Asian Hedge Fund Manager, Long Short Equity, Macro

David Mudd

Equity Bottom-Up

<ul>
<li>Hong Kong is again trading well below its historical multiple valuation levels after the October/November correction.  Mainland investors bought a record amount the day after Trump's win.</li>
<li>
<a href="https://www.smartkarma.com/entities/kingsoft-corp-ltd" target="_blank" data-smartkarma-citation="entities:492:1" rel="noopener">Kingsoft Corp (3888 HK)</a> reported consensus beating results with its online game segment surging.  The company is benefiting from AI upgrades in its office SAAS business.
</li>
<li>
<a href="https://www.smartkarma.com/entities/precision-tsugami-china-corp" target="_blank" data-smartkarma-citation="entities:26199:1" rel="noopener">Precision Tsugami China (1651 HK)</a> posted blockbuster earnings for its 1H25 as the machine tool sector rebounds on the back of factories upgrading to intelligent manufacturing.</li>
</ul>


Hong Kong is again trading well below its historical multiple valuation levels after the October/November correction.  Mainland investors bought a record amount the day after Trump's win.

Kingsoft Corp (3888 HK) reported consensus beating results with its online game segment surging.  The company is benefiting from AI upgrades in its office SAAS business.


Precision Tsugami China (1651 HK) posted blockbuster earnings for its 1H25 as the machine tool sector rebounds on the back of factories upgrading to intelligent manufacturing.


The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (November 21)

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>Automation systems play <a href="https://www.smartkarma.com/entities/pentamaster-corp-bhd" target="_blank" data-smartkarma-citation="entities:15302:1" rel="noopener">Pentamaster Corp (PENT MK)</a> expects the supply of semiconductors testers to the electric vehicle business will be key growth driver in 2023.</li>
<li>PENT estimates half of the orders for its semiconductor testers will be sourced from the EV segment, generating ~40% of the group’s revenue.</li>
<li>PENT is a curious stock in which its pseudo dual-listed twin trades under <a href="https://www.smartkarma.com/entities/pentamaster-international-ltd" target="_blank" data-smartkarma-citation="entities:31099:1" rel="noopener">Pentamaster International (1665 HK)</a>, but at a significant discount. </li>
</ul>


Automation systems play Pentamaster Corp (PENT MK) expects the supply of semiconductors testers to the electric vehicle business will be key growth driver in 2023.
PENT estimates half of the orders for its semiconductor testers will be sourced from the EV segment, generating ~40% of the group’s revenue.
PENT is a curious stock in which its pseudo dual-listed twin trades under Pentamaster International (1665 HK), but at a significant discount. 


Pentamaster Corp: In The (EV) Driver's Seat

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

<ul>
<li>
<a href="https://www.smartkarma.com/entities/pentamaster-corp-bhd" target="_blank" data-smartkarma-citation="entities:15302:1" rel="noopener">Pentamaster Corp (PENT MK)</a> specialises in the manufacturing of automated testing equipment (ATE segment) and the provision of factory automated solutions (FAS segment). </li>
<li>Pentamaster's solid track record, exposure to structural trends (electric vehicles), profitability, cash generation and healthy balance sheet are attractive. The shares are up 12.9% YTD.</li>
<li>However, the shares reflect this story and the valuation looks full compared to peers and historical multiples. We like the fundamentals and would be buyers of any prolonged weakness.</li>
</ul>



Pentamaster Corp (PENT MK) specialises in the manufacturing of automated testing equipment (ATE segment) and the provision of factory automated solutions (FAS segment). 
Pentamaster's solid track record, exposure to structural trends (electric vehicles), profitability, cash generation and healthy balance sheet are attractive. The shares are up 12.9% YTD.
However, the shares reflect this story and the valuation looks full compared to peers and historical multiples. We like the fundamentals and would be buyers of any prolonged weakness.


Pentamaster Corp (PENT MK): Good Story, at What Price?

Quality-Value Investing

Marc Melendez, CFA

Emerging Market Small and Mid Cap Equities

Reperio Capital

Reperio Capital Research was founded in 2013 with the goal of better serving the investment community with in-depth, high quality, value oriented research.

Reperio means to discover in latin. Using value investing principles, we aim to discover a minimum of 12 investment opportunities per year within the Emerging Markets Small and Mid Cap universe.

We take a business owners perspective with a long term investment horizon. We conduct bottom up, fundamental research. We focus on downside risks and require a significant margin of safety in any investment to prevent the permanent loss of capital. All factors differentiating our research from the short term, trading focus of traditional research providers.

