Asian Dividend Gems: Golden Throat Holdings

• Golden Throat Holdings is a gem. It has excellent fundamentals including an eye-catching dividend yield (17.9% in 2023) and a blistering DPS growth (10x from 2020 to 2023).

• It also benefits from a compelling long-term theme (relieving sore throats caused by worsening air quality/smog/fine dust problems along with recurrent regular cold/flu symptoms among millions of people in China).

• Golden Throat Holdings is one of the leading throat lozenges manufacturers in China. Its net margin averaged 24% from 2019 to 2023.

Conclusion First

Golden Throat Holdings has excellent fundamentals including an eye-catching dividend yield (17.9% in 2023), a blistering DPS growth (10x from 2020 to 2023), and a compelling long-term theme (relieving sore throats caused by worsening air quality/smog/fine dust problems along with recurrent regular cold/flu symptoms among millions of people in China).

One of my favorite movies when I was a kid was Raiders of the Lost Ark. The main character Indiana Jones (Harrison Ford) is a professor archeologist who is hired by government agents to locate the Ark of the Covenant. Although not as thrilling as the plot of the Raiders of the Lost Ark, searching for small cap dividend gems in Asia also involves a hunt for companies that could potentially provide outstanding investment returns. Golden Throat Holdings is certainly a gem.

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Golden Throat Holdings DPS, Dividend Yield, & Dividend Payout

Golden Throat Holdings' dividend yield averaged 12.5% from 2019 to 2023. Its annual dividend payout averaged 74.9% in the same period. The company's DPS ranged from HKD 0.06 in 2020 to 0.60 in 2023. In other words, its DPS jumped by 10x in this three year period. The company's dividend yield increased from 11.4% in 2021 to 18.9% in 2022 and 17.9% in 2023. Golden Throat Holdings has one of the best records of increasing its DPS among Asian companies in the past four years.

Golden Throat Holdings Earnings & Dividends (Source: Smartkarma)

How Did We Find Golden Throat Holdings?

We found Golden Throat Holdings (6896 HK) using Smartkarma's Smart Score Screener system. We used the following screening methodology:

• Market cap - More than $300 million

• Countries - Taiwan and Hong Kong only

• Sector - All sectors

• Dividends = Only 5

• Resilience, Value, Growth, and Momentum = 2 to 5

Using the criteria above resulted in a list of 164 stocks. Among these companies, we thought Golden Throat Holdings was the most interesting company to write about at this time.

Source: Smartkarma

Among the 23 stocks in the table above, we have written about four of the companies including Acter Co Ltd (5536 TT), Precision Tsugami China (1651 HK), Giordano International (709 HK), and Dream International (1126 HK) in the past six months. These four stocks are up on average 9.3% from the date of our insights to current (12 April 2024). The best performing stock has been Acter Co Ltd (5536 TT) which also happens to be the first stock to be ranked in the table above.

Golden Throat Holdings Company Background

Established in 1956, Golden Throat Holdings is the leading throat lozenges manufacturer in China. It is estimated that Golden Throat Holdings has about 15%+ of the market share in the throat lozenges in China. In addition to China, the company is trying to export its products to other countries/regions including the United States, Canada, Australia, and the Europe. Over the past two decades, Golden Throat Lozenges (OTC) has become a widely recognised brand and the leader in lozenge products in China.

Golden Throat Holdings Group Company Limited is a leading manufacturer of lozenges in China. The Company’s flagship product is Golden Throat Lozenges (OTC), which was launched in 1994. It is a type of lozenge mainly designed to relieve symptoms of sore and dry throat. Lozenges are designed to dissolve slowly in one's mouth, leading to higher saliva production which helps to lubricate a dry mouth or scratchy throat.

Increasing air pollution and concerns about cold/coughing/COVID have raised greater awareness to relieve coughing symptoms before they get worse. These trends have driven higher demand for lozenges in China, in particular the company's Golden Throat Lozenges.