1) Wang is 54. Still seems very driven from the few interviews he does
2)All 3 cities are performing about in line with Tier 2 cities in general - GDP growth in line/marginally above China as a whole, beneficiary of net migration from rural areas/lower tier cities.
3)I see most of the return coming from the dividend. Stock price appreciation would occur on rate cuts (the last fed cut saw it jump ~8%) and likely if HK gets appraised significantly higher. I have no clue what the Fed will do so don't feel comfortable predicting price appreciation.
4)I'm doing a writeup on SFH for the dual listing where I'll go into more detail on this, but two big reasons are imo
- Proximity between factories and consumers. In the west, you need to store product somewhere, whether amazon or another warehouse when it's offloaded from containers. In china, you can just keep it at the factory and ship it out when an order comes in, reducing cost/complexity while not increasing delivery time too much. Temu/Shein are trying to recreate this model in the West which is interesting to watch
- Different e-comm algos. On amazon you rank by having Prime/ fulfilled by amazon. FBA costs ~30% of GMV so fairly expensive. Whereas platforms like PDD optimise for GMV and rank the cheapest first, and they dont care if you deliver it by limousine or carrier pigeon. Having lots of small packages ends up cheaper for each individual seller, so you end up with insane numbers like 132bn packages delivered in 2023, 80% of which are e-comm
Great article. It would be helpful to mention the ticker symbol near the start.
Thanks, updated. 👍
Nice write up. But 10% yield a slight stock price depreciation could be the long term outcome?
Solid cash flow
how old is Wang Wei, the founder, chairman, CEO and 53% owner of SFH ?
how are the following cities doing in economic and net migration terms?:
Changsha, Foshan and Wuhu
how much of the upside in price appreciation do envisage?
"A single order with 5 items would result in 5 small packages with AOV <US$2, rather than 1 large package as
What are the reasons?
1) Wang is 54. Still seems very driven from the few interviews he does
2)All 3 cities are performing about in line with Tier 2 cities in general - GDP growth in line/marginally above China as a whole, beneficiary of net migration from rural areas/lower tier cities.
3)I see most of the return coming from the dividend. Stock price appreciation would occur on rate cuts (the last fed cut saw it jump ~8%) and likely if HK gets appraised significantly higher. I have no clue what the Fed will do so don't feel comfortable predicting price appreciation.
4)I'm doing a writeup on SFH for the dual listing where I'll go into more detail on this, but two big reasons are imo
- Proximity between factories and consumers. In the west, you need to store product somewhere, whether amazon or another warehouse when it's offloaded from containers. In china, you can just keep it at the factory and ship it out when an order comes in, reducing cost/complexity while not increasing delivery time too much. Temu/Shein are trying to recreate this model in the West which is interesting to watch
- Different e-comm algos. On amazon you rank by having Prime/ fulfilled by amazon. FBA costs ~30% of GMV so fairly expensive. Whereas platforms like PDD optimise for GMV and rank the cheapest first, and they dont care if you deliver it by limousine or carrier pigeon. Having lots of small packages ends up cheaper for each individual seller, so you end up with insane numbers like 132bn packages delivered in 2023, 80% of which are e-comm
Is the dividend tax for non-HK investors? From someone who has not invested in HK equities.
HK doesn't charge dividend witholding tax for foreigners, but you may still need to pay your domestic dividend tax depending on where you live