Investing in high growth Asian frontier economies., Asia Frontier Capital

Scott Osheroff

Investing in high growth Asian frontier economies.

Asia Frontier Capital

Asia Frontier Capital Ltd. is a pioneering fund management company based in Hong Kong that specializes in investing in high growth Asian frontier economies by managing the AFC Asia Frontier Fund , AFC Iraq Fund and the AFC Vietnam Fund.

The AFC Asia Frontier Fund invests in public equities of Asian frontier countries that are seeing increasing consumption due to favorable demographic trends, rising incomes and high GDP growth. The fund invests in listed equities of companies that have their principal business activities in Bangladesh, Bhutan, Cambodia, Iraq, Laos, Maldives, Mongolia, Myanmar (Burma), Nepal, Pakistan, Papua New Guinea, Sri Lanka and Vietnam. The AFC Asia Frontier Fund is positioned to take advantage of the continuing economic shifts in these countries and offers high returns combined with significant diversification opportunities. This fund is directed by the founder and CEO of Asia Frontier Capital, Thomas Hugger, who has been investing in frontier markets across Asia and Africa for more than 20 years.

The AFC Iraq Fund was launched on the 26th June 2015 and aims to achieve long-term capital appreciation for investors by capturing value and growth potential in the post conflict high-growth & resource rich Iraq market. The fund emphasises long term investment horizon to truly capture the opportunity in Iraq. The fund's investable universe consists of locally listed companies that have their principal business activities in Iraq as well as foreign listed companies that have the majority of the business in Iraq as a whole including the prosperous Kurdish Region of Iraq (KRI). The AFC Iraq Fund offers access to investments in post conflict recovery potential of Iraq, including the KRI, and/or stability in its territory. The AFC Iraq Fund is managed by Asia Frontier Capital (Iraq) Limited, Cayman Islands under the executive leadership team of Thomas Hugger (CEO & Fund Manager) and Ahmed Tabaqchali (CIO) who have more than 47 years of investment experience as well as an extensive background covering global, emerging, frontier and MENA markets.

The AFC Vietnam Fund invests exclusively in listed Vietnamese equities to capture value in growth companies with a focus on the small to medium size companies. This market segment offers a unique investment opportunity as the valuation gap between large- and small-cap stocks in Vietnam is presently much wider than in comparable neighboring markets and the valuations are significantly depressed versus their regional peers. The fund adopts a fundamental-quantitative approach and employs an in-house earnings model to identify attractive companies where we see high growth opportunities. In conjunction with targeting the maximum upside potential the portfolio has been structured to mitigate corporate government and liquidity risks. The fund invests in a diversified portfolio of 70-90 attractively valued companies to carefully control concentration risk.  This approach allows the fund to sell, or buy, positions without having a significant market impact. The fund is directed under the executive leadership of Thomas Hugger and Andreas Vogelsanger who have more than 50 years combined experience managing investments in frontier markets, Asia and around the world.

For more information about the fund, management team and investment strategy please contact us at info@asiafrontiercapital.com.

Thematic (Sector/Industry)

I had the opportunity in early October 2016 to attend a three-day fund manager conference organized by one of our Pakistani brokers in Lahore (one day) and two days in Karachi, followed by my own visits to some of our investee companies and a number of promising companies pinned down by our research efforts...

I had the opportunity in early October 2016 to attend a three-day fund manager conference organized by one of our Pakistani brokers in Lahore (one day) and two days in Karachi, followed by my own visits to some of our investee companies and a number of promising companies pinned down by our research efforts...

Asia Frontier Capital Travel Report: Pakistan

Frontier and emerging markets (Vietnam)

Dylan Waller

Nomadic Equity

Pakistan's UpgradePakistan received its well deserved emerging market upgrade from MSCI last week, and valuation still remains below its historical high experienced when it was previously an emerging market.  Now is a strong time to swoop in to profit from Pakistan's future upside, as the market has the potential trade at up to 13.8X its earnings, based on its historical valuation.  Unfortunately, this is a case where simple exposure through an ETF, the <a href="https://www.smartkarma.com/entities/21016" target="_blank" data-smartkarma-citation="entities:21016">Global X Msci Pakistan Etf</a>, is not an…

Pakistan's UpgradePakistan received its well deserved emerging market upgrade from MSCI last week, and valuation still remains below its historical high experienced when it was previously an emerging market.  Now is a strong time to swoop in to profit from Pakistan's future upside, as the market has the potential trade at up to 13.8X its earnings, based on its historical valuation.  Unfortunately, this is a case where simple exposure through an ETF, the Global X Msci Pakistan Etf, is not an…

Top Industries for Investment as Pakistan Transitions to an Emerging Market

The cement industry in Pakistan has a flurry of advantages ahead of it, and can be considered a strategic industry for investment in Pakistan:<ul><li>Local demand for cement is growing, and companies are responding by constructing new cement plants.</li><li>Exports growth will slow, primarily driven by issues in South Africa, yet this is not strong enough to offset the strong domestic demand.</li><li>Investment in Pakistan's cement industry should be a long term endeavor.</li></ul>

The cement industry in Pakistan has a flurry of advantages ahead of it, and can be considered a strategic industry for investment in Pakistan:Local demand for cement is growing, and companies are responding by constructing new cement plants.Exports growth will slow, primarily driven by issues in South Africa, yet this is not strong enough to offset the strong domestic demand.Investment in Pakistan's cement industry should be a long term endeavor.

