In today’s briefing:
- Goldlion Holdings (533 HK): An Attractive Spread Ahead of the Vote on 9 May
- Goldlion Holdings (533 HK): 9th May Vote On Tsang Family’s Offer
- Huge Dental Pre-IPO – China’s Leading Dental Materials Player Rides Industry Tailwinds
- PC 1Q25: 5% YoY Growth but Shipments Inflated Ahead of US Tariffs. Dream of a Refresh Cycle Continue
- Chagee Holdings IPO Valuation Analysis
- [BYD Company (1211 HK, BUY, TP HK$400) TP Change]: Better than Expected ASP Is the Positive Surprise
- Lucror Analytics – Morning Views Asia
- Oriental Watch (398 HK): Navigating a Tough Demand Environment With 65% of Market Cap in Cash
- Asia Real Estate Tracker (10-Apr-2025): Goodman investing $722M in Sydney data centre
- Anta Sports (2020 HK): 1Q25 Stable, yet the Margin Remains Our Concern
Goldlion Holdings (533 HK): An Attractive Spread Ahead of the Vote on 9 May
- Goldlion Holdings (533 HK)’s IFA considers Mr Tsang’s HK$1.5232 per share offer fair and reasonable. The vote is on 9 May.
- The key condition is the scheme approved by at least 75% disinterested shareholders (<10% disinterested shareholders rejection). FMR holds a blocking stake but should be supportive.
- The offer is reasonable compared to peer multiples and historical trading ranges. At the last close and for the 10 July payment, the gross/annualised spread is 4.3%/19.0%.
Goldlion Holdings (533 HK): 9th May Vote On Tsang Family’s Offer
- On the 17th December 2024, Goldlion Holdings (533 HK), an apparel manufacturer/distributor, announced an Offer, by way of a Scheme, from the Tsang family (2.95% stakeholder), for shares not held.
- The Tangs are offerings $1.5232/share (declared final), a 24.85% premium to last price, but a 71% premium to undisturbed. Despite the very low price-to-book multiple, this transaction looks done.
- The Scheme Doc is now out, with a Court Meeting on the 9th May, with payment on or before the 10th July. The IFA (Altus Capital) says “fair & reasonable“.
Huge Dental Pre-IPO – China’s Leading Dental Materials Player Rides Industry Tailwinds
- HD as a leading dental materials player in China, has achieved robust topline growth over the track record period, driven by its core product lines and favorable industry tailwinds
- The company generates most of its revenue from the Chinese market, relying heavily on a distribution-led strategy for market expansion.
- Some areas of concern include signs of a slowdown in growth and potential margin compression if the shift in product mix continues.
PC 1Q25: 5% YoY Growth but Shipments Inflated Ahead of US Tariffs. Dream of a Refresh Cycle Continue
- PC units grew by 1% in 2024, accelerating to 5% YoY in 1Q25. Best performers: Apple, Lenovo. Higher shipments to the US ahead of potential import tariffs but flat end-demand.
- ~70% of Computers are Made in China, US consumes 25% of total PC. The supply chain is accelerating relocating US-purchased PC out of China, this should be done by end-2025.
- There is a risk of over-built and over-stocking in my view if PC Brands are too optimistic on Windows 10 end-of-support and AI PC upgrades.
Chagee Holdings IPO Valuation Analysis
- Our base case valuation of Chagee Holdings is target price of $46.7 per share, representing 67% higher than the high end of the IPO price range ($28 per share).
- Our base case valuation is based on a P/E of 21.4x on our estimated net profit of 2.9 billion RMB in 2025.
- We used a very conservative valuation multiple, mainly due to the extremely high macro risks related to the ongoing tariff dispute between China and the United States.
[BYD Company (1211 HK, BUY, TP HK$400) TP Change]: Better than Expected ASP Is the Positive Surprise
- BYD reported C1Q25 net profit up 86%-119% YoY, with the midpoint exceeds our estimate/consensus by 12%/20%.
- We believe this driven by better ASP mix of its products, among other factors;
- We believe a possible China-EU deal on EV market access can be positive for BYD. We raise the TP to HK$400 and place BYD back to TOB BUY.
Lucror Analytics – Morning Views Asia
- In today’s Morning Views publication we comment on developments of the following high yield issuers: Meituan, China Jinmao, Lenovo, AAC Technologies, China Hongqiao
- US President Donald Trump has announced on Truth Social a 90-day pause on reciprocal tariffs for more than 75 countries, with these countries to be charged a “substantially lowered reciprocal tariff” of 10% during this transition.
- That said, Mr Trump raised tariffs on China to 125% (from 104%), after China raised its own tariffs on US imports to 84% (from 34%) in a retaliatory move earlier yesterday.
Oriental Watch (398 HK): Navigating a Tough Demand Environment With 65% of Market Cap in Cash
- Oriental Watch (398 HK) is navigating a challenging demand environment with Watch & Jewelry sales in HK subdued at -21% YoY for Jan-Feb 2025, according to the Department of Statistics.
- The bright spot is that China sales continue to hold up and account for more than 73% of the company’s sales. Fortunately, Rolex could also increase its allocation to China.
- We expect a 15%-20% YoY drop in FY25 profits. A 100% payout results in a 12.0% dividend yield, and 65% of the market capitalization is in cash.
Asia Real Estate Tracker (10-Apr-2025): Goodman investing $722M in Sydney data centre
- Goodman announces $722M investment in 90MW data centre ‘Project Mars’ in Sydney, expanding their data centre portfolio.
- Executives from Partners Group, CDPQ, and ESR join the speaker list for Singapore Forum, a key event in the data centre industry.
- Singapore’s GIC collaborates with Alianza in a $329M venture to establish a data centre presence in Brazil, a promising market.
Anta Sports (2020 HK): 1Q25 Stable, yet the Margin Remains Our Concern
- 1Q25 sales for Anta Sports Products (2020 HK) continue the trend in 4Q24, with ANTA and FILA brands recording a healthy high-single-digit YoY increase.
- With the US-China trade war, the negative impact on consumer appetite is uncertain. It is difficult to project the 2Q-4Q25 revenue and margin outlook.
- Its associate, Amer Sports (AS US), has 36% of revenue from the Americas, while the Jack Wolfskin acquisition has limited contribution. Its 50% premium to sector caps upside.
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