(Bloomberg) -- The Sohn investment conference returns to Hong Kong on Thursday, with most of last year’s bullish pitches doing well. 

Japan is set to once again take center stage at the Sohn Hong Kong Investment Leaders Conference a year after the country and India captured the imagination of international investors shifting away from China. 

The gathering in 2023 was held in person for the first time since the pandemic, and also marked the return of China picks after their conspicuous absence a year earlier. Yet a long call on on Tokyo-based Disco Corp. by Tybourne Capital Management’s Eashwar Krishnan trumped other pitches, in a year when artificial intelligence and energy transition were the buzzwords. Overall, most of the ideas scored double-digit gains.

The lineup for the 2024 event, the 12th annual gathering, hints at continuing enthusiasm for Japan. At least four of the main stage speakers have worked in Asia’s second-largest economy or are specialists in the country, including Zennor Asset Management’s David Mitchinson, Japan Catalyst Inc.’s Taro Hirano, Kaname Capital’s Toby Rodes and Oasis Management’s Seth Fischer. The future of AI may not be far from the audience’s minds, with presentations from Chris Wang, who leads CloudAlpha Capital Management’s new AI-focused fund, and Krishnan, whose firm specializes in high-growth technology and consumer companies.

Here is a recap of last year’s ideas and how they have fared. Performances are based on local-currency price moves between May 17, 2023 and May 21, 2024.


The call: Tybourne’s Krishnan saw a near-doubling in the share price of the Japanese maker of cutting, grinding and polishing machinery in three years. Its silicon carbide-related sales could nearly quadruple by 2027. The automobile-related market for the highly durable material would grow at a 39% annual clip over the next five years, he said then.

The outcome: The stock has more than tripled since last year’s conference. Even with the slowdown in the global electric vehicle market this year, Disco’s Kabra equipment for making silicon carbide wafers is sold out for 2024 and 2025, Tybourne said. It also makes essential grinding and dicing equipment for components of AI chips. The only provider globally, it has seen strong order growth. Management plans to double equipment production capacity in the next two years. 

BPER Banca

The call: Mark Tinker, who helped open up Toscafund’s  Hong Kong office during the pandemic in early 2022, made a broad pitch favoring European banks as the beneficiaries of an evolving new normal in the world, and pinpointed Italian lender BPER Banca SpA as an example. European banks stood to benefit from normal short-term interest rates, and had strong balance sheets that enabled them to pay dividends and buy back shares. An added plus was that the failure of Silicon Valley Bank was fresh on people’s minds, and most investors were quite negative on banks, Tinker said in an interview.

The outcome: BPER Banca’s stock soared 82% since Tinker’s pitch, as the company more than double its annual dividend in the past year. Broadly, the Stoxx 600 Banks Index of European lenders is up 36% since last year’s conference. “European financials have been and remain one of my themes that I invest in,” Tinker said. 

Fortis Healthcare 

The call: Masahiko Yamaguchi, chief investment officer of MY.Alpha Management, touted a 40% to 60% upside to the share price of India’s Fortis Healthcare Ltd. Lifestyle-related diseases are rising in the country, underpinning long-term demand for healthcare. A lack of doctors and nurses creates a moat to operate in the industry. The company was trading at a discount because of its previous owners. New management cleaned up its books, and margins had gone up.

The outcome: The stock has surged 64% since last year’s conference. Concerns about the Indian supreme court’s 2018 halt of an open offer by Malaysia’s IHH Healthcare Bhd to buy additional shares have faded. Revenue growth and improving profit margins drove a re-rating of the Indian hospital operator’s valuation, narrowing its discount to peers, but the stock remains “very attractive,” Yamaguchi said.

NGEx Minerals 

The call: Jeremy Bond of Terra Capital pitched Canadian copper and gold miner NGEx Minerals Ltd., as he expected copper prices will be supported by limited supply. He was also bullish on gold because of continued uncertainty in the banking sector and buying of the metal by global central banks.

The outcome: NGEx Minerals’s shares jumped 54% in the past year, more than triple the return of the MSCI World Materials Sector Index during the period. The stock has been riding on a sharp rally of copper and gold prices, which jumped 39% and 24% in the past year, respectively. Bond is holding onto the stock as he expects the share rally to continue, and future catalysts include encouraging drilling results and a further increase in prices. “We’re encouraged by the uptick in demand and we continue to think the supply remains constrained across the commodity complex,” he said. “We’re confident in the commodity rally.”

Mobile World Investment

The call: Gordon Yeo, co-CEO of Singapore-based Arisaig Partners, picked Mobile World Investment Corp., a retailer in Vietnam that was expanding into the grocery business. While government arrests and reduced manufacturing had hurt the country’s investment appeal, he was sure it had the bulk needed to boost profitability compared with its peers when the market recovered.

