A friend kindly sent me the latest Goldman’s Asian roundup of particular Asian focused stocks. A timely round picking out the unloved conglomerates. I’ve been mentioning Swire for the last couple of weeks as showing particular value. Goldman’s own analysis showing a 80% discount to net asset value. They don’t mention the stella earnings and extremely lwo debt ratio following the recent sale of Hutchinson Wharf. I see they have picked out various other conglomerates for us. Requires research before commenting. Swire is a ‘no brainer’ at these circa 100 HK$ levels. ( I say this accepting huge volatility is possible, of course). The HK$ peg is another issue that is left off the analysis. Singapore will force HKs hand in this respect i suggest.
Goldman-Sachs-Asia-Pacific-Conglomerates
As an aside, conglomerates have been an unloved asset class over the last few decades. The trend has been to break up such enterprises to realize their sum of parts valuation. I understand this but as we march in to difficult waters of government’s meddling in markets and uncertainty of where all the ‘new’ money will flow I specifically like/love conglomerates. Conglomerates are exactly the sort of place i want to store the bulk of my capital especially at 80% discounts to NAV, on pes of 4 and with 10% debt ratios. As always, in my opinion.
All the best Rich
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