We have a variety of emerging market fund stock picks to highlight this week (among other stocks also getting mentions late on in this post) with some quick takes being:
- Several Chinese or Indian stocks that were the subject of recent fund manager trip reports to China and India.
- A Hong Kong food distributor with a focus on Japanese food and beverage products which are popular in the city.
- A Taiwanese automation stock albeit most of their operations are in China.
- A once troubled Indian digital focused bank that has turned things around and is rebranding itself.
- A SE Asian ICT stock that is only national ICT company that is publicly listed in it’s home country.
- An Eastern European hydroelectric stock who’s recent IPO was one of the largest so far this year.
This week, we also cover a podcast or some trip reports about recent fund manager visits to both China and India along with their impressions. As mentioned last week (China’s Problems That Few People Talk About (And Investor Implications)), China can be a Potemkin Village for western visitors.
Likewise, visiting a couple of key cities (or their tourist and business districts) in a foreign country is the equivalent of trying to form an impression of the USA just from visiting Washington DC, NYC, San Francisco, or LA. Most Americans do not live in these cities or even in heavily “urban” areas as they live in much smaller cities, suburbs, or exurbs. I guess the same can be said of most Chinese and Indians…
In summer of 2018, I used frequent flyer miles to visit what was once Manchuria and went to Shenyang, Changchun, Paektu Mountain, Harbin, and Dalian. All of these cities are connected by highspeed train (bookable online) which made travel between them quick and easy (however, I had to take a bus that broke down on the way to the resort town at the foot of Paektu Mountain).
As one fund manager pointed out in his trip report covered by this post, Chinese cities have gotten much more livable although he just went to the main cities that foreigners typically visit.
For a so-called “rust belt” area with a declining population, the cities I visited in the northeast part of China were fairly pleasant with plenty of green space for residents and subways with limited lines but enough to get around to the main attractions without needing a taxi. I do remember seeing a number of homeless people in the vicinity of the Changchun train station (but nothing like what you see in California) – something I never noticed around train stations in key cities like Beijing or Shanghai.
I used ctrip.com owned by Trip.com (NASDAQ: TCOM) to book accommodations (namely international hostels) plus highspeed trains using my foreign credit card and their English customer service was excellent. Since few foreigners visit these cities and it was not always clear from the listing if foreigner passport holders were allowed to stay at the accommodation I wanted to book (Changchun had a reputation for strict enforcement), customer service (I would use their human chat messaging service) would call the property to double check (as some don’t know how to fill out or just don’t want to fill out the required police report – especially if they can’t figure out a passport in Latin script).
Usually, somebody could speak English at Chinese hostels (or I could use Wechat) and you get to meet ordinary Chinese (who you would otherwise not interact with at a business or tourist class hotel) or other travelers from around the world.
I remember meeting a young girl at my hostel in Shenyang who was actually from the Guangzhou area. When ever she had a holiday or vacation, she would hop on a cheap night train (to save money on accommodations) and go to a different part of China (she had already been to the famous winter ice festival in Harbin). Like with Western backpackers, travel was something she enjoyed doing plus I guess it’s reasonably safe for a young girl to travel by train alone in China and stay at backpacker accommodations.
However, international hostels in China were still far behind their Asian counterparts when it comes to overall cleanliness and comfort. For example: At the only “international” hostel in Shenyang, some locals were smoking in the upper bunks while the whole place (and especially the bathrooms) definitely needed a deep cleaning…
Also, I had to stay in a hotel in Changchun (sort of a local chain version of a Holiday Inn Express that local tourists or business travelers would stay at – not international business travelers with fat expense accounts) as there were no hostels there.
The room was up to international standards regarding cleanliness and comfort. However, and when I came back after walking around the city for two hours after checking in, I was greeted by these “room service” calling cards shoved under my doorway:
The next day, after coming back from the “Last Emperor’s” palace complex where they also filmed the Last Emperor movie (it’s the main attraction in the city aside from the Japanese art-deco architecture), there were two more calling cards under my hotel door…
Needless to say, I do find trip reports by fund managers to always be an interesting read. Even if they are only a superficial country visit or a carefully choreographed company visit, they usually offer interesting insights as everyone has a different perspective…
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