Another week of finding multiple solid single-digit P/E stocks in Asia. Global investors don’t seem to be excited about the region, but I’m finding more ideas than I have in several years. I have a pipeline of new deep-dives that will be published in the next few weeks across Thailand, Indonesia and Japan. Stay tuned.
Post of the week
Yesterday, I published an update on Japanese automaker Subaru (7270 JP — US$13 billion). Subaru is a special brand: its customers are among the most loyal of an auto company out there. And it’s currently ranked as the #1 in the latest American Customer Satisfaction Index. Subaru has a strong balance sheet with US$7 billion in net cash. That begs the question, why does the stock trade at 5.0x P/E? I try to answer that question here ($).
Tweet of the week
On Friday, I read through the earnings result of Singapore-based exhibition company Pico Far East (752 HK - US$330 million). It organizes conferences, exhibitions and brand activation events for third-party customers across Asia and beyond. The industry was more or less dead during COVID-19 but it’s recovered nicely. Pico’s full-year FY2024 revenues grew +19% year-on-year and pretax profit +51% year-on-year. If you exclude the HK$72 million one-off gain from the disposal of an associate, pretax profit rose +27% — still a respectable number. Adjusting for this one-off, the stock now trades at a trailing P/E multiple of 8.3x. And net cash represents more than half of the market cap. In FY2024, Pico paid out HK$17 cents per share in dividends, equivalent to an 8.2% dividend yield. In any case, you can find my tweet here.
Podcast episode of the week
In terms of podcasts, I greatly enjoyed Brown Advisory’s interview with Vineet Mitera at Ward Ferry Management. Vineet is originally Canadian but based in Hong Kong where he’s covered Asian equities for over 20 years. He mentioned Singapore-based e-commerce operator Sea Limited (SE US — US$68 billion), Chinese hospitality group H World (formerly “Huazhu”) (HTHT US — US$10 billion) and Japanese B2B industrial tool trading platform MonotaRO (3064 JP — US$8 billion). I was surprised to hear that Vineet was bullish on Max Healthcare (MAXHEALT IN — US$12 billion), which now trades at over 30x EV/EBITDA. Perhaps a reflection of how overvalued the Indian stock market has now become. You can find the full interview on YouTube here.
Asian Century Stocks
This was a teaser email from Asian Century Stocks. My name is Michael Fritzell, and I’m the author of this newsletter. I’ve been writing full-time for almost 4 years, delivering over 20 deep-dive reports yearly. It’s a niche product, but hopefully, I can offer a perspective you won’t get in mainstream media. I plan to raise the monthly price by another dollar to $39/month on 1 February 2025. If you want to lock in the current price, you can sign up through the below link and also get a free 30-day trial: