Partner and Fund Manager, River Valley Asset Management

Jamshed Desai

Partner and Fund Manager

Singapore-based boutique asset management firm

River Valley Asset Management

River Valley Asset Management is a Singapore-based boutique asset management firm. Our team at RVAM strongly believes in being a trusted steward of our clients' wealth across generations.

Each of our fund managers has years of rich portfolio management experience over multiple market cycles at world-class investment houses. We bring our clients the combined strength of our investment team to manage their financial portfolios and to provide bespoke guidance on all aspects of their financial health.

We offer multi-asset class expert investment advice to accredited investors who are family offices, high net worth individuals and institutional investors to preserve and grow our clients' wealth.

The fund management team of the company includes Homiyar Vasania, Anand Ramachandran and Jamshed Desai.

Thematic (Sector/Industry)

The cement and building materials industry in Asia, more particularly in ASEAN, has seen dramatic additions in capacity over the last decade. Capacity additions have seldom been smooth or orderly in any country.  Overcapacity has led to weak prices across the region. The weakness in each country has been impacted by one or more factors germane to them. While demand growth has sustained in the mid to high single digits, the sheer growth in the number of new players in many markets has meant that pricing discipline has been sacrificed at the altar of volumes.As if the twin blows of overcapacity and weak demand were not enough, coal prices have been rallying hard for over a year now. While ASEAN has a quite a few listed cement companies, given the overcapacity situation prevailing currently, most investors are likely to be put off and adopt a wait-and-watch stance. When industry profitability is at rock-bottom levels, conventional valuation ratios such as P/E often do not help. Given that the industry is a long-cycle one, past experience shows that investors use different metrics at different stages of the cycle. As the industry profitability picks up, investors either move to EV/EBIDTA multiples to value stocks or combine it with P/E as growth becomes palpable, jettisoning EV/ton as a metric, which is perhaps of most use currently. Another strong indication of an industry in the throes of problems is significant consolidation and/or mergers and acquisition activity. There has been talk of some smaller players capitulating to the bigger ones, but we have not heard any concrete announcements yet.The pressure points for the cement stocks are well understood by investors today. A reversal in one or more of the three critical variables (price-volume-costs) will potentially nail a floor to their stock prices. This could happen in the short to medium term in some markets. The key then is to track these closely in what is now a much unloved sector, but where asset values are looking cheap selectively in absolute and relative terms for the first time in a more than a decade.

The cement and building materials industry in Asia, more particularly in ASEAN, has seen dramatic additions in capacity over the last decade. Capacity additions have seldom been smooth or orderly in any country.  Overcapacity has led to weak prices across the region. The weakness in each country has been impacted by one or more factors germane to them. While demand growth has sustained in the mid to high single digits, the sheer growth in the number of new players in many markets has meant that pricing discipline has been sacrificed at the altar of volumes.As if the twin blows of overcapacity and weak demand were not enough, coal prices have been rallying hard for over a year now. While ASEAN has a quite a few listed cement companies, given the overcapacity situation prevailing currently, most investors are likely to be put off and adopt a wait-and-watch stance. When industry profitability is at rock-bottom levels, conventional valuation ratios such as P/E often do not help. Given that the industry is a long-cycle one, past experience shows that investors use different metrics at different stages of the cycle. As the industry profitability picks up, investors either move to EV/EBIDTA multiples to value stocks or combine it with P/E as growth becomes palpable, jettisoning EV/ton as a metric, which is perhaps of most use currently. Another strong indication of an industry in the throes of problems is significant consolidation and/or mergers and acquisition activity. There has been talk of some smaller players capitulating to the bigger ones, but we have not heard any concrete announcements yet.The pressure points for the cement stocks are well understood by investors today. A reversal in one or more of the three critical variables (price-volume-costs) will potentially nail a floor to their stock prices. This could happen in the short to medium term in some markets. The key then is to track these closely in what is now a much unloved sector, but where asset values are looking cheap selectively in absolute and relative terms for the first time in a more than a decade.

ASEAN Cement's Cast of Woes Is Brimming Over…Yet Value Is Surfacing

Philippines

Holcim Philippines Incorporated manufactures and distributes portland cement and pozzolan cement.  The Company was incorporated in 1964.

Concrete Aggregates Corporation engages in quarrying, crushing, and selling basalt concrete aggregates in the Philippines. Its product portfolio includes G-1 concrete aggregates that are used for concrete pavements, massive foundations, granular beddings/fillers, and asphalt concrete mix with coarser design specifications; 3/4 inch concrete aggregates, which are the basic size for structural concrete mixes, pre-stress or pre-cast concrete products, and asphalt concrete mixes; and 3/8 inch concrete aggregates for concrete mixes used in densely reinforced structures, pre-stress/pre-cast products, and asphalt wearing and surface courses. The company also provides S-1 crushed sand, which is used as structural bedding, pavement seal coat, fairways sand cap, and an ingredient in concrete and asphalt mixes; and composite crushed aggregate materials for use in pavement base prior to concreting or asphalting. In addition, it offers banday banda, banlik/mineral filler, topsoil/backfill, weathered rock, blue sand vibro, and basalt powder. The company is based in Pasig, the Philippines. Concrete Aggregates Corporation is a subsidiary of Ortigas & Company, Limited Partnership.

Atlas Consolidated Mining & Development Corporation is a Philippine company engaged in metallic mineral mining and exploration. The Company currently produces copper concentrate (with gold and silver), magnetite iron ore concentrate and laterite nickel.

