Excellent comment, Daniel. Lisheng Pharma seems to be the main issue here; full consolidation (of about RMB 3.4bn in net financial assets) while $882 only holds an effective 33% interest.
Thank you, Jam_invest! It appears that Chinese stocks are currently experiencing the '2022 Big US Tech' time. There seem to be numerous affordably priced opportunities within this market. I appreciate your notification and will take the time to thoroughly read your post.
Positive Profit Alert: Tianjin Development Holdings expects a 70-80% increase in consolidated net profit for 2023 YoY, mainly due to one-off gains, increased share of net profit from associates, hotel business profit, and reduced exchange losses.
Tianjin Development's (http://0882.HK) 34%-owned subsidiary, Tianjin Lisheng Pharmaceutical, disclosed its 2023 preliminary results. Earnings per share surged 284% YoY, with total assets up by 9.4%
Yea, its not clear if they have controlling stakes in the businesses and there might be alot of corp governance issues in them. Will still link to this post in my "Emerging Market Links + The Week Ahead (February 19, 2024)" for later today.
Thank you for mentioning the post! The ownership interests in the subsidiaries and investments have been disclosed and are illustrated on page 4 of the most recent interim report.
Joe Studwell’s books, "Asian Godfathers: Money and Power in Hong Kong" https://amzn.to/3GserbE and "Southeast Asia and How Asia Works" https://amzn.to/3IfrFKe are a bit dated BUT are still good reads on how Asian conglomerates tend to operate e.g. Jardines, etc You never know who actually owns or controls how much of something, minority shareholders are often treated badly and then there are the front groups :)
My model relies on the current EPS and the present value of future earnings, which depend on the growth rates in each scenario and the terminal multiple
Will link to this post in my "Emerging Market Links + The Week Ahead (February 19, 2024)" for later today. Given the company's conglomerate nature in varied businesses and how its unclear what % stakes they have in them (controlling?), there would be better or less risky undervalued Chinese or HK stocks to look at... But you are right about the lack of coverage - have not come across this stock on SmartKarma or being mentioned by funds...
Execution and capital allocation leave enough room for improvement. 😉 At least Otis is doing a good job, shifting to maintenance work. 882 only needs to start forwarding the Otis divies to shareholders. 🤞
Excellent comment, Daniel. Lisheng Pharma seems to be the main issue here; full consolidation (of about RMB 3.4bn in net financial assets) while $882 only holds an effective 33% interest.
What is your broader opinion on $882?
Lo price but management is not on your side.
Thanks for the write-up, Phil. Definitely, $882 deserves more love!
There have been a select few trying to spread the message. I mention them in the post below, with some references to other write-ups.
https://jaminvest.substack.com/p/hk-3-dollars-trading-for-pennies
Thank you, Jam_invest! It appears that Chinese stocks are currently experiencing the '2022 Big US Tech' time. There seem to be numerous affordably priced opportunities within this market. I appreciate your notification and will take the time to thoroughly read your post.
Tianjin Development’s 2023 financial results highlighted:
- Profit for the year increased by 94% YoY to US$125m (HK$982m).
- Total dividends for the year increased by 37% to US$0.016 (HK$0.1225). Based on current pricing, this translates to a dividend yield of 7.2%.
Positive Profit Alert: Tianjin Development Holdings expects a 70-80% increase in consolidated net profit for 2023 YoY, mainly due to one-off gains, increased share of net profit from associates, hotel business profit, and reduced exchange losses.
Tianjin Development's (http://0882.HK) 34%-owned subsidiary, Tianjin Lisheng Pharmaceutical, disclosed its 2023 preliminary results. Earnings per share surged 284% YoY, with total assets up by 9.4%
I think your cash total include consolidated partly-owned subss. These $ are not all available to parent.
Yea, its not clear if they have controlling stakes in the businesses and there might be alot of corp governance issues in them. Will still link to this post in my "Emerging Market Links + The Week Ahead (February 19, 2024)" for later today.
Thank you for mentioning the post! The ownership interests in the subsidiaries and investments have been disclosed and are illustrated on page 4 of the most recent interim report.
Joe Studwell’s books, "Asian Godfathers: Money and Power in Hong Kong" https://amzn.to/3GserbE and "Southeast Asia and How Asia Works" https://amzn.to/3IfrFKe are a bit dated BUT are still good reads on how Asian conglomerates tend to operate e.g. Jardines, etc You never know who actually owns or controls how much of something, minority shareholders are often treated badly and then there are the front groups :)
how did you came up with your valuations?
Hi Mendo, I have developed my own model.
but could you tell at least roughly, on whivh principles is the model based?
My model relies on the current EPS and the present value of future earnings, which depend on the growth rates in each scenario and the terminal multiple
Will link to this post in my "Emerging Market Links + The Week Ahead (February 19, 2024)" for later today. Given the company's conglomerate nature in varied businesses and how its unclear what % stakes they have in them (controlling?), there would be better or less risky undervalued Chinese or HK stocks to look at... But you are right about the lack of coverage - have not come across this stock on SmartKarma or being mentioned by funds...
Execution and capital allocation leave enough room for improvement. 😉 At least Otis is doing a good job, shifting to maintenance work. 882 only needs to start forwarding the Otis divies to shareholders. 🤞