Quality-first, Business-perspective Strategy, Urbem (HK) Limited

Steven Chen

Quality-first, Business-perspective Strategy

Equity Bottom-Up

Integrated Diagnostics Holdings / Equity Bottom-Up

<ul>
<li>One of the most effective alpha-generating approaches is to look at places that very few of the others are looking at;</li>
<li>In this episode, let's take a glance at a rapidly-developing and investable story from MENA;</li>
<li>The business generates high returns on capital with a massive growth runway, has a founder-led management team, and is reasonably priced, in my view.</li>
</ul>


One of the most effective alpha-generating approaches is to look at places that very few of the others are looking at;
In this episode, let's take a glance at a rapidly-developing and investable story from MENA;
The business generates high returns on capital with a massive growth runway, has a founder-led management team, and is reasonably priced, in my view.


Integrated Diagnostics: Another Under-The-Radar Story

<ul>
<li>My long-time audience may have learned my lack of interest in the internet sector when it comes to equity investing;</li>
<li>But <a href="https://www.smartkarma.com/entities/kaspi-kz-jsc" target="_blank" data-smartkarma-citation="entities:33382:1" rel="noopener">Kaspi.KZ JSC (KSPI LI)</a> can be an exception thanks to its superior quality;</li>
<li>The valuation of the share does not seem cheap but is by no means unfair given the rapidly-developing addressable market, multi-cylinder growth engine, sustainable competitive advantage, and owner-leadership.</li>
</ul>


My long-time audience may have learned my lack of interest in the internet sector when it comes to equity investing;
But Kaspi.KZ JSC (KSPI LI) can be an exception thanks to its superior quality;
The valuation of the share does not seem cheap but is by no means unfair given the rapidly-developing addressable market, multi-cylinder growth engine, sustainable competitive advantage, and owner-leadership.


Asset Allocation & Fund Positioning, Copley Fund Research

Steven Holden

Asset Allocation & Fund Positioning

Copley Fund Research

Copley Fund Research provide research and data on asset allocation among Global and Emerging Market equity funds.  The analysis details absolute and relative positioning across countries, sectors and industries together with highly granular data on single stock and single fund allocations.  The data is updated monthly with time series going back to January 2011.

Global Research - Analysis of 165 prominent Global equity funds, combined AUM $335bn
GEM Research - Analysis of 127 prominent global EM equity funds, combined AUM $250bn

Asset Allocation - Global and GEM Equity

Cross Asset Strategy

Average weights among Frontier market countries stand at a combined 0.86%, with 42.5% of the EM funds in our analysis having some exposure to Frontier.  On a country level, Vietnam dominates, held by 19.6% of funds, followed by Kazakhstan and Panama.The most widely held stocks are <a href="https://www.smartkarma.com/entities/copa-holdings-sa-class-a" target="_blank" data-smartkarma-citation="entities:6110:1" rel="noopener">Copa Holdings Sa Class A (CPA US)</a> and <a href="https://www.smartkarma.com/entities/kaspi-kz-jsc" target="_blank" data-smartkarma-citation="entities:33382:1" rel="noopener">Kaspi.KZ JSC (KSPI LI)</a> , with 10.4% and 10% of funds invested respectively.On a fund level, openings in <a href="https://www.smartkarma.com/entities/kaspi-kz-jsc" target="_blank" data-smartkarma-citation="entities:33382:1" rel="noopener">Kaspi.KZ JSC (KSPI LI)</a> dominate the picture, with Carmignac Emerging Discovery, Fidelity and BlackRock opening positions, among others.  Closures in Nova Ljubljanska Banka from TT International, Goldman Sachs and Polar Capital are the stand outs.  Analysis taken from our Emerging Markets Research, covering 242 active GEM funds with combined AUM of $500bn

Average weights among Frontier market countries stand at a combined 0.86%, with 42.5% of the EM funds in our analysis having some exposure to Frontier.  On a country level, Vietnam dominates, held by 19.6% of funds, followed by Kazakhstan and Panama.The most widely held stocks are Copa Holdings Sa Class A (CPA US) and Kaspi.KZ JSC (KSPI LI) , with 10.4% and 10% of funds invested respectively.On a fund level, openings in Kaspi.KZ JSC (KSPI LI) dominate the picture, with Carmignac Emerging Discovery, Fidelity and BlackRock opening positions, among others.  Closures in Nova Ljubljanska Banka from TT International, Goldman Sachs and Polar Capital are the stand outs.  Analysis taken from our Emerging Markets Research, covering 242 active GEM funds with combined AUM of $500bn

Thematic (Sector/Industry)

<ul>
<li>Businesses pursue various routes to grow their earnings power and shareholder value;</li>
<li>As equity investors, we prefer to invest in growth stories built upon absolute market leadership and ample room for market penetration;</li>
<li>To demonstrate, we present three examples from our portfolio here.</li>
</ul>


Businesses pursue various routes to grow their earnings power and shareholder value;
As equity investors, we prefer to invest in growth stories built upon absolute market leadership and ample room for market penetration;
To demonstrate, we present three examples from our portfolio here.


Market Domination + Under-Penetration = Our Favorite Growth Scenario

United Kingdom

Kaspi.kz's ecosystem connects consumers and merchants, enabling digital payments, e-commerce, and financial services. The Company gateway to its ecosystem is with the mobile app, which is powered by the company's proprietary technology and enables users to seamlessly navigate between interconnected products and services. Kaspi.kz serves customers in Kazakhstan and Azerbaijan.

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Kaspi.KZ (KSPI LI)

Integrated Diagnostics: Another Under-The-Radar Story

This company generates high returns on capital with a massive growth runway, has a founder-led management team, and is reasonably priced.

Steven Chen

Kaspi.kz - A Superior-Quality Trio

Kaspi.kz is an exceptional "Super App" business winning sustainably in all three verticals where it operates in a rapidly-developing but often...

Steven Chen

Frontier Markets Exposure in EM Funds

With Argentina and Kuwait moving up to Emerging status, how are active EM investors positioned in the current crop of Frontier Markets?

Steven Holden

Market Domination + Under-Penetration = Our Favorite Growth Scenario

We present three examples from our portfolio here to demonstrate our preference to invest in growth stories built upon absolute market leadership...

Steven Chen

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