Imagine a supermarket chain that quietly yet powerfully transforms a nation’s grocery habits, one rural town at a time. Dino Polska, a fast-growing supermarket chain in Poland.
I've posted my concerns below on other Substack posts covering Dino Polska (I find the Portuguese chain (+Poland & Colombia ops) Jeronimo Martins SGPS SA (ELI: JMT / FRA: JEM / OTCMKTS: JRONY / JRONF) to be interesting):
1) The funds got into Dino Polska early and lately they have been profit taking...
2) Alot of podcasters and Substackers etc have been talking about the stock compared to other so-called EM stocks just as the "smart money" was getting out or taking profits...
3) Its not clear where future growth will come from. At some point, they will have Poland saturated - if not already as they already have one store for every so many Poles (sorry, can't remember the figures I have seen...). Expansion eastward to Russia and Belarus is probably out along with Ukraine given its a war zone rapidly loosing population.... Germany, Czech, Slovakia etc would be completely new markets with probably different retail laws even though they are EU...
4) At some point, the stores will need to be remodelled by somebody e.g. landlord, tenant or Dino if they are the owner... Same with any refrigeration etc equipment as it will need to be replaced - not sure the lifespan of such equipment - definitely longer than the junk sold to consumers...
With that said, they do have the right business model when it comes to format size. Here in Malaysia, Speedmart and K.K. no frills smaller format chain stores have saturated every neighbourhood and housing estate selling mostly the shelf stable basics (and it seems like at higher prices than supermarkets!) while Indomaret and Alphamart have done the same in Indonesia (albeit there is still room for growth there given Indonesia's size and they have multiple formats + the latter expanded into the Philippines)... And of course, the USA has its dollar store chains (that are now struggling as lower income people struggle + Temu etc competition)...
He. First of all, thanks for your comment. Let me give our (opposite) view.
1) It is normal for early investors to take profits at some point. This doesn't necessarily have to be a negative signal for the company's long-term prospects.
2) I'm not sure if we can comment on this with certainty. I've come across a few articles on Dino Polska, but no more than usual. There's also the risk of a social media funnel—once you engage with certain content, you'll be shown more of it.
3) While market saturation in Poland could pose a challenge, there are still opportunities:
- Further penetration in existing markets
- Potential expansion into neighboring countries like the Czech Republic or Slovakia
- Diversification of the product range or introduction of new store formats
4) Dino owns most, if not all, of its buildings, so it's responsible for those costs. I don’t see an issue here—this applies to all supermarkets. In fact, Dino's standardized layouts, self-built stores, and other operational efficiencies likely make their costs lower and processes more efficient compared to competitors.
Love the fact you made such a good comment. We like having opposite views. This keeps us sharp!
I've been linking to more than a few Dino articles - it seems to get the most coverage of any Polish stock (even more than the eCommerce one that's expanded to the UK etc)! 😀 Kaspi in Kazakhstan is another stock that I think gets outsized attention wheras Halyk Bank has a much better valuation but gets overlooked...
On another Substack that I linked to with yours, someone pointed out in a comment that Dino's owner owns a construction company that does the construction and fitout work for their stores (in Asia, that's usually part of the shell game to siphon $ from a listed company)... As long as that's properly disclosed, I can also make and see the case that's not necessarily a bad thing e.g. quality-cost control by keeping everything in the family and maybe there is alot of shoddy construction or corruption in the Polish construction industry...
I had linked your post in my links collection post last week: Emerging Market Links + The Week Ahead (September 3, 2024) https://emergingmarketskeptic.substack.com/p/emerging-markets-week-september-3-2024
I've posted my concerns below on other Substack posts covering Dino Polska (I find the Portuguese chain (+Poland & Colombia ops) Jeronimo Martins SGPS SA (ELI: JMT / FRA: JEM / OTCMKTS: JRONY / JRONF) to be interesting):
1) The funds got into Dino Polska early and lately they have been profit taking...
2) Alot of podcasters and Substackers etc have been talking about the stock compared to other so-called EM stocks just as the "smart money" was getting out or taking profits...
3) Its not clear where future growth will come from. At some point, they will have Poland saturated - if not already as they already have one store for every so many Poles (sorry, can't remember the figures I have seen...). Expansion eastward to Russia and Belarus is probably out along with Ukraine given its a war zone rapidly loosing population.... Germany, Czech, Slovakia etc would be completely new markets with probably different retail laws even though they are EU...
4) At some point, the stores will need to be remodelled by somebody e.g. landlord, tenant or Dino if they are the owner... Same with any refrigeration etc equipment as it will need to be replaced - not sure the lifespan of such equipment - definitely longer than the junk sold to consumers...
With that said, they do have the right business model when it comes to format size. Here in Malaysia, Speedmart and K.K. no frills smaller format chain stores have saturated every neighbourhood and housing estate selling mostly the shelf stable basics (and it seems like at higher prices than supermarkets!) while Indomaret and Alphamart have done the same in Indonesia (albeit there is still room for growth there given Indonesia's size and they have multiple formats + the latter expanded into the Philippines)... And of course, the USA has its dollar store chains (that are now struggling as lower income people struggle + Temu etc competition)...
He. First of all, thanks for your comment. Let me give our (opposite) view.
1) It is normal for early investors to take profits at some point. This doesn't necessarily have to be a negative signal for the company's long-term prospects.
2) I'm not sure if we can comment on this with certainty. I've come across a few articles on Dino Polska, but no more than usual. There's also the risk of a social media funnel—once you engage with certain content, you'll be shown more of it.
3) While market saturation in Poland could pose a challenge, there are still opportunities:
- Further penetration in existing markets
- Potential expansion into neighboring countries like the Czech Republic or Slovakia
- Diversification of the product range or introduction of new store formats
4) Dino owns most, if not all, of its buildings, so it's responsible for those costs. I don’t see an issue here—this applies to all supermarkets. In fact, Dino's standardized layouts, self-built stores, and other operational efficiencies likely make their costs lower and processes more efficient compared to competitors.
Love the fact you made such a good comment. We like having opposite views. This keeps us sharp!
TDI
I've been linking to more than a few Dino articles - it seems to get the most coverage of any Polish stock (even more than the eCommerce one that's expanded to the UK etc)! 😀 Kaspi in Kazakhstan is another stock that I think gets outsized attention wheras Halyk Bank has a much better valuation but gets overlooked...
On another Substack that I linked to with yours, someone pointed out in a comment that Dino's owner owns a construction company that does the construction and fitout work for their stores (in Asia, that's usually part of the shell game to siphon $ from a listed company)... As long as that's properly disclosed, I can also make and see the case that's not necessarily a bad thing e.g. quality-cost control by keeping everything in the family and maybe there is alot of shoddy construction or corruption in the Polish construction industry...
I shared the report, any idea how this will give me access to the premium TDI as mentioned in the article? Would like to read your deep dive on dino
We just sent you a DM! :)