However, Sichuan Baicha Baidao Industrial (HKG: 2555) aka Chabaidao just had an IPO and apparently it was a dud and there are yet more bubble tea IPOs in the pipeline... Mixue has outlets here in Kuala Lumpur - reasonably priced too but have not tried anything yet... They always seem to have new things advertised...
Thanks. Yes the IPO didn't went as well as they thought they would. Keep in mind they did went public at a P/S valuation that was over two times that of Nayuki.
Mixue is definitely on the forefront, but their target market is a bit different to that of Nayuki. We'll see if they can enter the premium market.
For Tanjin developments why is mean reversion a thesis? Is there a catalyst for it to mean revert? Like I feel like "mean reversion" as a thesis could apply to any number of Chinese stocks.
I think mean reversion is part of every value investing thesis. However it is not always the mean one.
For Tianjin development however, it trades at 0.14x P/B and has good capital returns. Given that I get a decent return from dividends alone, it is very likely that as sentiment towards China/HK shifts that it mean reverts due to the shareholder returns.
Well with coal names, they aren't growthy. For me the biggest point was shareholder returns (with Xiaomi and Nayuki being the big exceptions). What I found out was that most that had shareholder returns that weren't declining, were decently growing. Tiajin is a bit of an exception being exceptionally cheap, good shareholder returns and recovering.
Also for me, I do wonder if it is worth it to buy companies at 2-3x EV/EBIT with medicore shareholder returns and no growth, when for 4-5x you can have companies that have both.
Given the amount of fraud I found, I focused on the dividends/buybacks and thus ended with more growthy names.
I included your write-up in my Emerging Market Links + The Week Ahead (April 29, 2024) for today: https://emergingmarketskeptic.substack.com/p/emerging-markets-week-april-29-2024
However, Sichuan Baicha Baidao Industrial (HKG: 2555) aka Chabaidao just had an IPO and apparently it was a dud and there are yet more bubble tea IPOs in the pipeline... Mixue has outlets here in Kuala Lumpur - reasonably priced too but have not tried anything yet... They always seem to have new things advertised...
Thanks. Yes the IPO didn't went as well as they thought they would. Keep in mind they did went public at a P/S valuation that was over two times that of Nayuki.
Mixue is definitely on the forefront, but their target market is a bit different to that of Nayuki. We'll see if they can enter the premium market.
For Tanjin developments why is mean reversion a thesis? Is there a catalyst for it to mean revert? Like I feel like "mean reversion" as a thesis could apply to any number of Chinese stocks.
I think mean reversion is part of every value investing thesis. However it is not always the mean one.
For Tianjin development however, it trades at 0.14x P/B and has good capital returns. Given that I get a decent return from dividends alone, it is very likely that as sentiment towards China/HK shifts that it mean reverts due to the shareholder returns.
Another 1 on my bingo card
882! I enjoyed your writeup
Tx, great to hear!
I was afraid that the story was a bit too complex.
https://jaminvest.substack.com/p/hk-13-tianjin-development
I guess, in general, you prefer the more ‘growthy’ names? Great write-up on the bubble tea industry.
Personally, I put more focus on businesses that are not in the most competitively-intense industries.
Well with coal names, they aren't growthy. For me the biggest point was shareholder returns (with Xiaomi and Nayuki being the big exceptions). What I found out was that most that had shareholder returns that weren't declining, were decently growing. Tiajin is a bit of an exception being exceptionally cheap, good shareholder returns and recovering.
Also for me, I do wonder if it is worth it to buy companies at 2-3x EV/EBIT with medicore shareholder returns and no growth, when for 4-5x you can have companies that have both.
Given the amount of fraud I found, I focused on the dividends/buybacks and thus ended with more growthy names.
Luckily, there is no shortage of HK stocks with solid capital returns.
Yeah it is insane. And given the low valuations, I often focused a bit on quality too.
I like the write-up, but honestly struggle with HK stocks without shareholder return. Guess the capital allocation plan is just growth for now, right?
they did some share buybacks, which is why they got on my radar in the first place. It is not a lot, but it is something.
Well they said that because competition is fierce it is likely they will need the cash
Thanks , will do.
I am tied between 315 and 1310 , the later seems to have the optionality for a takeover any thoughts ?
With 1310 you are basically betting on a takeover, because at least IMO the business itself isn't as good as 315.
But I am more often wrong than I am right, so the best thing would be reading both annual reports and the lastest quarterlies/earnings and check again