In today’s briefing:
- Poon Moves On Dickson Concepts (113 HK)’s Cash Hoard?
- Pop Mart (9992 HK): Eye-Popping Growth. Is It the Next Pokémon for Kidults?
- Dickson Concepts (113 HK): Controlling Shareholder to Privatise a Negative EV Play?
- Sheng Siong Group Ltd: Inflection Point for a Great Performer
- The Beat Ideas: Park Hotels: Serving Long-Term Value
- Aspirasi Hidup Indonesia (ACES IJ) – Growing AZKO Stores and Private Label
- VNCE: Snapping the Store; Moving to Another Winning Season; Reiterate Buy, PT
- Ather Energy IPO – Still Not Cheap Enough
- Kimberly-Clark De Mexico-A – Actinver Research
- It Is Not a Question of Whether Investment in Growth or Shareholder Return Is Better
Poon Moves On Dickson Concepts (113 HK)’s Cash Hoard?
- Dickson Concepts Intl (113 HK) (DC), which is principally engaged in the sale of luxury goods business, is suspended pursuant to the Takeovers Code.
- DC’s Chairman, Dickson Poon (& spouse), hold 60.5%. Super-net-cash rich DC is trading in sync with historical metrics. 1H25 (Mar Y/E) net profit dropped 40.1%. Shares are roughly flat yoy.
- Given DC’s cash hoard, taking the company private makes sense. I doubt Poon is seeking to exit his stake.
Pop Mart (9992 HK): Eye-Popping Growth. Is It the Next Pokémon for Kidults?
- Pop Mart International Group L (9992 HK) ’s stock has nearly doubled in three months, fueled by surging revenue and the breakout popularity of its Labubu dolls.
- Driven by strong international expansion and solid omni-channel demand in its home market, Pop Mart reported over 165% revenue growth in 1Q2025 compared to the same period last year.
- Investors remain split on whether Pop Mart’s unconventional products and marketing are driven by lasting fandom or just a passing trend.
Dickson Concepts (113 HK): Controlling Shareholder to Privatise a Negative EV Play?
- Dickson Concepts Intl (113 HK) has entered a trading halt “pending the release of an announcement pursuant to The Code on Takeovers and Mergers, which constitutes inside information of the Company.”
- The controlling shareholder (Sir Poon) is likely seeking to launch a privatisation through a Bermuda scheme, particularly as the shares trade below net cash.
- While no disinterested shareholder holds a blocking stake, the headcount test and a decent AGM participation rate necessitate an attractive offer. The potential offer price range is HK$5.60-9.24.
Sheng Siong Group Ltd: Inflection Point for a Great Performer
We analysed Sheng Siong’s success over the years to see what its secret sauce is and what made the retailer so successful.
It has punched its weight above its competitors with a set of strong financial metrics. Its ability to generate free cash flow and achieve a high return on equity are truly impressive.
However, Sheng Siong is at an inflection point now as its revenue and net profit have stagnated since the pandemic.
The Beat Ideas: Park Hotels: Serving Long-Term Value
- Apeejay Surrendra Park Hotel (PARK IN), With a sharp pivot post-IPO, it has deleveraged, scaled Flurys to 100 outlets, and launched ARR-led palace properties, all while staying asset-light and cash-smart.
- F&B now contributes nearly half of revenues, ARRs are climbing, and legacy land is being monetised to fund INR 500 crore of capex without debt.
- Earlier seen as a traditional hotel chain, Park now to be looked as a brand with strong visibility, smart capital use, and fresh retail momentum.
Aspirasi Hidup Indonesia (ACES IJ) – Growing AZKO Stores and Private Label
- Aspirasi Hidup Indonesia (ACES IJ) released a solid set of FY2024 results, with SSSG and headline coming in ahead of expectations, with the company expanding its stores by 20 outlets.
- The key concern from the results was the slower guidance for SSSG and sales for 2025, despite a more aggressive store rollout this year, especially outside Java.
- Aspirasi Hidup Indonesia continues to push the AZKO brand with higher promotional spend, offset by the lack of royalties to ACES US. Guidance looks conservative and valuations look attractive historically.
VNCE: Snapping the Store; Moving to Another Winning Season; Reiterate Buy, PT
- We are reiterating our Buy rating, projections and $6 price target for Vince Holding after visiting stores in Connecticut, Long Island and New Jersey.
- We believe the company has continued to drive strong in-store results with impressive product offerings, continued expansion of the color palette, a deepening commitment to the men’s arena (and accessories), a focus on key tops and providing seasonal twists to key items such as sweaters and dresses.
- Further, Vince continues to focus on full price selling, maintaining discipline during key events in terms of overall price cuts, which we believe will help overall returns.
Ather Energy IPO – Still Not Cheap Enough
- Ather Energy is now looking to raise about US$350m in its upcoming India IPO.
- Ather is a pure play electric vehicle company in India designing and developing E2Ws, battery packs, charging infrastructure, associated software and accessories, also manufacturing battery packs and assembling E2Ws in-house.
- In our previous note, we looked at the company’s past performance. In this note, we talk about the updates since then and valuations.
Kimberly-Clark De Mexico-A – Actinver Research
- Revenues of P$13.8bn grew only 0.3% YoY, below our estimates, with both Consumer and Away from Home declining (1% and 4%, respectively), vs our low growth estimates, while Exports grew 21%, better than expected and aided by FX tailwinds.
- Margins were on average in line with our estimates, contracting YoY and with EBITDA margin of 25.1% in line with long-term target range of 25-27%.
- At the gross margin level, results were underperforming amid a 410bps YoY contraction, yet EBIT and EBITDA margins contracted less and were slightly above our cautious estimates.
It Is Not a Question of Whether Investment in Growth or Shareholder Return Is Better
- While the absolute amount of share repurchases has increased, many companies face challenges in using cash, given the slow growth in ROE and depth of equity capital over a decade.
- While growth investment should increase corporate value, it’s important for managers to manage to earn returns commensurate with investment risk, and to return cash to shareholders without taking unnecessary risks.
- The question is not whether investment in growth or shareholder return is better, but whether the company was managing its business in a shareholder-friendly manner.
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