The outcome: While Mobile World saw a major slump between September and November of last year, it quickly recovered and has been a hit with investors — rising 59% since last year’s event. Part of that was driven by foreign investors rotating out of China in favor of Southeast Asian stocks. While Arisaig sold some of the stock when it started hitting risk limits, it remains the firm’s second-biggest position. “I don’t think it’s pricey at all,” Yeo said. “The margin recovery for its consumer electronics business still has legs” and the grocery chain will contribute to profits, he said.  


The call: Partners Bay CIO Wei Hee pitched a contrarian bet on Malaysia’s Hartalega Holdings Bhd being the best player in the disposable rubber glove industry. It was run by strong founders and management, priced at a low multiple of normalized earnings while enjoying long-term growth. The industry was showing early signs of consolidation, an indication that the worst of the post-Covid slump might be over. Hartalega’s modest capacity expansion during Covid would position it well.

The outcome: Hartalega rebounded 51% since last year’s conference, as glove prices stabilized and the outlook for makers improved, Hee said. The stock has gone through a roller-coaster ride in the last few years, from more than doubling at the peak of the Covid panic in 2020 to tumbling 53% in 2021 and a further 70% in 2022 amid a glut of supply and reduced demand.


The call: Jay Shin revealed that Seoul-based Quad Investment Management had taken a 5% stake in Hy-Lok Corp., the South Korean maker of precision fittings and valves for the petrochemical, semiconductor and power generation industries. He was engaging with the management, pressing them to agree to a return profile that’s better for more shareholders. He said it’s time to push for changes in the country, where family businesses face succession and corporate governance issues.  

The outcome: Shin didn’t reply to a Bloomberg News query. The stock has rallied 35% since last year’s event.

Fukuda Denshi 

The call: Toby Rodes of Kaname Capital said shares of Japanese medical equipment maker Fukuda Denshi Co. had the potential to double, if not triple. The business had high margins and good cash flow, but weak management and corporate governance issues — including a poison-pill provision. Rodes highlighted the broader opportunities in activist investing in Japan with high-quality but undervalued stocks.

The outcome: Japan was one of the best-performing markets in Asia in 2023, and Fukuda Denshi’s stock has benefited but not outperformed. Shares are up about 29% since last year’s conference, on par with gains in the Topix and Nikkei indexes. Rodes said Fukuda Denshi hasn’t addressed any of the corporate governance issues he pointed out, aside from putting the poison pill measure to a shareholder vote this year. “We still believe it is woefully undervalued owing to the continuance of governance issues,” he said.

China Yangtze Power

The call: Richard Lawrence, founder of Overlook Investments Group, made the case for Chinese state-owned enterprise China Yangtze Power Co., which operates hydroelectric power facilities including the Three Gorges Dam. Its renewable energy focus, good governance and solid margins made it a big winner, he said.

The outcome: While many other Chinese stocks were pummeled, Yangtze Power has been a relatively steady performer. Its share price has risen 14% since last year’s event, thanks to consolidation, increased power production and its position as a leading player. Despite some rebalancing, Overlook remains a holder thanks to the firm being “the best free cash flow generator that I’ve seen in my career,” said Lawrence, who is unfazed by geopolitics. “If you think the Chinese are going to take over all assets and kick out all foreigners and give us all zero for our investments, you really shouldn’t be investing internationally,” he said, adding public equity investors would be far down on the list of targets. “It’s not a zero probability but it’s a very low probability.”

Chinese education companies

The call: Oasis’s CIO Seth Fischer debunked the idea that the entire Chinese education industry had become uninvestable after regulatory changes. He spotted opportunities in the higher-education and vocational-school segments. The latter’s mission to train skilled labor, the backbone of the economy, was aligned with government policies and could be profitable, he said. Yet vocational schools were trading at extremely low valuations. He singled out China Education Group Holdings Ltd. shares, China YuHua Education Corp. convertible bonds and Hope Education Group Co. credit as attractive investments.

The outcome: It has been a mixed bag. China Education’s share price dropped another 24% since last year’s event, even after profit growth and an interim dividend hike contributed to a rebound since mid-April. Fischer believes the market is just beginning to recognize it as the differentiated market leader. “We continue to believe in the equity story, and even more so in an environment where onshore investors are looking for dividend and dividend growth profile stocks,” he said. YuHua restructured its remaining convertible bonds after missing a December 2022 redemption. Fischer believes it has “ample means” to pay back the bonds due in December. Hope, since renamed XJ International Holdings Co., defaulted on $315 million of convertible bonds in March, prompting creditors to file a winding-up petition in Hong Kong. “The company remains in healthy condition and its assets are all operating well,” Fischer said. “Ultimately, we believe recovery value will be significant.”

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