I recently published an investment thesis exclusive to the investment platform, Seeking Alpha, where I will be covering recent and forthcoming initial public offerings (IPOs). The article is on the Chinese maker of skincare products targeted at people with “problematic skin”, Park Ha Biological Technology Co., Ltd. (PHH). From the executive summary of the article is the following:
- Park Ha Biological Technology operates in a large, fast-growing market but faces intense competition and rising costs, impacting profitability and free cash flow.
- The company’s dual-sales strategy and diverse product range enhance customer retention, but declining franchise numbers raise sustainability concerns.
- High insider ownership aligns interests but increases stock volatility, while capital controls in China pose risks to accessing funds.
- Current valuation implies a 3,492% NOPAT growth, making the stock a “Hold” due to profitability challenges and valuation risks.
The rest of the article is available here.