Pentamaster International / Equity Bottom-Up

<a href="https://www.smartkarma.com/entities/pentamaster-international-ltd" target="_blank" data-smartkarma-citation="entities:31099:1" rel="noopener">Pentamaster International (1665 HK)</a> is a Malaysian company spun-out of Pentamaster Corporation and listed in Hong Kong in January 2018. It sells automated test equipment and factory automation solutions.Due to the adoption of 3D sensors within smartphones, it is seeing a strong increase in sales with its revenue growing by 45% per annum from 2014 to 2019. 3D sensing is at the early adoption stage and should grow rapidly over the next five years. Pentamaster has a strong relationship with its customers, creating customized products with customers often more than one year ahead of the final sale. The company continues to expand its product offering to diversify across sectors and throughout the value chain.Pentamaster has a healthy financial position with net cash equal position. It is also very profitable with a five-year average return on invested capital of 65.7%. Due to minimal investment requirements, ROIC increased from 16% in 2015 to 132% in 2019. There are no corporate governance concerns.Despite Pentamaster’s quality and growth, there is 98% upside to base-case 2025 fair value per share of HKD3.33. The pandemic has caused production and installation delays causing the sales in the first nine months to fall by 15%. The company believes its long-term growth outlook is only temporarily impacted by the pandemic.The combination of growth and valuation makes Pentamaster International an attractive investment opportunity. Pentamaster International is preferred over <a href="https://www.smartkarma.com/entities/pentamaster-corp-bhd" target="_blank" data-smartkarma-citation="entities:15302:1" rel="noopener">Pentamaster Corp (PENT MK)</a> due to its valuation. Pentamaster International trades at 13 times 2019 earnings, while Pentamaster Corporation trades at 42 times 2019 earnings. Because of its recent listing, Pentamaster International is not as well known by investors in Hong Kong. There is also the cross-border listing, which typically leads to a discount.

Pentamaster International (1665 HK) is a Malaysian company spun-out of Pentamaster Corporation and listed in Hong Kong in January 2018. It sells automated test equipment and factory automation solutions.Due to the adoption of 3D sensors within smartphones, it is seeing a strong increase in sales with its revenue growing by 45% per annum from 2014 to 2019. 3D sensing is at the early adoption stage and should grow rapidly over the next five years. Pentamaster has a strong relationship with its customers, creating customized products with customers often more than one year ahead of the final sale. The company continues to expand its product offering to diversify across sectors and throughout the value chain.Pentamaster has a healthy financial position with net cash equal position. It is also very profitable with a five-year average return on invested capital of 65.7%. Due to minimal investment requirements, ROIC increased from 16% in 2015 to 132% in 2019. There are no corporate governance concerns.Despite Pentamaster’s quality and growth, there is 98% upside to base-case 2025 fair value per share of HKD3.33. The pandemic has caused production and installation delays causing the sales in the first nine months to fall by 15%. The company believes its long-term growth outlook is only temporarily impacted by the pandemic.The combination of growth and valuation makes Pentamaster International an attractive investment opportunity. Pentamaster International is preferred over Pentamaster Corp (PENT MK) due to its valuation. Pentamaster International trades at 13 times 2019 earnings, while Pentamaster Corporation trades at 42 times 2019 earnings. Because of its recent listing, Pentamaster International is not as well known by investors in Hong Kong. There is also the cross-border listing, which typically leads to a discount.

Pentamaster International (1665:HK): An Undervalued Beneficiary of Long Term Growth Trends

Malaysia

Pentamaster International Limited designs, manufactures, and installs automated equipment. The Company serves semiconductor, pharmaceutical, medical devices, automotive, food and beverages, and consumer goods industries. Pentamaster International serves customers worldwide.

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Pentamaster International (1665 HK)

The Heat Is On: News Flow and Sentiment in CHINA / HONG KONG (November 21)

Mainland investors buying in Hong Kong peaked after Trump won the election. Kingsoft beat consensus estimates for revenue and earnings. Precision...

David Mudd

Pentamaster Corp: In The (EV) Driver's Seat

PENT should trend higher as it rides on the coattails of the automotive electrification trend. Yet at 33x FY23E EV/EBITDA, it is not inexpensive....

David Blennerhassett

Pentamaster Corp (PENT MK): Good Story, at What Price?

The shares have had a strong run and the valuation looks full compared to peers and historical multiples. We like the fundamentals and would be...

Arun George

Pentamaster International (1665:HK): An Undervalued Beneficiary of Long Term Growth Trends

Despite trading at a PE of 13, Pentamaster International is a beneficiary of the 3D sensor market. It parent and near-identical asset, Pentamaster...

Reperio Capital

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