Asian Dividend Gems: Cheerwin

• Cheerwin is a strong turnaround story with significant earnings growth in 2023 with solid dividend yield. It is the number one player in the inspect repellent sector in China.

• Cheerwin's current price is 79% lower than the IPO price. However, Cheerwin's shares are up 35% YTD, sharply outperforming Hang Seng index which is up 13.6% YTD.

• We found Cheerwin (6601 HK) using Smartkarma's Smart Score Screener system. We used the following screening methodology: Market cap - More than $300 million Dividends = 5 only.

Conclusion First

Cheerwin is a strong turnaround story with significant earnings growth in 2023 with solid dividend yield. Cheerwin's current price is 79% lower than the IPO price.However, Cheerwin's shares are up 35% YTD, sharply outperforming Hang Seng index which is up 13.6% YTD. Valuations are much more attractive now as compared to in 2021 when the company completed its IPO.

It has a leading market share in the inspect repellent sector in China. The company's business deteriorated in 2021 and 2022 as the Chinese consumers spent less on the company's core products such as the insect repellents. As millions of people in China spent more time indoors, there was a reduced need for inspect repellents which are sometimes used to avoid getting mosquito and other bug bites.

As millions of people in China try to go back to their normal daily lives, this also means spending more time outdoors which should help the company's core insect repellent product sales. Cheerwin is one of the top five players in China's household care industry.

Cheerwin DPS, Dividend Yield, & Dividend Payout

Cheerwin's dividend yield averaged 4.1% from 2021 to 2023. Its annual dividend payout averaged 77% in the same period. The company's DPS ranged from HKD 0.04 to HKD 0.12 from 2021 to 2023. The company's dividend yield increased from 2.2% in 2021 to 2.4% in 2022 and 7.8% in 2023.