Pan-Asia Equity Bottom-up, Wickhams Hill

Lloyd Moffatt

I am a fundamental-value investment analyst with a bent for events and soft catalysts.

During my time on both the buy-side and sell-side I focussed on small and mid-cap companies in ASEAN, Australia and HK/China.

Although a generalist, my background as an engineer lends itself toward deep-dive research in more practical sectors like consumer and industrials.

Previous recommendations include:

Concepcion Industrial		(CIC PM)	BUY	03/12/2015		+100.1%
OSIM International		(OSIM SP)	BUY	11/12/2015		+36.9%
Bellamy's Australia Ltd	(BAL AU)	SELL	08/06/2016		+60%
Pryce Corp				(PPC PM)	BUY	14/07/2016		+105%
Rukun Raharja			(RAJA IJ)	BUY	16/02/2017		+61%
Asian Pay Television Trust (APTT SP)	BUY	30/12/2016		+67%

Pan-Asia Equity Bottom-up

FutureBright's 2Q18 Results Reaffirm Our 140% Target Return over 6-18 Months

Future Bright (703 HK): Key Catalysts Have Not Materialized, Will They Ever?

FutureBright (703 HK): Typhoon Dampens 3Q Results

Future Bright: Turnaround Continues with Positive Momentum Going into 2018

Future Bright (703 HK): Value of Hengqin Land Could Be Substantial

Future Bright (703 HK): Value Play on Macau Rebound, at 0.45x Book It Is Too Cheap to Ignore

Future Bright 3Q17: SSS +14.1% and Tiny Net Profit Show Inflection Point Has Been Reached

Future Bright (703 HK): 1H17 Results Are Soft, but Long Term Deep Value Proposition Remains

Research-Intensive Fundamental Value Advisor

Wickhams Hill

Wickhams Hill Capital is a research-intensive fundamental value advisor, on long and occasionally short investment opportunities concentrated in small and mid-cap public companies.

Equity Bottom-Up

Future Bright Holdings / Equity Bottom-Up

Future Bright is a leading restaurant and catering business, with 57 restaurants and 4 food courts operating in Macau, Mainland China, and Hong Kong. Their core business has suffered from reduced visitor spending following the crackdown on corruption in since 2014. A resurgence in Macau visitor arrivals and spending is now benefiting Future Bright, driving positive SSSg across all major restaurant categories, we believe will continue into the 2019 gaming license renewals.Future Bright has real-estate assets that are carried on the balance sheet at HK$913.7mn, well in excess of the HK$800mn market cap. One asset, in particular, is the company’s parcel of land in Hengqin that is slated for disposal. While carried on the books for HK$267mn, management estimates the value to be above HK$500mn.We believe that proceeds from the disposal, which are similar in magnitude to the current market cap, will by-and-large be returned as a special dividend. There is 70% upside, using our base case FY19 EBITDA scenario, conservatively assuming that the company trades at a post disposal trough EV/EBITDA multiple of 10x, with a bull case upside of 140%-180% on the revision in profitability to 2014 levels.

Future Bright is a leading restaurant and catering business, with 57 restaurants and 4 food courts operating in Macau, Mainland China, and Hong Kong. Their core business has suffered from reduced visitor spending following the crackdown on corruption in since 2014. A resurgence in Macau visitor arrivals and spending is now benefiting Future Bright, driving positive SSSg across all major restaurant categories, we believe will continue into the 2019 gaming license renewals.Future Bright has real-estate assets that are carried on the balance sheet at HK$913.7mn, well in excess of the HK$800mn market cap. One asset, in particular, is the company’s parcel of land in Hengqin that is slated for disposal. While carried on the books for HK$267mn, management estimates the value to be above HK$500mn.We believe that proceeds from the disposal, which are similar in magnitude to the current market cap, will by-and-large be returned as a special dividend. There is 70% upside, using our base case FY19 EBITDA scenario, conservatively assuming that the company trades at a post disposal trough EV/EBITDA multiple of 10x, with a bull case upside of 140%-180% on the revision in profitability to 2014 levels.

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