In today’s briefing:
- HKEx Consultation Paper – What Matters for ECM Investors
- Guming Holdings (Good Me) IPO: The Bull Case
- Asia Real Estate Tracker (21-Jan-2025): Henderson sells Kowloon project to Miramar for $400M.
- Fu Shou Yuan (1448.HK) – Investment Strategy May Need to Be Adjusted
- Guming (Good Me) IPO: Key Facts and Financials at First Glance
- SITC International (1308 HK): Beating Expectations Again
- Lucror Analytics – Morning Views Asia
HKEx Consultation Paper – What Matters for ECM Investors
- Stock Exchange of Hong Kong issued a consultation paper titled Proposals to Optimise IPO Price Discovery and Open Market Requirements with new mechanisms proposed for the IPO in the future.
- In this note, we summarize key points for ECM investors and analyze the impact from a historical perspective the impact for ECM investors.
- We are of the view that overall the changes will benefit ECM investors by reallocating a portion of the profits from cornerstone investors.
Guming Holdings (Good Me) IPO: The Bull Case
- Guming Holdings (GUM HK) (Good me), a freshly-made tea store brand, is pre-marketing an HKEx IPO to raise US$300 million, according to press reports.
- Guming is China’s largest mid-priced freshly-made tea store brand and the second largest freshly-made brand across all price ranges, regarding GMV in 2023.
- The bull case rests on a rising market share, strong franchisee profitability, top-tier revenue growth, high margins, cash generation and a strong balance sheet.
Asia Real Estate Tracker (21-Jan-2025): Henderson sells Kowloon project to Miramar for $400M.
- Henderson sells Kowloon project to Miramar Hotel for $400M in a strategic move to shift focus and secure a profitable deal.
- CapitaLand shifts Tan to commercial REIT and hires Yong to lead Malaysia Trust, showing active leadership changes within the company.
- CapitaLand India Trust initiates $54M Hyderabad IT Park revamp, signaling a significant investment in the Indian real estate market.
Fu Shou Yuan (1448.HK) – Investment Strategy May Need to Be Adjusted
- Fu Shou Yuan’s performance in full-year 2024 is likely to fall short of expectations. The current pain point is declining performance growth due to difficulty of expanding beyond Shanghai region.
- If Fu Shou Yuan’s dividends/stock buybacks are lower-than-expected, we don’t think the stock is worth holding for the long term, since long-term revenue growth rate would fall to single digit.
- Since high growth is difficult to achieve, it’s better to buy at a low price (e.g. PE of 10x).When valuation bounces back to 15x PE, investors could consider taking profits.
Guming (Good Me) IPO: Key Facts and Financials at First Glance
- Guming Holdings (GUM HK), a leading player in China’s freshly-made branded beverage sector, is widely expected to launch its IPO soon.
- Guming’s Good Me brand is China’s largest mid-priced freshly-made tea store brand in terms of store count as well as GMV.
- Guming reported robust revenue and profit growth for first nine months of 2024 led by new store openings, although same-store sales declined due to rising competition and weak consumer spending.
SITC International (1308 HK): Beating Expectations Again
- SITC International (1308 HK)‘s positive profit alert beat the FY24 forecast by 12%. It also suggests an acceleration in growth to 1.9-2.1x in 2H24, from +13% in 1H24.
- The muted share price performance reflects concerns about an influx of capacity, intra-Asia demand outlook, and freight rate prospects. We refute such worries.
- It stands on an attractive dividend yield of 11.1% for FY24. Even under conservative earnings forecasts, its 8.1% and 6.6% yields for FY25 and FY26 are appealing.
Lucror Analytics – Morning Views Asia
- In today’s Morning Views publication we comment on developments of the following high yield issuers: New World Development, China Vanke, Vedanta Resources
- The US market was closed for the Martin Luther King Jr Day holiday yesterday.
- In China, the one-year and five-year loan prime rates (quoted by commercial banks) have been maintained at 3.10% and 3.60%, respectively.
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