Hong Kong Listed Companies

August started with a big bang for me.

I did something which I’ve never imagined myself doing… and it turned out okay! But it wasn’t just my own single efforts. While some of my friends know me as a confident person especially when it comes to investing, on the contrary, I have many doubts about myself. I put myself down and I told myself that I’m not good myself.

My paradigm shifted when so many friends believe in me and it caused me to start believing in myself as well. Many times where I felt like quitting, my mind constantly play out scenes of my friends encouraging me and I was not going to disappoint them at all. Glad that this shared dream of ours is starting to take shape!

From 7 – 9 August, I was in Hong Kong for a listed company’s Annual General Meeting. My group was the overwhelming majority, so I decided to spend more time interacting with the local investors. I chanced upon Manuel Schlabbers of Accudo Capital and Trevor of Income Partners. They were really friendly and we managed to exchange notes. I shared about 3 Hong Kong companies and it turned out that Manuel has them in his fund as well. What a coincidence! I also got to meet some guys from MSCI (NYSE:MSCI). They were motivated and very sharp people.

While enjoying the street food, I can’t help but notice so many beauty-related businesses in Hong Kong. More than I imagined! I also started to see Perfect Shape (HK.1830) advertising on MTR walkways alongside with Union Medical Healthcare (HK.2138). This blurs the line of differentiation in the marketplace and I am not sure about how a company could sustain a profit against many competitors.  In fact, it became apparent to me that in a business like that, the moat is almost non-existent. The celebrity endorsement is something more important than the products themselves. While I see Gigi Lai’s Mircor Enterprises (HK.8358) as a growth candidate, it does not have a deep moat. Besides, similar to SaSa International (HK.0178), there may be cyclical factors such as inbound tourism from China.

At Tsim Sha Tsui, I managed to visit a store of Eslite Spectrum (TW.2926). Its catalog is more bias towards cultural content. To defray its own rental, it leases spaces out for entrepreneurs to showcase their products. While it is differentiated from your typical Borders or MPH, a friend commented that most visitors are there to glance and spend idle time. The actual purchase of items off the shelves was actually very low. We spent a good 20 – 30 minutes and the sales counter didn’t look busy at all. We even questioned whether the store is breaking even on its rental costs.

I also kept my eyes wide and spotted lots of outdoor advertising billboards organised by Asiaray Media Group (HK.1993). Their closest competitor in Hong Kong is probably Cody. You can check out my article on Asiaray Media over here. Investors who are focusing on its earnings are missing the entire picture altogether.

On one of the nights, I visited Mandarin Oriental Grill (fine dining). It is under a listed company called Mandarin Oriental (SGX:M04). Fantastic meal and I was lost for words at the level of details and attention. It was a new experience for me!

Just by being on the streets of Hong Kong, we spotted so many other companies as well (Cafe de Coral, Fairwood, VitaSoy, others). In fact, I am going to analyse one of them very soon.

I am going to complete my basic horse riding course before heading back to Singapore for a very very good rest. I need it badly!

Signing off from Riders Lodge, Johor Bahru!