A group of 15 investors joined us on a 12-day trip to China this month. We traveled to Beijing, Shanghai and Hong Kong to meet with our managers and visit their portfolio companies, as well as experience China’s cultural and culinary highlights.
Business highlights included:
- Receiving economic and investment briefings from Chinus managers. We learned how they are finding investment opportunities in consumer and new economy companies that are experiencing high growth but trade at attractive valuations.
- Visiting portfolio company iFLYTEK’s showroom to see applications of its voice recognition software in cars, entertainment systems, appliances and intelligent controls. iFLYTEK has achieved over 40% annual revenue growth over the past five years and counts BMW and Samsung among its clients. Its GM told us that they expect revenue to grow substantially faster over the next three years as the “Internet of Things” takes off.
- Meeting with Chen Qiyu, Chairman of Fosun Pharma, one of China’s leading healthcare companies to hear their growth strategy.
Cultural highlights included:
- Private tour of the newly restored former residence of Emperor Qianlong of the Qing Dynasty inside the Forbidden City.
- Meeting with acclaimed fashion designer Han Feng at her studio in Shanghai where she discussed her creative philosophy and previewed her latest clothing line.
- Farewell reception and dinner at the China Club in Hong Kong hosted by Pete Nickerson with his honored guests Liu Mingkan, formerly the first Chairman of the China Banking Regulatory Commission and Chairman and President of Bank of China, and Jon Dolfin, a renowned Tibet scholar.
After the trip, investor Carl Christoferson commented:
We witnessed firsthand the exuberance, economic drive and immensity of China and its people. There are approximately 400 million hungry millennials driven commercially to consume which means they want to learn and earn to support this hunger. Even though the economy has, as you have read, materially grown over the past decade I believe there is significantly more growth to be realized. Retail rules in the big cities. Their ability to accomplish things quickly is dazzling. They are a “can do/will do” society. Their commercial/retail streets and Alibaba (a hybrid of Amazon and eBay) are selling products and services at world record levels – we saw and experienced it – it’s a frenzy. All the commercial questions I asked were addressed rationally (real estate bubble, corporate debt levels, slowing economy, sustainability and pollution initiatives, etc.…).
We believe it is incredibly valuable for people to travel to China and the rest of emerging Asia to see for themselves what is going on. It is a different world than what is portrayed in the press. We are planning to organize similar trips to India and SE Asia.