In today’s briefing:
- Chagee Holdings (CHA US) IPO: The Bull Case
- Chagee Pre-IPO – Market Leading Growth but Showing Signs of Fatigue
- HONG KONG ALPHA PORTFOLIO (March 2025)
- TESLA’S Outlook After Rumors Elon Musk Will Step Back from DOGE
- Pre-IPO Chagee Holdings – The Business Model, the Concerns Behind and Valuation Outlook
- Sarimelati Kencana (PZZA IJ) – Profitable New Beginnings
- Morito (9837 JP) – Operating Profit for FY25/11 Is Recording a New High…
- LifeVantage Corporation – MindBody Launches in International Markets
- BWMX: Snapping the Catalog: Spring Drives Newness, Higher Prices; Reiterate Buy
- What’s New(s) in Amsterdam – 2 April (ING Group | Unilever | Alfen)
Chagee Holdings (CHA US) IPO: The Bull Case
- Chagee Holdings (CHA US), a leading premium tea drinks brand, is seeking to raise US$400-500 million through a Nasdaq IPO.
- According to iResearch, as of December 31, 2024, Chagee was the largest premium freshly made tea drink brand in China by the number of stores.
- The bull case rests on a strong brand, leading market share, peer-leading revenue growth, top-tier profitability and cash generation.
Chagee Pre-IPO – Market Leading Growth but Showing Signs of Fatigue
- Chagee Holdings (CHA US) is planning to raise up to US$500m through its upcoming US IPO.
- Chagee is a leading premium tea drinks brand, serving healthy and delicious freshly-made tea drinks.
- In this note, we look at the firm’s past performance.
HONG KONG ALPHA PORTFOLIO (March 2025)
- The Hong Kong Alpha simulated portfolio returned 0.97% in March outperforming its benchmark by 1.1%. Since inception the portfolio has outperformed Hong Kong indexes by 8% to 11%.
- The portfolio has generated alpha while maintaining a correlation of 0.8 and a beta of 1.05. The HK Alpha portfolio has a Sharpe ratio of 2.19 YTD.
- On 3/31/25 we sold Shanghai Electric Group Company (2727 HK) , Citic Securities (H) (6030 HK) , Sands China (1928 HK) , and Sunny Optical Technology Group (2382 HK)
TESLA’S Outlook After Rumors Elon Musk Will Step Back from DOGE
- Politico just published a report saying that Elon Musk is about to Step Back from DOGE, if true, this could impact somehow Tesla (TSLA US) stock price.
- Death threats and the spate vandalism directed at Tesla (TSLA US)‘s cars, plus Musk being viewed as a potential political liability by members of the Trump Administration are the drivers.
- Tesla (TSLA US) brand has been heavily damaged by Musk involvement in politics, sales are falling gobally and competitors like BYD (1211 HK) are rising. The stock is short-term OVERBOUGHT.
Pre-IPO Chagee Holdings – The Business Model, the Concerns Behind and Valuation Outlook
- Chagee adopts the “1+1+9+N” business model, which ensures the successful replication of the single store model. However, we saw performance decline in 2024, and future performance growth sustainability is uncertain.
- In terms of valuation, comparable companies include Starbucks and MIXUE. We think valuation of Chagee should be lower than MIXUE and Starbucks as both have proved themselves in the industry.
- Future growth would inevitably slow down. Investors may need more ‘safety margins’ on valuation because despite short-term strong demand, investors need to be alert to the performance validation after IPO.
Sarimelati Kencana (PZZA IJ) – Profitable New Beginnings
- Sarimelati Kencana (PZZA IJ) booked a profit in 4Q2024, and the company will remain profitable in 1Q2024, with a strong uptick expected in 2Q2024 and a profit expected for FY2025.
- The company has been focused on reducing costs and improving efficiencies, booking a record gross profit margin in 4Q2024, and is now able to book a profit with lower sales.
- Sarimelati Kencana remains a leading quick-service food provider in Indonesia, with prospects improving as it starts to book sustainable profits, with significant upside if it books sales at pre-COVID levels.
Morito (9837 JP) – Operating Profit for FY25/11 Is Recording a New High…
- For FY2024/11, MORITO (hereafter, the Company) reported net sales of JPY 48,537 mn (+0.0% YoY), operating profit of JPY 2,868 mn (+16.4% YoY), ordinary profit of JPY 3,003 mn (+8.4% YoY), and profit attributable to owners of parent (hereafter, net profit) of JPY 2,572 mn (+16.0% YoY).
- Net sales rose slightly, but gross profit margin grew to 29.1%, marking record highs for net sales, operating profit, and ordinary profit.
- For FY2025/11, Morito projects net sales of JPY 53,000 mn (+9.2% YoY), operating profit of JPY 3,100 mn (+8.1% YoY), ordinary profit of JPY 3,200 mn (+6.5% YoY), and net profit of JPY 2,700 mn (+5.0% YoY).
LifeVantage Corporation – MindBody Launches in International Markets
- LFVN announced it is expanding its MindBody GLP- 1 System to markets outside of the US beginning on March 15.
- The MB System, as the product is known internationally, will be available to consultants and customers in Japan, and exclusively to consultants in most other markets, with those markets making the product available to customers at the end of April.
- Therefore, we do not expect the full benefit of the international launch to have an impact on financials until 4QFY25.
BWMX: Snapping the Catalog: Spring Drives Newness, Higher Prices; Reiterate Buy
- We are reiterating our Buy rating, projections and $22.50 price target for Betterware de Mexico after reviewing the April catalog.
- As we have seen since 4Q24, the April catalog registered higher YoY SKU levels (up 4%) and pricing (up 12%), as management focused on newness, complete collections and expanding higher end offerings.
- Further, even as the catalog shifts to Summer (with fans, cold drink holders and ice cube trays), the pace of discounting, while up YoY, continues to cool off month to month, with a 160 bp decline in the % of discounted items from March (to 28.2%, a low for 2025).
What’s New(s) in Amsterdam – 2 April (ING Group | Unilever | Alfen)
- In this edition: • ING Group | considering takeover in Italy • Unilever | acquires personal care brand Wild • Alfen | signs a multi-year framework agreement with Abloco Energy
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