Equity, Bottom-up Analyst, Investics Research

Sameer Taneja

A buy-side analyst with over 18 years of experience investing in Asian markets and specializing in the mid-small cap space, emphasizing value investing in companies with good free cash flows/dividends and long-term holding horizons. 
Exempt Financial Adviser (EFA) under CrossASEAN Research Pte Ltd. It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity, Bottom-up Analyst

Investics Research

It is important to note that the information provided by Investics Research is based on publicly available data and own knowledge, which has been gathered and analyzed from a variety of sources. While every effort has been made to ensure the accuracy and completeness of the information provided, it is not guaranteed to be free from errors or omissions. All forecasts and estimates are based on information that has been obtained from public sources that are considered to be reliable. The sources include but are not limited to, company announcements, exchange filings, presentations, etc. Investics does not guarantee the accuracy and completeness of the forecasts, estimates, and/or other information.

Equity Bottom-up Research

Equity Bottom-Up

<p><a href="https://www.smartkarma.com/entities/china-lilang-ltd" target="_blank" data-smartkarma-citation="entities:16002:1" rel="noopener">China Lilang (1234 HK)</a> is a great value play with a tangible recovery story. <a href="https://www.smartkarma.com/entities/china-lilang-ltd" target="_blank" data-smartkarma-citation="entities:16002:1" rel="noopener">China Lilang (1234 HK)</a>  is a China-based company principally engaged in the manufacturing and wholesaling branded menswear and related accessories in China. The Company designs, sources, and manufactures business and casual apparel for men and sells them under the core brand of LILANZ and sub-brand of L2. The company's market capitalization is 6 bn HKD, so it could be on the radar of many funds that deal in the small and mid-cap space, focusing on dividend and value. </p>
<h3>The broad thesis for investment in this name is :</h3>
<p>1.  Value play trading at 8.0x FY20 and 6.9x FY21 with 27% of the market capitalization in cash.</p>
<p>2. Great dividend payout and yield of 9.3%</p>
<p>3. Recovery Underway: In its most recent quarterly operation release, the company stated recovery was underway with Q3 2020 retail sales registering a 5-10% growth and Golden Week sales surging by over 40% YoY.  </p>
<p>4. Management gave stock options to employees</p>
<p>We believe that this stock could easily trade back to its historical highs of 12-13 HKD/share if it continues to deliver in this challenging environment. H2 2020 earnings result will be a good catalyst for the company.</p>
<h3>
<strong>Risks</strong> </h3>
<ol>
<li> The company really doesn't have a good moat over its peers. </li>
<li>Inventory in the channels is currently very high.</li>
<li>The company doesn't have a strong presence in online sales.</li>
</ol>

China Lilang (1234 HK) is a great value play with a tangible recovery story. China Lilang (1234 HK)  is a China-based company principally engaged in the manufacturing and wholesaling branded menswear and related accessories in China. The Company designs, sources, and manufactures business and casual apparel for men and sells them under the core brand of LILANZ and sub-brand of L2. The company's market capitalization is 6 bn HKD, so it could be on the radar of many funds that deal in the small and mid-cap space, focusing on dividend and value. 
The broad thesis for investment in this name is :
1.  Value play trading at 8.0x FY20 and 6.9x FY21 with 27% of the market capitalization in cash.
2. Great dividend payout and yield of 9.3%
3. Recovery Underway: In its most recent quarterly operation release, the company stated recovery was underway with Q3 2020 retail sales registering a 5-10% growth and Golden Week sales surging by over 40% YoY.  
4. Management gave stock options to employees
We believe that this stock could easily trade back to its historical highs of 12-13 HKD/share if it continues to deliver in this challenging environment. H2 2020 earnings result will be a good catalyst for the company.

Risks 

 The company really doesn't have a good moat over its peers. 
Inventory in the channels is currently very high.
The company doesn't have a strong presence in online sales.


China Lilang: Value Play With a Recovery Story