I’m finally seeing some life in Chinese equities. Alibaba (BABA US - US$234 billion) rose +8% yesterday due to rumors that it was investing in generative AI platform Deepseek. And news came out that hedge fund manager David Tepper upped his positions in Chinese equities during the fourth quarter of 2024. He now counts Alibaba as his largest position and has also upped his stake in JD.com (JD US - US$58 billion).
Post of the week
On Sunday, I delved into the world of Asian Coca-Cola bottlers through a deep-dive on Thailand’s Haad Thip (HTC TB - US$194 million). Haad Thip has an exclusive contract to manufacture and distribute Coca-Cola products across Thailand’s 14 Southern provinces, which attract tourists from around the world. The company is run by second-generation entrepreneur Patchara Rattakul, who has done a great job at improving the company’s margins and returns on capital since he became COO in 2009 and CEO in 2019. The stock trades at 9x next-year P/E with a 8% forward dividend yield. You can find the full post here ($).
Tweet of the week
George Noble — who worked at Fidelity — shared a list that his former boss Peter Lynch had sent to his analysts back in 1983. The memo talks about ways that investment performance can be improved. Lynch makes a reference to an adjusted PEG multiple where he takes the growth rate adds the dividend yield and then divides by the P/E multiple. Lynch also pays attention to share buybacks and insider buying.
Podcast episode of the week
I enjoyed the latest episode on Chinese equities from Australia’s Intelligent Investor Podcast. They discuss why some foreign investors have stayed away from the market over the past few years, including a perceived move away from capitalism and a drop in entrepreneurship. At the same time, they recognize the value in some of China’s largest companies, including Alibaba at close to 10x P/E. And they recognize the innovation that’s taking place, including at TikTok-owner Bytedance, e-commerce platform Shein and electric vehicle maker BYD (1211 HK - US$128 billion).
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