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Market Opportunities

Hong Kong, China, Asia & Overseas

Ageing population, declining birth rate and shrinking working population are the challenges ahead for China. This poses a big challenge to the medium term growth prospects of China’s and therefore Hong Kong’s economies. There are also concerns on potential domestic debt worsening and technology decoupling on which we will keep an eye. 

Nevertheless, we see both risks and opportunities in China’s structural and socio-economic transformation. In the post-COVID era, China has been making continued effort to boost the productivity of various industries as well as their service or product quality.  She is also nudging state-owned enterprises (“SOEs”) to reform and enhance capital efficiency.  All of the above are expected to help release the hidden value of companies. Also, we see re-rating opportunities among many giant SOEs and red chips due to their solid businesses and clear outlook.  

The economies of China has slowed, however, Hong Kong, being one of the most important gateways connecting China with the rest of the world, remains well positioned to benefit from the persistent growth of Asia. 

While our retail fund has a focus on the Greater China market, our private fund and managed accounts are designed to cater for those who prefer more diversification.  The investment mandates of the latter allow us to diversify into overseas markets and in recent years, we see many overseas companies growing at relatively steady pace. For example, we have been actively investing in Japan since 2013. Currently we foresee more investment opportunities in Japan due to corporate restructuring and earnings recovery. Japan may be able to turn around from an economic contraction which has lasted for more than two decades. Also, the India market is expected to benefit from factors including the country's demographic trend, FDI inflow and booming of the manufacturing sector. In addition, Korea is a market full of deep value opportunities and we have been making investment in Korean stocks for years yielding decent investment returns.

Value Investment & Catalysts

A huge number of mid caps and small caps are not covered by brokers or institutional investors. Deep value is always hidden in under-researched businesses with solid balance sheets and management with long-term vision.

In addition, corporate activities have been vibrant in the region given Hong Kong’s ready access to capital. Mergers and acquisitions, restructuring of business, asset injection, privatizations and rationalization of capital all give rise to our “catalysts-driven” investment approach.