FundManagerZech
๐Ÿง [๐—–๐—ผ๐—ฝ๐—ถ๐—ฒ๐—ฟ๐˜€ ๐—”๐—ฐ๐˜๐—ถ๐—ผ๐—ป ๐—ฅ๐—ฒ๐—พ๐˜‚๐—ถ๐—ฟ๐—ฒ๐—ฑ] ๐—”๐—ป ๐—ข๐—ณ๐—ณ๐—ฒ๐—ฟ ๐—”๐—ฏ๐—ผ๐˜ƒ๐—ฒ ๐— ๐—ฎ๐—ฟ๐—ธ๐—ฒ๐˜ ๐—ฃ๐—ฟ๐—ถ๐—ฐ๐—ฒ? ๐—›๐—ฒ๐—ฟ๐—ฒโ€™๐˜€ ๐—ช๐—ต๐˜† ๐—ช๐—ฒโ€™๐—ฟ๐—ฒ ๐—ฉ๐—ผ๐˜๐—ถ๐—ป๐—ด ๐—ฌ๐—ฒ๐˜€ ๐Ÿง TL;DR ๐Ÿ“Œ China National Building Material ($3323.HK (China National Building Material)) has struggled, down 50%+ from our buy price and 70%+ from its peak. ๐Ÿ“Œ Despite this, it remains fundamentally strong: cheap valuation, state-backed, and still profitable. ๐Ÿ“Œ EGM vote needed: Abstaining on Item 1, Voting FOR Items 2 & 3. If you received an email, make sure to vote! ๐Ÿ“ข ๐—”๐—ฐ๐˜๐—ถ๐—ผ๐—ป ๐—ฅ๐—ฒ๐—พ๐˜‚๐—ถ๐—ฟ๐—ฒ๐—ฑ ๐—ณ๐—ผ๐—ฟ ๐—–๐—ผ๐—ฝ๐—ถ๐—ฒ๐—ฟ๐˜€: ๐—˜๐˜ƒ๐—ถ๐—ฑ๐—ฒ๐—ป๐—ฐ๐—ฒ ๐—ผ๐—ณ ๐—ฎ ๐—›๐—ถ๐—ด๐—ต๐—น๐˜† ๐—œ๐—ป๐—ฒ๐—ณ๐—ณ๐—ถ๐—ฐ๐—ถ๐—ฒ๐—ป๐˜ ๐— ๐—ฎ๐—ฟ๐—ธ๐—ฒ๐˜ ๐Ÿ“ข When I was younger, I remember coming home from school, disappointed by my exam results. My immediate reaction was: I need to study harder, put in more effort, maybe even take extra classes. This mindset worked for a while, but then I noticed somethingโ€”some people put in less effort yet somehow achieved better results. Weโ€™re told that hard work, intelligence, and the right tools lead to success. Yet, when I ask people if they know someone at work who isnโ€™t as good as them but earns more, the answer is almost always yes. The reality? Politics, timing, and luck also play a role in success. I bring this up because one of our largest positions, 3323 (China National Building Material Company Limited), has been struggling. The stock has dropped over 50% since we bought it and more than 70% from its peak. Yet, hereโ€™s the reality: โœ… Decent valuation โœ… State-owned (low risk of failure) โœ… Still generating income despite a weak market This is a good stockโ€”weโ€™ve done the deep dive, read the reports, and put in the work. But the market doesnโ€™t always reflect reality. Homo Economicus (the theory that markets are purely rational) is a myth. The market is often irrational. What I do like, however, is when a company takes matters into its own hands. ๐Ÿšจ ๐—”๐—ฐ๐˜๐—ถ๐—ผ๐—ป ๐—ฅ๐—ฒ๐—พ๐˜‚๐—ถ๐—ฟ๐—ฒ๐—ฑ: ๐—ฉ๐—ผ๐˜๐—ฒ ๐—ผ๐—ป ๐˜๐—ต๐—ฒ ๐—˜๐—š๐—  ๐Ÿšจ You may have received an email (see pic below) asking you to vote on an Extraordinary General Meeting (EGM)โ€”this happens when something outside the companyโ€™s normal powers needs shareholder approval. For Item 1 (director appointment), Iโ€™m abstaining. For Items 2 & 3 (buyback & whitewash waiver), Iโ€™m voting FOR. ๐—ช๐—ต๐˜† ๐—ฑ๐—ผ๐—ฒ๐˜€ ๐˜๐—ต๐—ถ๐˜€ ๐—บ๐—ฎ๐˜๐˜๐—ฒ๐—ฟ? ๐Ÿ“Œ The company is repurchasing shares at HK$4.03โ€”about 10% above the current price. ๐Ÿ“Œ This buyback represents 10.83% of the companyโ€™s market cap. ๐Ÿ“Œ Adding the 7% dividend yield, the total Shareholder Yield is 17.83%. Yes, the company has high debt, but itโ€™s at low rates due to SOE status. This buyback is also part of the governmentโ€™s stimulus efforts to revive the market. If youโ€™re invested, make sure you vote. This is one of those rare cases where shareholders actually have a say in value creation.
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