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I first took notice of AGT Partners when they multiplied their money with Oiltek and then Dyna-Mac (the one that got away from Keppel Ltd). They also made astute calls on the Spore construction sector, which has subsequently proven to be a huge right call.
A few notes:
(1) Interesting to see Sheng Siong been included in the bunch of well known world class names - Apple, TSMC, Tencent etc. This 3billion cap company started by pig butchers is in good company I suppose
(2) An interesting exercise to haphazard a guess on those names they invested in recently. The HK commercial landlord is a dead giveaway as it is revealed that it traded at 0.3x BV and is doing active SBB. It has to be the Taipan's HKL. My bet is that the Spore construction company is OKP.
(3) Msian OSV owner and department store chain: These are sectors that most people already gave up looking due to the headwinds and previously deep bear market which has bankrupted quite a couple of companies. (OSV). I had looked at them before and got scared away. AGT is also looking with interest at US commercial, China property, OSV suppliers and thermal coal. These are sectors which will probably get more unloved as the bull market roars ahead. But as AGT Partners have signaled, these unloved sectors may be ripe for profit one day - Either they could be good candidates for us as we look for our next profit potentials (yes, those lucky VBs who bought into YZJF <0.4sgd and still keep majority), or they could continue to be rejected by the bulls but the bulls could turn out to be right.
Q2 2025 Shareholder Letter
These companies have sustainable competitive advantages, long track records, and entrenched industry positions, making their futures bright over the long term. We intend to hold most of these investments forever, using periodic share price weaknesses as opportunities to add. Examples include Apple, BYD, KKR, Sheng Siong, Tencent and TSMC, among others. However, investing in this category often poses a valuation challenge, as these businesses are widely recognized and tend to trade at premium prices, except during severe macroeconomic crises or temporary company specific downturns.
We also own promising smaller companies with interesting near-term prospects, currently selling at low valuations (single-digit earnings multiples). These companies are often neglected and unloved by the broader investment community, resulting in possible undervaluation. While their 10-year prospects may be uncertain to us, a sufficiently high level of margin of safety can make them quite attractive investments. We have recently invested in a major Hong Kong commercial landlord, a Malaysian offshore supply vessel owner, a Malaysian department store chain, and a Singaporean construction company. Our purchases were made at attractive valuations, with the Hong Kong landlord trading at 0.35x price-to-book and the others at 3-5x price-to-earnings multiples. The Hong Kong landlord’s share price has performed well following management's aggressive divestment of non-core assets and share repurchases. The other three investments have also benefited from the broader market rally. Ultimately, our success hinges on whether their underlying earnings power improves. Time will tell. We hope to build meaningful positions in these companies, ideally before they gain wider recognition.
Certain industries, such as US commercial property, US homebuilders, China property developers, regional oil and gas offshore supply vessel companies, and Indonesian thermal coal companies etc., are trading at depressed valuations due to oversupply and sluggish demand. These industries have been in bear markets for years, resulting in low valuations and a good margin of safety. However, their cyclical nature and lack of strong competitive advantages make low valuations justified in the near term. As weakened competitors reduce capacity or exit, supply will decrease. If demand stabilizes or declines at a slower rate, the oversupply situation will eventually correct itself, leading to improved economics for the remaining companies. While the timing and duration are uncertain, we recognize the higher risks but also potential for good value in this category. We will continue to research closely and act decisively when opportunities arise.
https://agtpartners.com.sg/wp-content/up...Letter.pdf
A few notes:
(1) Interesting to see Sheng Siong been included in the bunch of well known world class names - Apple, TSMC, Tencent etc. This 3billion cap company started by pig butchers is in good company I suppose
(2) An interesting exercise to haphazard a guess on those names they invested in recently. The HK commercial landlord is a dead giveaway as it is revealed that it traded at 0.3x BV and is doing active SBB. It has to be the Taipan's HKL. My bet is that the Spore construction company is OKP.
(3) Msian OSV owner and department store chain: These are sectors that most people already gave up looking due to the headwinds and previously deep bear market which has bankrupted quite a couple of companies. (OSV). I had looked at them before and got scared away. AGT is also looking with interest at US commercial, China property, OSV suppliers and thermal coal. These are sectors which will probably get more unloved as the bull market roars ahead. But as AGT Partners have signaled, these unloved sectors may be ripe for profit one day - Either they could be good candidates for us as we look for our next profit potentials (yes, those lucky VBs who bought into YZJF <0.4sgd and still keep majority
), or they could continue to be rejected by the bulls but the bulls could turn out to be right.Q2 2025 Shareholder Letter
These companies have sustainable competitive advantages, long track records, and entrenched industry positions, making their futures bright over the long term. We intend to hold most of these investments forever, using periodic share price weaknesses as opportunities to add. Examples include Apple, BYD, KKR, Sheng Siong, Tencent and TSMC, among others. However, investing in this category often poses a valuation challenge, as these businesses are widely recognized and tend to trade at premium prices, except during severe macroeconomic crises or temporary company specific downturns.
We also own promising smaller companies with interesting near-term prospects, currently selling at low valuations (single-digit earnings multiples). These companies are often neglected and unloved by the broader investment community, resulting in possible undervaluation. While their 10-year prospects may be uncertain to us, a sufficiently high level of margin of safety can make them quite attractive investments. We have recently invested in a major Hong Kong commercial landlord, a Malaysian offshore supply vessel owner, a Malaysian department store chain, and a Singaporean construction company. Our purchases were made at attractive valuations, with the Hong Kong landlord trading at 0.35x price-to-book and the others at 3-5x price-to-earnings multiples. The Hong Kong landlord’s share price has performed well following management's aggressive divestment of non-core assets and share repurchases. The other three investments have also benefited from the broader market rally. Ultimately, our success hinges on whether their underlying earnings power improves. Time will tell. We hope to build meaningful positions in these companies, ideally before they gain wider recognition.
Certain industries, such as US commercial property, US homebuilders, China property developers, regional oil and gas offshore supply vessel companies, and Indonesian thermal coal companies etc., are trading at depressed valuations due to oversupply and sluggish demand. These industries have been in bear markets for years, resulting in low valuations and a good margin of safety. However, their cyclical nature and lack of strong competitive advantages make low valuations justified in the near term. As weakened competitors reduce capacity or exit, supply will decrease. If demand stabilizes or declines at a slower rate, the oversupply situation will eventually correct itself, leading to improved economics for the remaining companies. While the timing and duration are uncertain, we recognize the higher risks but also potential for good value in this category. We will continue to research closely and act decisively when opportunities arise.
https://agtpartners.com.sg/wp-content/up...Letter.pdf
