4 Feb 2020 CMB International Securities | Equity Research JS Global Lifestyle (1691 HK) BUY (Initiation) Cross -selling with world-class tech and style Target Price HK$7.65 Up/Downside +48.0% Current Price HK$5.17 JS Global is the 3rd/ 2nd largest in China/ US with 8.8%/ 8.1% small appliance market share. JS global has three major brands (Joyoung, Shark and Ninja) which focus on cleaning, food preparation and cooking appliances, and generated a sales of USD 2.7bn and net profit of USD 112mn in FY18. China Home Appliance Sector Emphasis on R&D to solve consumers’ pain points. JS Global is dedicated on R&D and innovation as solving consumer pain point is a proven growth Walter Woo driver. In FY18, it spent ~USD 119mn on R&D, ~4.4% of sales (peers’ avg. is (852) 3761 8776 4.9%), and had a team of ~800, ~20% of total (peers’ avg. is 12%). We believe
[email protected] recent launches: revolutionary products - 1) Multifunctional steamer S5 (2019), 2) Ninja Foodi series (2018) and evolutionary products - 3) Premium soymilk Stock Data maker K-series, 4) High-performance multifunctional blender Y88 (2019), 5) Mkt Cap (HK$ mn) 17,615 Robot vacuum Shark ION (2017) can boost growth in FY18-21E. Avg 3 mths t/o (HK$ mn) 6.80 52w High/Low (HK$) 5.95/4.69 Cross-selling in product, region, price point. Acquisition of SharkNinja in Total Issued Shares (mn) 3,407.2 2017, in our view, can unlock huge potential by leveraging existing products Source: Bloomberg and sales network, like: 1) expanding Shark & Ninja into rest of the world (e.g.