Issues at Greatview Aseptic (468 HK)

They used to generate ROEs in the 15% range, but that came down recently. So did the share price …

This is not investment advice. Please read the disclaimer. I might own discussed stock(s) currently or at a later time. I might transact in any securities at any time.

The share price looks enticing, but gross margins are problematic as are average price per unit sold. Profitability is currently pressured due to high shipping costs and raw materials. Greatview’s margins never got pressured like this. If profitability recovers this might be interesting …  

  • Capex/depreciation ratio is <1 since 2018, and is <.7 for 2020 and 2021.  
  • Unit prices are falling since 2016, and as a result gross profit per pack is shrinking and fell off a cliff in 2021 without recovering in H1’22.  
  • Reports include a bunch of buzzwords. It did not help profitability.  
  • Look for increases in price/unit and GM recovery 

Some sizeable insider buys since mid 2021.

Further reads

  • I think i first stumbled over Greatview at the great globalstockpicking blog. There you can read much more.
    Just by chance, his blog also features a picture of the greatest skyline there is … sweet memories 🙂

2 thoughts on “Issues at Greatview Aseptic (468 HK)

  1. This is one of my holds. Great alternative to TetraPak and more options in longlife packaging. As costs increase companies might look for alternatives to TetraPak. Bit of a mini-moat as not as easy to produce as serious printing equipment is needed also. Too low ROIC for me now days 🙂 I’d be interested to know in your supermarket how many brands use Greatview?

    Like

  2. Indeed a bet on a reversal of unit prices (also one of my holdings). Greatview seems to be the one best suited to take on pain through this cycle, as opposed to SIG and Elo, as well as smaller local players lacking scale. Also, Western countries haven’t yet really accepted to use a Chinese packaging manufacturer for such a disease-prone support, but Greatview’s image is changing steadily, with a factory in Germany and now in Italy as well.
    But will probably take some time to rationalize…

    Liked by 1 person

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