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Very interesting, nice work! Or shall I say... nice wok!

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Thanks DaBao! Great write-up.

>> How is the relationship structured between Nissin Foods and Nissin Foods Holding? Is there exclusivity for Nissin Foods to serve the Chinese market?

>> You show quite a small overall market share for Nissin Foods. Is that across the board, or are they stronger in certain sales channels, particular verticals, et cetera? What is stopping retailers to just allocate all shelve space to numbers 1 and 2, and some private label?

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Great guestions.

1. 2897 holds 1475 straight up. No funny cross-holdings.

2. I don't know if exclusivity is written in contracts but 2897 has 72% of 1475, if 2897 give away the distribution right is like shooting itself in the foot. Also the current chairman of 2897 is the son of Momofuku Ando. Chairmen of 2897 and 1475 are father and son. So I think the parent and sub relationship is tight.

3. Across the board. But Tingyi is stronger in all channels that include supermarkets, C-stores, magazine stalls, mom and pop shops...etc. Nissin is more in supermarkets and their presence is more in East and South China. Of course granular details you need reports from Euromonitor and the likes.

4. It is a hard question to answer. Private label never works for instant noodle. 220 322 Jinmailang 1475 all vertically integrated and it is probably difficult to find good contract manufacturers. It is true that shelve space is cut-throat but Cup Noodles and Demae Ramen are competitive too. 1475 runs massive marketing campaigns, holds taste testing, do crossovers with Japanese animation...etc to gain customer following.

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thanks for the writeup. v interesting. im just wondering if its all that mispriced though. stock since end 2017 (I guess that's when it listed) is up 44%. EPS has grown about 25% since then (unless i read your chart wrong) + dividend yield of around 2.5% average per year so 6 x 2.5 = 15%. so if you add general eps growth + dividend value you get to around 40% which matches how the stock has done. granted there is about a 20-25% derating in p/e (current vs average) but that's the Hong Kong discount from you. but i know 0 about this company besides what you wrote so im probably quite off somewhere.

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You have a valid point. Since 2017 Nissin Foods did pay dividends six years in a row and it is going to pay a dividend again this June. There was also a meaningul buyback in 2021. I think the market appreciates that and Nissin Foods' stock price moved during this six year timespan. If it is your typical deadbeat HK deep value I would not touch it with a 10-foot pole. Only recently it dropped to this level, I believe it is a good entry point as well as a great time to write about it.

I think it is safe to say it is cheap. Whether if regression to the mean could happen in Hong Kong is another question. I do not know the answer. So my move was to exit partly from another HK position then into this one. I think it is wise to limit HK exposure.

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