Is Celsius (CELH) Ka-Shing In On Its Move Into China?

Exactly one year ago, Celcius (CELH) announced a $15 million investment from a group led by billionaire Li Ka-Shing. The importance of Ka-Shing’s investment may soon become evident, as CELH ramps its expansion into China.

CELH

You see, Ka-Shing is the “one of the richest and most influential tycoons in Asia”, according to Forbes. Among other things, he is the chairman of the board for CK Hutchison Holdings, the parent company of the A.S. Watson Group (ASW). Watson is a retail operator with over 12,000 stores. Per Bloomberg, 3,000 of these stores reside in “more than 430 cities in China, making it the largest player with almost 30 percent of the nation’s drugstore market”.

In other words, Ka-Shing can greatly aid his investment in CELH by simply putting Celsius into his stores.

This is no small issue. Anyone who has tracked Monster’s (MNST) progress in China knows that the road has been a rocky one. In China, Red Bull dominates so completely that the country doesn’t even recognize energy drinks as its own category.

Monster has been fighting to changes that mindset. This will ultimately provide a downstream benefit to CELH. However, having Ka-Shing behind them may prove far more beneficial.

See my last post on CELH for more info on this and the company’s valuation.

 

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Disclosures / Disclaimers: I am long CELH. However, this is not a solicitation to buy, sell, or otherwise transact the stock or its derivatives. Nor should it be construed as an endorsement of any particular investment or opinion of the stock’s current or future price. To be clear, I do not encourage or recommend for anyone to follow my lead on this or any other stocks, since I may enter, exit, or reverse a position at any time without notice, regardless of the facts or perceived implications of this article.

I am not a financial advisor. Nor am I providing any recommendations, price targets, or opinions about valuation regarding the companies discussed herein. Any disclosures regarding my holdings are true as of the time this article is written, but subject change without notice. I frequently trade my positions, often on an intraday basis. Thus, it is possible that I might be buying and/or selling the securities mentioned herein and/or its derivative at any time, regardless of (and possibly contrary to) the content of this article.

I undertake no responsibility to update my disclosures and they may therefore be inaccurate thereafter.  Likewise, any opinions are as of the date of publication, and are subject to change without notice and may not be updated. I believe that the sources of information I use are accurate but there can be no assurance that they are. All investments carry the risk of loss and the securities mentioned herein may entail a high level of risk. Investors considering an investment should perform their own research and consult with a qualified investment professional.

I wrote this article myself, and it expresses my own opinions. I am receiving no compensation for it, nor do I have a business relationship with any company whose stock is mentioned in this article. The information in this article is for informational purposes only and should not be regarded as investment advice or as a recommendation regarding any particular security or course of action.

The sole purpose of this blog/forum is to attract new contacts with professional industry expertise to share research and receive feedback (confirmation / refutation) regarding my investment theses.

7 thoughts on “Is Celsius (CELH) Ka-Shing In On Its Move Into China?

  1. Glad you are involved here – they have been a great client of ours for two plus years.

    I positioned SMSI as I think the pullback is over done.

    Brett

    Sent from my iPhone

    >

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  2. A little off topic, but in the beverage industry, I have been following another emerging beverage player you had been been in and out of last year NBEV. They are expecting $66 million in ’17 and projected $100 million+ in ’18. Nothing but great new distribution announcements the last several months. They have no debt and no warrants and just announced a new credit line from PNC. Roth presentation earlier this week. They are rebuilding the acquired brands and have doubled distribution, CEO is a maverick! It is much lower than when you sold, but the story and execution appears significantly better now. Do you follow any of the past interested stocks?

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    1. Good update on them. What turned me off about them was a high degree of promotionalism relative to execution (a common trait in failed investments I’ve dealt with in the past — MATR; HMNY).

      If they start talking less and hitting numbers more, I might give them another look. Thanks!

      Like

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