| Valuation method | Value, HK$ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 34.00 | 91 |
| Intrinsic value (DCF) | 3.66 | -79 |
| Graham-Dodd Method | 5.00 | -72 |
| Graham Formula | n/a |
Tanwan Inc (9890.HK) is a diversified Chinese technology company headquartered in Guangzhou, operating primarily as an online game publisher under its Tan Wan brand across Mainland China and Hong Kong. Founded in 2015 and listed on the Hong Kong Stock Exchange, the company has expanded beyond its gaming roots into multiple consumer sectors including real estate marketing services, fast-moving consumer goods under the Zha Zha Hui brand featuring rice noodle products, and pop toy merchandise through its Bro Kooli brand. Operating in the competitive Electronic Gaming & Multimedia industry within China's massive technology sector, Tanwan represents a unique hybrid business model blending digital entertainment with physical consumer products. The company's strategic positioning allows it to leverage its gaming audience for cross-selling opportunities while diversifying revenue streams across multiple consumer segments. This multi-pronged approach targets China's growing digital entertainment and consumer markets, though it faces significant competition in each business vertical from both specialized and diversified competitors.
Tanwan Inc presents a high-risk investment proposition characterized by significant operational challenges. Despite generating HKD 5.58 billion in revenue, the company reported a net loss of HKD 3.62 million and a deeply negative operating cash flow of nearly HKD 2 billion for the period. The company's diversified business model across gaming, consumer foods, and toys creates complexity without demonstrating clear synergies or profitability. With a market capitalization of HKD 8.16 billion and a beta of 0.50, the stock shows lower volatility than the broader market but faces substantial fundamental headwinds including negative earnings per share, high debt levels relative to cash reserves, and no dividend payments. The negative cash flow position raises concerns about liquidity and ongoing funding requirements, making this suitable only for speculative investors comfortable with significant operational turnaround risk.
Tanwan Inc operates across multiple competitive landscapes without establishing clear leadership in any single segment. In online gaming, the company faces intense competition from established Chinese gaming giants with superior resources, development capabilities, and existing popular IP portfolios. The gaming division's Tan Wan brand must compete for user attention and spending in a market dominated by comprehensive gaming ecosystems. The consumer foods business under Zha Zha Hui enters a highly fragmented and competitive market for rice noodle products where scale, distribution networks, and brand recognition determine success. The pop toy segment through Bro Kooli competes in the emerging but increasingly crowded collectibles market against both specialized toy companies and entertainment giants with stronger character IP. Tanwan's primary competitive challenge stems from its lack of focus—attempting to compete in three distinct markets without demonstrated excellence in any. The company's potential advantage lies in its ability to cross-promote between gaming and consumer products, but this remains unproven. Without clear market leadership, superior technology, or brand strength in any segment, Tanwan appears to be a generalist competing against specialists in each business line, resulting in sub-scale operations across multiple fronts.