Atlas Consolidated Mining & Development (AT PM)

Philex Mining Corporation produces copper concentrates, containing copper, gold, and silver. The Company was incorporated in 1955.

Apex Mining Co., Inc. engages in the exploration, development, production, and sale of gold, silver, copper, lead, zinc brass, iron, steel, and other metals and minerals in the Philippines. It operates the Maco mines located in Maco, Compostela Valley. The company is also involved in the oil exploration and development activities. The company was founded in 1970 and is headquartered in Pasig City, the Philippines.

Atok-Big Wedge Co., Inc., through its subsidiaries, operates as a gas and oil exploration and production company with a portfolio of projects in the Philippines. The company has an interest in the Service Contract 72, an oil and gas project situated offshore West of Palawan Island. It also provides stock transfer agency services. The company was formerly known as Atok-Big Wedge Mining Co., Inc. and changed its name to Atok-Big Wedge Co., Inc. in 1996. Atok-Big Wedge Co., Inc. was incorporated in 1931 and is based in Makati, the Philippines. Atok-Big Wedge Co., Inc. is a subsidiary of Boerstar Corporation.

Lepanto Consolidated Mining Company engages in the exploration and mining of mineral properties primarily in the Philippines. The company operates through three segments: Mining Activities, Service, and Others. It explores for gold, silver, copper, lead, and zinc, as well as various kinds of ores, metals, minerals, oil, gas, coal, and related by-products. The company holds interests in the Victoria and Teresa gold projects, and the Enargite copper project located in Mankayan, Benguet. It is also involved in drilling, hauling, and sawmilling activities; apartments/guesthouses and warehouses leasing activities; and insurance and real estate brokerage businesses. In addition, the company offers diamond drilling services primarily to mining companies; and manufactures, distributes, and sells industrial diamond tools, including diamond core and non-core bits, reamer shells, casing bits, diamond circular segmental and diamond gang saws, and tubular and other products for mining exploration, marble cutting, and the construction industry. Lepanto Consolidated Mining Company was founded in 1936 and is based in Makati, the Philippines.

Phinma Corporation operates property and shelter, education, energy and financial services businesses.  The Company produces galvanized and painted steel coils and sheets; builds affordable housing; holds the Philippine master franchise for a motel company; operates universities; explores for oil; generates electricity; and offers securities brokerage and transfer services.

Mabuhay Vinyl Corporation manufactures and distributes basic and intermediate chemicals for various household and industrial applications in the Philippines. The company provides caustic soda, hydrochloric acid, liquid chlorine, and sodium hypochlorite. It is also involved in the trading of caustic soda pearls and Asahi valves. The company was formerly known as Mabuhay Rubber Corporation and changed its name to Mabuhay Vinyl Corporation in 1966. Mabuhay Vinyl Corporation was incorporated in 1934 and is based in Makati City, the Philippines. Mabuhay Vinyl Corporation is a subsidiary of Tosoh Corporation.

Marcventures Holdings, Inc., through its subsidiary, Marcventures Mining and Development Corporation, primarily explores for, develops, and mines nickel ores in the Philippines. It has a mineral production sharing agreement that covers an area of approximately 4,799 hectares located in Cantilan, Surigao Del Sur. The company was incorporated in 1957 and is based in Makati City, the Philippines. Marcventures Holdings, Inc. is a subsidiary of PCD Nominee Corporation.

Mangalam Cement Limited develops, manufactures and distributes portland cement and clinker.

China Shanshui Cement Group Ltd produces cement and clinker.  The Company also quarries limestone.

Hanil Holdings Co.,Ltd. manufactures cement products. The Company produces and sells cement, ready-mixed concrete, ready-mixed dry mortar, and other related products. Hanil Holdings also provides information technology services and construction services.

Asia Cement Co., Ltd. manufactures cement and aggregate products.  The Company produces and sells cement, ready-mix concrete, and dry mortar. Asia Cement offers its products to construction industry in Korea.

Beijing Taikong Panel Industry Corp was founded in 1999. The Company's line of business includes the manufacturing of concrete products from a combination of cement and aggregate.

Beijing Taikong Panel Industry (300344 CH)

Udaipur Cement Works Ltd. manufactures and sells cement and related products. The Company supplies cement and aggregates for use in construction and related industries.

Sanghi Industries Ltd. manufactures cement.

Zhejiang Kaier New Materials Company Limited develops, designs, promotes, manufactures and sells vitreous enamel cladding panels. The Company's main products are ceramic plates, the parts of ceramic heat transfer and enamel glaze.

Xiamen Academy of Building Research Group Co.,Ltd. provides construction and engineering consulting services, develops, manufactures and sells construction materials.  The Company's products include concrete, concrete water reducer, concrete strengthener, and other concrete admixtures.

Xiamen Acad Of Buil. Res. Gro. Co.,Ltd. (002398 CH)

Jiangsu Baoli International Investments Co., manufactures road asphalt products.  The Company also warehouses and distributes imported asphalt products.

Jiangsu Baoli Intl Investment (300135 CH)

Cemex Holdings Philippines, Inc. is a cement producer. The Company produces and markets cement and cement products, such as ready-mix concrete and clinker. Cemex Holdings Philippines sells its products throughout the Philippines.

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Cemex Holdings Philippines (CHP PM)

ASEAN Cement's Cast of Woes Is Brimming Over…Yet Value Is Surfacing

The cement and building materials industry in Asia, more particularly in ASEAN, has seen dramatic additions in capacity over the last decade....

River Valley Asset Management

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