China
Tencent
Tencent is the largest social media network and online gaming company in China, with growing businesses in online advertising, cloud services and e-payments/e-commerce. As a team, we have owned shares in the company for more than 15 years. It has proven its ability to deliver growth despite the weak economy, and the management is confident that profitability will improve further as it continues to develop its high-margin businesses.
Prosus
Prosus is one of the largest technology investors in the world, with significant exposure to emerging markets. Its main asset value is derived from its stake in Tencent, but it has also built a solid portfolio in food delivery platforms, online classifieds and fintech businesses. Prosus’ businesses enjoy strong durable moats from network effects and, owing to the asset-light nature of the business model, tend to generate significant free cash flow.
Anta
Anta Sports is China’s top sportswear company, known for building multiple strong consumer brands in China. Recent growth has been driven by Anta’s relatively niche brands like Descente and Kolon Sport, which target high-end consumers engaging in fast-growing activities like camping and winter sports. Looking beyond China’s near-term weakness, we still believe that strong brands will outperform others as people choose to upgrade certain goods and services – albeit on a more selective basis than before.
Taiwan
TSMC
TSMC is the world’s largest semiconductor foundry (manufacturer). In recent years, TSMC has been a major beneficiary of AI advancements. We expect revenue and profits to continue to grow due to the “extremely robust” demand from AI, while sectors like robotics are expected to push semiconductor needs even higher. We believe it should continue to provide attractive compounding growth over the long run.
India
ICICI Lombard General Insurance
ICICI Lombard is India’s leading private general insurer. The management has operated with risk-awareness and agility, and has grown the business without excessive risks, in our view. General insurance penetration in India is among the lowest globally, which suggests that the industry has significant long-term growth potential. Additionally, private insurers like ICICI Lombard are gaining share from state-owned enterprises, due to years of underinvestment and mismanagement at the latter.
ICICI Bank
ICICI Bank, a leading Indian private bank, has transformed under CEO Sandeep Bakhshi, shifting from aggressive lending to a risk-focused, customer-centric model. This cultural overhaul has strengthened asset quality and boosted market share. With state-owned banks still dominating 60% of the market, ICICI Bank has significant growth potential while maintaining strong returns.
HDFC Bank
HDFC Bank is the largest private-sector bank in India, with over 10% market share in loans and deposits. The management has a long track record of managing risks prudently, while maintaining industry-leading return-on-assets (ROAs) across economic cycles and periods of disruption. We have owned the bank for many years and have long admired the management team, and the way it has pursued growth in a countercyclical and conservative manner.
Brazil
TOTVS
TOTVS is Brazil’s leading provider of enterprise resource planning (ERP) software. Its core product serves over 40,000 small-to-medium sized companies, which global software companies like SAP and Oracle often can’t and don’t serve well. As is true for our other portfolio holdings, we have met TOTVS many times over the years, and like the combination of family ownership and professional management.
MercadoLibre
MercadoLibre is Latin America’s leading e-commerce company and well placed to benefit from favourable structural trends such as the growing middle-class population in the region, the rising adoption of online shopping and greater levels of financialisation. Its track record of innovation and strong execution has led to consistent growth in sales, gross merchandise value and market share over the years and is backed by strong cash flow generation.
Argentina
MercadoLibre
MercadoLibre is Latin America’s leading e-commerce company and well placed to benefit from favourable structural trends such as the growing middle-class population in the region, the rising adoption of online shopping and greater levels of financialisation. Its track record of innovation and strong execution has led to consistent growth in sales, gross merchandise value and market share over the years and is backed by strong cash flow generation.
Peru
Credicorp
Credicorp is Peru’s leading financial group with 40% deposit share and a strong reputation under the Romero family. With its conservative culture, the bank has maintained a reasonable return on assets, even during several bouts of political and economic volatility. Meanwhile, the bank has led the way with its Yape payments app, achieving high brand awareness with now 15 million users (half the population). We believe low financial penetration in Peru should support Credicorp’s long-term growth.
Netherlands
Prosus
Prosus is one of the largest technology investors in the world, with significant exposure to emerging markets. Its main asset value is derived from its stake in Tencent, but it has also built a solid portfolio in food delivery platforms, online classifieds and fintech businesses. Prosus’ businesses enjoy strong durable moats from network effects and, owing to the asset-light nature of the business model, tend to generate significant free cash flow.
