Global Mobility/Transport, Equity Long-Short

Mohshin Aziz

Equity Bottom-Up

Li Auto Inc. manufactures automobiles. The Company designs, develops, and sells smart new energy electric sport utility vehicles. Li Auto conducts businesses in China.

<ul>
<li>Share price under pressure due to industry challenges and transition of new product line-ups.  </li>
<li>2024 is a blip, things will normalise 2025 and deliver strong topline and bottomline growth. </li>
<li>LiAuto is trading at bargain levels for a company delivering 3-year earnings CAGR of 38%, net cash balance sheet and churns high free cash flow. </li>
</ul>


Share price under pressure due to industry challenges and transition of new product line-ups.  
2024 is a blip, things will normalise 2025 and deliver strong topline and bottomline growth. 
LiAuto is trading at bargain levels for a company delivering 3-year earnings CAGR of 38%, net cash balance sheet and churns high free cash flow. 


LiAuto (LI US, BUY, TP:USD25.0): High Growth + Deep Value Stock

Brilliance China Automotive / Equity Bottom-Up

Brilliance China Automotive Holdings Limited, through its subsidiaries, manufactures and distributes minibuses and sedans in the People's Republic of China.  The Company also manufactures and trades automotive components.

<ul>
<li>Business is struggling due to legacy luxury brands such as BMW losing its positioning in China. Local brands are eating into market share fast. </li>
<li>Thankfully, the company is cash rich and its trading nature enables steady supply of dividends and have been known to pay special dividends.  </li>
<li>Share price has been under pressure, now trading at ~15% dividend yield based on 50% payout,  appealing to yield seekers. </li>
</ul>


Business is struggling due to legacy luxury brands such as BMW losing its positioning in China. Local brands are eating into market share fast. 
Thankfully, the company is cash rich and its trading nature enables steady supply of dividends and have been known to pay special dividends.  
Share price has been under pressure, now trading at ~15% dividend yield based on 50% payout,  appealing to yield seekers. 


Brilliance China Automotive (1114 HK, NEUTRAL, TP:HKD3.90): Go for the >15% Dividend Yields

Zhongsheng Group Holdings Ltd. retails automobiles.  The Company imports and retails primarily luxury and mid- to high-end automobile brands.

<ul>
<li>Most brands under control (Mercedes, Lexus, Toyota) are undergoing popularity downtrend by consumers in China.  </li>
<li>There will remain a loyal niche supporter base, every legacy auto does, but it also means Zhongsheng will be a smaller and niche distributor going forward. </li>
<li>Share price has plunged significantly YTD, trading at only ~5x, which we think is overdone. Yield hunters will like its ~8% DY. </li>
</ul>


Most brands under control (Mercedes, Lexus, Toyota) are undergoing popularity downtrend by consumers in China.  
There will remain a loyal niche supporter base, every legacy auto does, but it also means Zhongsheng will be a smaller and niche distributor going forward. 
Share price has plunged significantly YTD, trading at only ~5x, which we think is overdone. Yield hunters will like its ~8% DY. 


Zhongsheng Group Holdings (881 HK, BUY, TP:HKD15.0): Challenging Outlook and Reflected in Valuation

NIO Inc. manufactures and sells automobiles. The Company offers electric vehicles and parts, as well as provides battery charging services. NIO serves customers worldwide.

<ul>
<li>Chinese auto brands commands 61% market share in May 2024, up from 7% in 2021. Its premium car market share has also risen to 25% from nothing  </li>
<li>The transition towards EV, swift adoption of technology and sleek designs has made traditional car makers (including luxury marquees) look antiquated and out of fashion compared to the Chinese brands  </li>
<li>Premium Chinese automakers LiAuto and NIO will benefit over long-term, whilst the foreign dealers and local-foreign JV OEMs will suffer over the long term. </li>
</ul>


Chinese auto brands commands 61% market share in May 2024, up from 7% in 2021. Its premium car market share has also risen to 25% from nothing  
The transition towards EV, swift adoption of technology and sleek designs has made traditional car makers (including luxury marquees) look antiquated and out of fashion compared to the Chinese brands  
Premium Chinese automakers LiAuto and NIO will benefit over long-term, whilst the foreign dealers and local-foreign JV OEMs will suffer over the long term. 


China Autos Landscape Has Permanently Changed, Foreign Brands Have Lost Their Clout

Equity Capital Markets

Bank for Foreign Trade of Vietnam / Equity Capital Markets

Joint Stock Commercial Bank for Foreign Trade of Vietnam provides banking products and services for individuals, corporates, and financial institutions in Vietnam and internationally. The company accepts personal and savings accounts; and business accounts, such as current accounts, and time and special deposit products. Its loan products comprise personal loans; and short-term lending, working capital financing, project finance, and trade finance products. In addition, the company offers various cards; account services, including demand and term deposit accounts, fund management, and auto-investment services; and money transfer, bancassurance, payments and cash management, foreign exchange and treasury, international payments, guarantees, investment banking, asset management, correspondent banking, factoring, financial and office leasing, securities, and remittance services. Further, it provides electronic banking services, such as Internet, mobile, SMS, and phone banking services, as well as VCB-Money, VCB-eTour, and VCB-eTopup services. As of December 31, 2014, the company operated 89 branches, 351 transaction offices, and 1 representative office. Joint Stock Commercial Bank for Foreign Trade of Vietnam was founded in 1963 and is headquartered in Hanoi, Vietnam.

Bank for Foreign Trade of Vietnam (VCB VN)

<ul>
<li>Secondary placement taking place, ~29million share on offer via accelerated bookbuild, for total offer size of ~USD100 million </li>
<li>Discount of 0-2.4% relative to market close 9 July, discount depends on demand</li>
<li>Free float will increase by 0.5% to 8.4%, which is low but typical for Vietnamese government linked (GLC) stocks </li>
</ul>


Secondary placement taking place, ~29million share on offer via accelerated bookbuild, for total offer size of ~USD100 million 
Discount of 0-2.4% relative to market close 9 July, discount depends on demand
Free float will increase by 0.5% to 8.4%, which is low but typical for Vietnamese government linked (GLC) stocks 


Vietcombank (VCB VN Equity): Secondary Placement Offer, up to 2.4% Discount

Capital market veteran with 22 years experience with stints as an analyst (sell-side & buyside), investor relations and fund manager. 

My key expertise in the aviation sector. My definition of "aviation" includes airlines, travel tours, airports, airport retail & services, OEMs, online travel agents, aircraft lessors, air cargo/logistics, etc.   

I have an active watchlist consisting 190 companies across 41 countries. The aviation sector is highly cyclical and I am constantly evaluating signals to uncover attractive trade opportunities.