Pakistan's Cement Industry Poised for Further Growth

External broker reports(aggregated public sources), Topline Securities

Topline Securities

External broker reports(aggregated public sources)

Topline Securities is one of the fastest growing brokerage houses in Pakistan. It has strong equity brokerage, economic / equity research, mutual fund distribution, commodity trading and corporate finance & advisory functions. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<ul><li>We had a meeting with the senior management of Engro Holding Company (ENGROH), comprising of Mr. Farooq Barkat Ali, CFO of Engro Holdings, and Mr. Usman Hassan, GM Group Portfolio Performance Management.</li><li>The company concluded a US$563mn transaction with VEON Group Pakistan, making it the 16th largest Independent Telecom Company (ITC) globally. The company sees strong growth potential in the independent tower business and may explore future opportunities with the right time and correct partner.</li><li>On the fertilizer segment, management expects current flood situation is not worse than 2022 floods. At present, they do not see demand falling by more than 4–5%.</li></ul>

We had a meeting with the senior management of Engro Holding Company (ENGROH), comprising of Mr. Farooq Barkat Ali, CFO of Engro Holdings, and Mr. Usman Hassan, GM Group Portfolio Performance Management.The company concluded a US$563mn transaction with VEON Group Pakistan, making it the 16th largest Independent Telecom Company (ITC) globally. The company sees strong growth potential in the independent tower business and may explore future opportunities with the right time and correct partner.On the fertilizer segment, management expects current flood situation is not worse than 2022 floods. At present, they do not see demand falling by more than 4–5%.

Engro Holding (ENRGOH) - Management Meeting Takeaways; Strong Growth Potential In Tower Business

<ul><li>We reiterate our BUY stance on ENGROH as company is trading at discount of 39% at current price of Rs229 compared to SOTP value of Rs373/share.</li><li>Our liking for this scrip is based on (1) addition of thermal assets back to its continued operations as its divestment deal couldn’t materialized previously and (2) the completion of the deodar deal and turning of Enfrashare into profit.</li><li>We expect thermal assets including Engro Powergen Thar Limited (EPTL), Sindh Engro Coal Mining (SECMC) and Engro Power Qadirpur (EPQL) to add Rs16.91/share to the consolidated profits of the company in 2026.</li></ul>

We reiterate our BUY stance on ENGROH as company is trading at discount of 39% at current price of Rs229 compared to SOTP value of Rs373/share.Our liking for this scrip is based on (1) addition of thermal assets back to its continued operations as its divestment deal couldn’t materialized previously and (2) the completion of the deodar deal and turning of Enfrashare into profit.We expect thermal assets including Engro Powergen Thar Limited (EPTL), Sindh Engro Coal Mining (SECMC) and Engro Power Qadirpur (EPQL) to add Rs16.91/share to the consolidated profits of the company in 2026.

Engro Holdings (ENGROH) - Earnings Revised Up; Buy Stance Maintained

Pakistan

Engro Corporation Ltd. manufactures and markets fertilizers and plastics; generates electricity; and processes food.  The Company produces nitrogenous, phosphatic and blended fertilizers; polyvinyl chloride resin; and industrial automation products; develops electricity generating plants; produces dairy foods; and operates a liquefied petroleum gas and liquid chemical terminal.

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Engro Corporation (ENGRO PA)

Asia Frontier Capital Travel Report: Pakistan

I had the opportunity in early October 2016 to attend a three-day fund manager conference organized by one of our Pakistani brokers in Lahore (one...

Asia Frontier Capital

Top Industries for Investment as Pakistan Transitions to an Emerging Market

Pakistan's UpgradePakistan received its well deserved emerging market upgrade from MSCI last week, and valuation still remains below its historical...

Nomadic Equity

Pakistan's Cement Industry Poised for Further Growth

The cement industry in Pakistan has a flurry of advantages ahead of it, and can be considered a strategic industry for investment in...

Nomadic Equity

Engro Holding (ENRGOH) - Management Meeting Takeaways; Strong Growth Potential In Tower Business

We had a meeting with the senior management of Engro Holding Company (ENGROH), comprising of Mr. Farooq Barkat Ali, CFO of Engro Holdings, and Mr....

Topline Securities

Engro Holdings (ENGROH) - Earnings Revised Up; Buy Stance Maintained

We reiterate our BUY stance on ENGROH as company is trading at discount of 39% at current price of Rs229 compared to SOTP value of...

Topline Securities

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)