For the financial year ended 30th June 2014, the DCG Asia Value Fund’s Net Asset Value registered a gain of 9.8% with the NAV at S$165.86 per share. In comparison, the benchmark MSCI Asia ex Japan Index rose 14.4% over the same period.
In the last 12 months these are the stocks that have contributed most to the portfolio’s performance.
Pax Global (“Pax”) is one of the world’s largest developer and seller of electronic fund transfer point-of-sales terminals and related services, with a leading market share in China. Pax’s stock price had a strong showing in the year, rising from about HK$1.7 per share in July 2013 to an all-time high of HK$5.15 in early June 2014.
The company continues to generate good revenue and earnings growth both in China and abroad, backed by solid cashflows and no debt. In June 14, the company announced that it had passed the verification process to be recognized as one of Shenzhen’s Key Software Enterprises. After the strong run-up, we sold our holdings in Pax as it had come close to our estimate of its intrinsic value.
Tiga Pilar is also looking at spinning off its plantation business, Bumiraya Investindo (“BRI”), via an IPO in the second half of 2014. BRI, which is 35% owned by Bungee, a leading US agriculture and food company, owns seven palm oil plantations with a total concession area of 93,000 hectares, of which only 16,740 hectares are planted.
Net sales grew 34% y-o-y to Rp1,153 billion while net profit attributable to shareholders jumped 49% y-o-y to Rp98 billion. Its food manufacturing business posted an impressive 58% y-o-y growth, driven primarily by dried noodle and vermicelli sales (up 92% y-o-y), and stronger sales of its Growie wafers and Taro extruded snacks (up 71% y-o-y). Tiga Pilar’s rice business, one of the key growth drivers for the group in the next three to five years, grew 21% y-o-y in sales to IDR654 billion, contributing over 56% of group revenue. In April 2014, the company commissioned its second rice milling facility, doubling its capacity to 480,000 tons per annum.
Bonia, a seller of ladies handbags and other leather goods, has a network of over 700 sales outlets and 70 boutiques in Singapore, Malaysia, Vietnam and Phillippines. Its portfolio of brands include Bonia, Braun Buffel, Sembonia, Carlo Rino, Rudy Valentino, and Bruno Magli.
Management has been buying back shares at below MYR2, and have attempted to privatize the company at MYR2.04 a share when the family’s stake crossed 50% in October 2012. Bonia is considered a mid-tier brand in Southeast Asia, where its growth has largely been driven by its operations in Vietnam and Indonesia.
We started acquiring the company’s shares at about MYR1.80 a share in May 2013, which was lower than the attempted privatization offer price. As at end June 2014, the stock price has risen to MYR5.44, trading at a PE ratio of 19.5x, with a net cash balance of MYR21 million on its balance sheet. We have top sliced our positions due to the reduced margin of safety at these elevated prices.
Sarine recently launched two new imaging systems to target the polished diamond online and retail trade. The Sarine Light system provides an objective measure of a polished diamond’s appearance through its light performance. The Sarine Loupe system creates a high-quality, significantly enlarged multi-angle image of a polished diamond so that the viewer or potential buyer can inspect it through a conventional loupe without the diamond physically present. The successful launch of these two systems over the next three to five years could boost Sarine’s sales and earnings significantly. Other significant recent updates include the November announcement of a five-year collaboration with New York Diamond Dealers’ Club (“NYDDC”), the largest diamond trade organization in the United States (the world’s largest market for diamond jewellery sales) and one of the leading diamond exchanges in the world. In the strategic agreement, NYDDC will exclusively promote and market Sarine’s products to the US diamond industry in return for Sarine providing the latest technology for the use of NYDDC’s members. Sarine also announced a tie-up with the Rapaport Group’s RapNet, a web-based diamond trading network, to enhance online trade by providing diamond imagery produced by Sarine Loupe (on a pay-per-stone basis) alongside data on the diamond from the Gemological Institute of America.
MES entails all activities of the entire value chain of a product from sourcing, research and analysis, marketing, sales, distribution and logistics to after sales services. DKSH offers one-stop-shop solutions to clients who are looking for quick market access, local knowledge and a trustworthy business partner in the emerging Asia markets.
With more than 90 years in the Malaysia market, DKSH (M) has established strong relationships with over 130 main clients, including the MNCs and local companies like Old Town, Vico, Maxis, supplying consumer products to over 25,000 retail outlets in Malaysia. In the healthcare logistics business, DKSH (M) distributes products for more than 69 international and local healthcare companies, reaching over 10,000 customers across various doctors’ clinics, retail pharmacies, private hospitals, government hospitals and institutions, and selected wholesalers.
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