David Webb is a historical investor's right activist out of Hong Kong.
I recommend reading this fascinating article before going further, to know about him.
I really hope that he can beat his disease and keep doing what he loves, investing and improving corporate governance.
His portfolio is disclosed here:
https://webb-site.com/dbpub/webbchips.asp
The companies are all small caps from Hong Kong. I reviewed them quickly in order to find new ideas, and especially I was looking for domestic stocks.
Tungtex: is a textile and fashion manufacturer. He bought it straight after a large drop in december 2020 due to a special dividend. The company does operating losses before tax for three years so he must know of a turnaround or restructuration coming. I have no idea. This is not for me.
Top Form International Limited:
Sometimes pays a huge dividend. Manufacturer of bras. Very large right issues in Feb 21.
Turned back profitable in H1 2021, after 2 years of losses. Invests in South East Asia production bases. Need to see if the business will turn steadily profitable.
Yorkey Optical International: Is a industrial company. Constantly decreasing sales and flat to declining dividend.
ARTS OPTICAL INTERNATIONAL HOLDINGS LIMITED: Is a fashion glasses company.
Its not profitable, seemingly at breaking point. Need to see a turnaround to invest.
Alco Holdings Limited: a manufacturer of electronics products that specializes in audiovisual and IT equipment. Net loss for a few years but improving.
Million hope Aluminum: Is a company producing building claddings, aluminum windows and doors. It is profitable but not especially cheap. Exposed to the construction industry.
WINOX HOLDINGS LIMITED : Manufacturing company: its products include watch bracelets, costume jewelry, accessories and parts for leather goods and mobile phone cases and parts. It is cheap and profitable, therefore interesting.
Sun Hing Vision Group Holdings Limited is a fashion glasses company and manufacturer. its quite cheap from a FCF point of view (10x). Growth is not present, making the stock not a good choice.
Bauhaus International Holdings Ltd is a Retail stores fashion company. it has no growth, revenues dropped by 50% or more last year. Pays large dividends from cash reserves and generates high FCF despite no profits. It is a turnaround situation, having closed non performing stores.
RAYMOND INDUSTRIAL LIMITED: is an household appliance maker. Profitable and stable as well as quite cheap. Net cash, no debt. Decent if unexciting option.
FUJIKON INDUSTRIAL HOLDINGS LIMITED Is a manufacturer of headphones, packaging and components for headphones. Declining revenue.
Hong Kong Economic Times Holdings Limited, is a publisher of financial newspapers and websites. Profitable business and very interesting, despite recently declining sales.
KINGMAKER FOOTWEAR HOLDINGS LIMITED. Footwear manufacturing. decreasing revenue,
Computer and Technologies Holdings Ltd, Software and It service business. Slow growth but profit is not really growing.
Lion Rock Group Limited. book printing. Stable business, big dividend, very cheap. Little detail on the company website.
Ming Fai Group. Product and services for the hotel industry. Was a decent business until covid hit and now trades at 4X pre covid earnings. Turnaround.
Allan International Holdings: Household OEM and ODM appliance company with declining sales.
Time watch: Chinese branded watches. Profit rebounded strongly in 2021, putting the stock at a 6 PE. Manages point of sale + ecommerce. Interesting but very fluctuating industry. (Mass market+Middle income).
Chen Hsong Holdings: Industrial company. Stable business until large growth in 2021, Cheap by these metrics. Unsure if this is a new trend or a one off, business is a difficult one to predict future growth.
Giordano International: Clothing retailer, no growth, very cheap based on 2019 multiple.
International Housewares Retail: Homeware retailing. Constant growth and good competitive position. Only in HK, SG and Macau. Also very cheap and dividend payer. However the company received substantial subsidies due to covid.
Lung Kee Bermuda Holdings: Industrial manufacturing. Declining revenue.
Analogue holding: Engineering and construction. Cyclical industry.
Conclusion: It seems to me that his portfolio is hardly copy worthy for the average (like me) defensive investor. Most of the stocks are in turnaround or recovery. It is possible that he bought many of these during the covid19 market downturn.
Being on the ground, knowing the management and the small companies very well probably allows him to know when to get in or out of these stocks in potential turnarounds. They dont seem companies one can hold for a long time. A few exceptions are International Housewares Retail, Ming Fai Group and Hong Kong Economic Times Holdings Limited which seem more moaty businesses and that I will watch,
Thank you, Olivier for the update.
Some of the stocks in this list such as Tungtex, Arts Optical and Allan Int'l have been in David Webb's portfolio for well over a decade. I know this because I have followed Webb-site.com for over 20 years!
Unfortunately, most of the stocks are now trading at or near *all time lows*. Which means they not profitable, no matter how long ago he bought them.
Some stocks have paid dividends but those dividends would not have been enough to cover decades of inflation.
The current portfolio value is about US$172mn. I recall it was valued over US$400mn in the early-2000s.
David Webb's forensic stock research has been an invaluable asset to Hong Kong investment…
Thanks for the article. I too have been trying to make sense of David Webb's holdings. If you look at HKEX filings, he has actually been holding most of these positions for more than a couple of years. As you pointed out most of these companies are in sunset industries. He doesn't always buy them for a turnaround, but sometimes just to get the last puff in them. He initiates a stake then presses the management for paying large dividends, at times through selling its assets for more than the company's worth. Tungtex for instance sold its factory in Shenzhen and paid 22 cents dividend this year. Similarly, when he bought Ming Fai several years ago following Ming Fai's sale…