Table of Contents
Executive summary ........................................................................... 3
Outlook: Desire for growth .......................................................................................................3
Valuation: Comments on individual stock’s acquisition strategy...............................................3
Risks ........................................................................................................................................3
Industry analysis................................................................................ 4
Introduction..............................................................................................................................4
Industry dynamics and operating model ...................................................................................4
The desire to fulfill growth ........................................................................................................7
Expect more growth .................................................................................................................8
Growth via acquisition: Obsession or way of the world?..........................................................9
Why do companies want more than one brand? ....................................................................13
Judgment day yet to come.....................................................................................................14
Acquisition history...................................................................................................................15
When anticipated growth slows down? De-rating of PE multiples.........................................17
Stock recommendations................................................................. 19
Introduction............................................................................................................................19
Parkson (3368.HK Buy) ...........................................................................................................20
Belle (1880.HK Buy) ................................................................................................................21
Li Ning (2331.HK Hold)............................................................................................................23
China Dongxiang (3818.HK Buy) .............................................................................................24
Ports (589.HK Buy)..................................................................................................................25