Plover Bay Technologies: Riding Through Market Volatility
Plover Bay Technologies (1523 HK) has experienced an 18% correction from its previous high in November 2024, primarily due to concerns over potential US tariffs and investigations into Chinese cyberattacks involving TP-Link routers. However, Plover Bay stands out with its unique positioning. Its Peplink routers are manufactured in Taiwan by contract manufacturers, ensuring they are unaffected by US tariffs imposed on Chinese and Hong Kong goods. Furthermore, these routers do not store user data and undergo regular security audits by esteemed clients such as Google.
The company remains on a solid growth trajectory, with net profit projected to grow by 35% in 2024, 22% in 2025, and 19% in 2026. This growth is driven by continuous demand across key verticals, particularly in the maritime and public safety sectors, stringent cost control measures, and strong operating leverage.
Short-term catalysts for Plover Bay include the potential announcement of a higher-than-expected 2024 dividend payout and a positive 2025 outlook by the end of February 2025. Additionally, further collaborations with Starlink could bolster its market appeal. Market volatility stemming from fluctuating US tariff policies may present buying opportunities for investors.
Valuation and Key Metrics
- Trading at 14.2x one-year forward PE, slightly above its historical mean of 12.5x (2018-2024).
- Projected dividend yield: 6.6% for 2025 and 7.8% for 2026.
- Revenue breakdown: North America contributes 64.2%, EMEA (Europe, Middle East, and Africa) accounts for 25.7%, and Asia contributes 7.1%.
- Key financials (2024-2026 forecasts): Net turnover expected to grow from US\$116M in 2024 to US\$166M in 2026, with net profit increasing from US\$38M to US\$55M.
Plover Bay’s robust fundamentals, strong dividend prospects, and market opportunities position it as a compelling choice for investors seeking growth and stability.
JBM (Healthcare): Strengthening Brand Awareness and E-Commerce Expansion
JBM (Healthcare) (2161 HK) has been riding on the success of its iconic product, Flying Eagle medicated oil. With effective marketing campaigns and the endorsement of Raymond Lam as its brand ambassador, the company has significantly boosted its brand awareness. Notable advertising efforts, including campaigns at Hong Kong’s Star Ferry Pier and on TV channels, have cemented its market presence.
Sales from cross-border e-commerce platforms such as JD.com, Alibaba Health, and Tmall now account for 20% of JBM’s total revenue. The company aims to expand its digital footprint further, with iconic products like Ho Chai Kung and Po Chai Pills leading the charge. JBM also aspires to deepen its presence in Southeast Asia, particularly in Singapore and Malaysia.
Management projects a 15-20% CAGR in net profit over the next 2-3 years, driven by enhanced brand awareness, robust growth in iconic products, and the expansion of cross-border e-commerce. Shareholder returns are also a priority, with the possibility of increasing the payout ratio beyond 50% (FY24: 51%).
Valuation and Key Metrics
- Trading at a trailing 12-month dividend yield of 5.1%.
- Management anticipates higher-than-expected dividend payouts and potential share buyback initiatives as catalysts.
JBM’s strategic focus on marketing, e-commerce growth, and shareholder returns makes it a promising player in the healthcare sector.
Jacobson Pharma Corporation: Expanding Horizons with Generic and Specialty Medicines
Jacobson Pharma Corporation (2633 HK) is a leading provider of generic drugs in Hong Kong, boasting a diversified portfolio of over 3,000 SKUs. With more than 80% market share for tender offers to the Hospital Authority (its largest customer), Jacobson derives approximately one-third of its revenue from this segment.
The company is making waves with its novel drug, the Arsenic Trioxide oral solution, the first drug developed in Hong Kong. Currently supplied to the Hospital Authority and hospitals in the Greater Bay Area, the drug has secured US FDA approval and is awaiting approval from the EU and Singapore. Jacobson is optimistic about its overseas market expansion, targeting over 5,000 cases annually compared to 30 cases annually in Hong Kong. Capacity expansion is underway to meet this demand.
Looking ahead, Jacobson plans to augment its portfolio with in-licensed drug products, including injectables, specialized generics, and biosimilars, to bolster long-term competitiveness. Management expects high single-digit organic revenue growth annually for generic drugs over the next three years and aims to increase the dividend payout ratio to 50% from 40% in FY24.
Valuation and Key Metrics
- Trading at a trailing 12-month dividend yield of 5.3%.
- Key catalyst: Faster-than-expected commercialization of the Arsenic Trioxide oral solution.
Jacobson Pharma’s focus on innovation, market expansion, and shareholder value positions it as a key player in the pharmaceutical industry.
