Our value oriented investment philosophy, rigorous fundamental due diligence and disciplined risk management along with our unmatched China advantages make our business long-term competitive.
Investment Philosophy
Value approach
Although prices are always driven by liquidities, the Manager believes stocks have inherent fair-values and healthy organic growth also increase shareholder value in the long term.
Investment Universe
The companies which derive majority of earnings from Mainland China including H-shares, A-shares, B-shares and stocks listed in other international markets.
Long the winners who have international comparative advantages in the trend of globalization with high entrant barriers, good management teams, strong growth and cheap valuation etc.
Short the losers who have low entrant barriers, distracted management team, unfavorable industry dynamic shift and hyped valuation etc.
Investment Process
We adopt a combination of top-down & bottom up approach. Our approach requires an understanding of the industry/ sector dynamics, the company's competitive position within their industry and how this is evolving, and also the strength of management. Investment ideas are generated from investment team. The origin of the investment decision may be from a company visit, news flow, broker analysis or other related sources. The premise of the investment case is then discussed in detail with the portfolio manager and the rest of the investment team. On-site company visit and side channel checks are two important steps in our rigorous due diligence process.
Following the review process, the investment decision will be made solely by the portfolio manager. Position size is evaluated having regard to the liquidity of the investment and also to its impact on the overall portfolio.
The number of stocks represented in the portfolios is limited to a number that can maximize performance and minimize risk. The team needs to understand and closely monitor changes both to the companies' business and to the share price. |