023): $20bn Outflows in 4Q

<ul>
<li>
<a href="https://www.smartkarma.com/entities/vesync" target="_blank" data-smartkarma-citation="entities:31067:1" rel="noopener">Vesync (2148 HK)</a>'s major shareholders proposed to privatise at HK$5.60, a 33.3% premium to the pre-suspension price. This is the same as we calculated using the 3-year average P/B. </li>
<li>At such a price, it will sit at 7.6x PER for FY25F, a level that it only touched briefly 3 times in the last two years. </li>
<li>This PER is at a 25-30% discount to the sector and justified by its smaller size and lesser diversification. All in all, the proposed price looks fair and reasonable.</li>
</ul>



Vesync (2148 HK)'s major shareholders proposed to privatise at HK$5.60, a 33.3% premium to the pre-suspension price. This is the same as we calculated using the 3-year average P/B. 
At such a price, it will sit at 7.6x PER for FY25F, a level that it only touched briefly 3 times in the last two years. 
This PER is at a 25-30% discount to the sector and justified by its smaller size and lesser diversification. All in all, the proposed price looks fair and reasonable.


Vesync (2148 HK): Proposed Privatisation at HK$5.60 Fair and Reasonable

China

Zhejiang Supor Co., Ltd. manufactures and markets cookware and home appliance products. The Company produces non-stick pans, pressure cookers, stainless steel cookware, rice cookers, air purifiers, thermos cups, and more. Zhejiang Supor markets its to Japan, Europe, and South East Asia.

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Zhejiang Supor (002032 CH)

Haier Smart Home (6690 HK): Stays Smart

Haier Smart Home is less exposed to real estate market than expected. Digitalisation and efficiency improvements are driving margin; and...

Osbert Tang, CFA

Vesync (2148 HK): What Did the FY24 Results Tell?

Vesync's profit growth slows in 2H24, indicating increased operating pressure and affirming privatisation as an exit opportunity. Its non-China...

Osbert Tang, CFA

Vesync (2148 HK): Antitrust Condition Satisfied, and the Scheme Vote Remains Low-Risk

Despite a light offer, the scheme vote is low-risk. No disinterested shareholder holds a blocking stake, there is a scrip option with no cap, and...

Arun George

Northbound Flows (4Q2023): $20bn Outflows in 4Q

We analyzed Northbound connect data for 4Q2023 and highlight flows for Moutai, Yangtze Power, Catl, Gree Electric Appliances, Sungrow Power Supply.

Ke Yan, CFA, FRM

Vesync (2148 HK): Proposed Privatisation at HK$5.60 Fair and Reasonable

Vesync's major shareholders propose to privatise it at HK$5.60, a 33.3% premium. We consider this a fair and reasonable price based on PER, P/B,...

Osbert Tang, CFA

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Haier Smart Home (6690 HK): Stays Smart

​Haier Smart Home is less exposed to real estate market than expected. Digitalisation and efficiency improvements are driving margin; and...

Osbert Tang, CFA

Vesync (2148 HK): What Did the FY24 Results Tell?

​Vesync's profit growth slows in 2H24, indicating increased operating pressure and affirming privatisation as an exit opportunity. Its non-China...

Osbert Tang, CFA

Vesync (2148 HK): Antitrust Condition Satisfied, and the Scheme Vote Remains Low-Risk

Despite a light offer, the scheme vote is low-risk. No disinterested shareholder holds a blocking stake, there is a scrip option with no cap, and...

Arun George

Northbound Flows (4Q2023): $20bn Outflows in 4Q

We analyzed Northbound connect data for 4Q2023 and highlight flows for Moutai, Yangtze Power, Catl, Gree Electric Appliances, Sungrow Power Supply.

Ke Yan, CFA, FRM

Vesync (2148 HK): Proposed Privatisation at HK$5.60 Fair and Reasonable

​Vesync's major shareholders propose to privatise it at HK$5.60, a 33.3% premium. We consider this a fair and reasonable price based on PER, P/B,...

Osbert Tang, CFA

Haier Smart Home is less exposed to real estate market than expected. Digitalisation and efficiency improvements are driving margin; and...

Vesync's profit growth slows in 2H24, indicating increased operating pressure and affirming privatisation as an exit opportunity. Its non-China...

Vesync's major shareholders propose to privatise it at HK$5.60, a 33.3% premium. We consider this a fair and reasonable price based on PER, P/B,...