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HONG KONG (Reuters) - Revolutionary funds reveal their highest investment ideas from Indian drug retailer China’s self-driving taxis to South Korea’s nuclear power plant builders at the annual SOHH Investment Conference in Hong Kong.
This year’s draft picks are more geographically diverse than last year, suggesting investors are actively seeking to spread their exposure to counter-fee uncertainty and market volatility.
San Francisco-based Flight Deck Capital sees the upward potential of Chinese search engine giant Baidu, betting on its fast-growing autonomous driving business.
Similar to Google's self-driving unit Waymo, Baidu's Apollo Go "is the only robot Taksey player in China that does not rely on the capital market to expand," Jay Kahn, founder and managing partner of Flight Deck, said at a Friday meeting.
He expects China's taxi and ride industry to grow to $237 billion by 2034, while Apollo gains 15% market share. But the segment, together with Baidu's cloud business, is currently granted zero valuation by the market, he said.
It is worth noting that the escalation of the trade war against China has not made investors optimistic about Chinese companies.
Hong Kong's Apeiron Capital has promoted Chinese riding company Didi Global, citing its increased profit margins at home and its rapid market share in Latin America. Meanwhile, Triata Capital is optimistic about Temu's owner PDD for China's discount e-commerce player PDD.
"A lot of people don't know now that their MAU is now bigger than Amazon," said Triata Cio Sean Ho.
India
Two investors have turned their attention to the medical field in India.
Singapore's Arisaig Partners favors India's leading pharmacy chain Medplus Health Services, whose dedicated label products enhance its low-price proposition, thus widening the gap with its competitors.
"Inflation is low, the government is focusing on the middle class, and the base of consumer spending is low. I simply think this is a time when the consumer space will be better overall," Vatsal Mody, partner and head of research at Arisaiig Partners, said in an interview before the meeting.
India-based hedge fund startup Panvira Management is bullish on Piramal Pharma of the Contract Development and Manufacturing Organization (CDMO), expecting its growth to accelerate to teenagers and benefit from tax rate normalization.
Safety and activist
Other emerging hedge funds focus on opportunities in security sectors driven by geopolitical conflict.
Jon Jhun, who manages My.Alpha Management's new Korean fund, chose Modern Engineering & Construction, which is engaged in nuclear power plant engineering, procurement and construction (EPC).
"South Korea dominates former Russia former China's nuclear supply chain," he said.
Frontline global managers in Hong Kong chose Spanish defense company Indra Sistemas, who believes the company will win more European contracts.
On the side of radical investors, British hedge fund Palliser Capital disclosed a 3% stake in Japan's Toyota Tires at the event, urging tire manufacturers to improve shareholder returns by setting "first-class" performance targets and release their excess capital to shareholders about $900 million.
Seth Fischer's Oasis Management is the first round of the long-term Japanese entertainment comprehensive chain, betting that it will reassess as it ventures into the restaurant industry with the aim of bringing Michelin-quality Japanese food to the United States
(Reported by Summer Zhen; Editor of Sonali Paul)