Thanks for the write-up! There are unfortunately not that many people writing about HK stocks out there.
Have you looked also at Fairwood (0052 HK) or International Housewares Retail Co. Ltd. i.e. JHC (1373 HK) (own by David Webb)? All of these companies from LH Group (1978 HK) to 1373 to 0052 to even Giordano International Ltd. (0709 HK) (also own by David Webb) have for some reason free cash flow that's for years much higher than operating income. Do you know of a reason why that's the case? Is that something peculiar to HK? Which of the two would you say is more indicative of these companies' worth going forward?
Curious what your view is. Hope you keep the write-ups coming!
Nice writeup! The dividend payout is quite generous!
I have a few observations that would like to see your views
1. Yakiniku Like does poses a large threat to 牛角, e.g. Olympic used to have long queue, but after Yakiniku Like opened, I observe way less queue vs before. I also observe that 牛角 was doing quite a lot of promo lately. I don't have the exact number, but i think the Average dining value per customer will reduce, and thus the margin might be harder to maintain moving forward?
2. Although self-owned segment is less important, it still consist of ~25% of profit before tax. Their segment margin seems fluctuate quite a lot from 6.5-13%. (2018 at 6.5%, 2022 2H at 6% or 13% if take away provision). What type of margin you expect it to achieve?
1. I agree marign might be harder to maintain moving forward so 8% will be a better benchmark rather than 10%.
2. There are a lot of old stores in this segment which assets are fully depreciated. As such, you may not from the segment report that depreciation expenses are low. The margin fluctuation before 2020 include those Chinese restaurants which margin should be much lower. So I would expect to see the margin of this segment to be higher than that of 08 but lower than that of 2022 (taking away provisions).
Thanks for the write-up! There are unfortunately not that many people writing about HK stocks out there.
Have you looked also at Fairwood (0052 HK) or International Housewares Retail Co. Ltd. i.e. JHC (1373 HK) (own by David Webb)? All of these companies from LH Group (1978 HK) to 1373 to 0052 to even Giordano International Ltd. (0709 HK) (also own by David Webb) have for some reason free cash flow that's for years much higher than operating income. Do you know of a reason why that's the case? Is that something peculiar to HK? Which of the two would you say is more indicative of these companies' worth going forward?
Curious what your view is. Hope you keep the write-ups coming!
just curious if you have looked at 6686 (noah) or 889 (datronix) both look exceptionally cheap....
No unfortunately. We are not aware of significant capital return from these two companies.
Nice writeup! The dividend payout is quite generous!
I have a few observations that would like to see your views
1. Yakiniku Like does poses a large threat to 牛角, e.g. Olympic used to have long queue, but after Yakiniku Like opened, I observe way less queue vs before. I also observe that 牛角 was doing quite a lot of promo lately. I don't have the exact number, but i think the Average dining value per customer will reduce, and thus the margin might be harder to maintain moving forward?
2. Although self-owned segment is less important, it still consist of ~25% of profit before tax. Their segment margin seems fluctuate quite a lot from 6.5-13%. (2018 at 6.5%, 2022 2H at 6% or 13% if take away provision). What type of margin you expect it to achieve?
1. I agree marign might be harder to maintain moving forward so 8% will be a better benchmark rather than 10%.
2. There are a lot of old stores in this segment which assets are fully depreciated. As such, you may not from the segment report that depreciation expenses are low. The margin fluctuation before 2020 include those Chinese restaurants which margin should be much lower. So I would expect to see the margin of this segment to be higher than that of 08 but lower than that of 2022 (taking away provisions).