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Finding gems in Thailand and kicking tires in Bangladesh

Burton Flynn

October 2017


Finding hidden gems in Thailand


In the lobby of an industrial office, fifty meters from a shipping dock on the Chao Phraya River in Bangkok, I watch an employee drag what appears to be large laundry bags out of a meeting room and then quickly mop the floor. My meeting with the CEO of a $60m Thai flour mill company was held in that room five minutes later. Clearly, they don’t receive visitors often, I thought to myself excitedly. The CEO soon confirmed that I was the first international investor he had ever met.

Very little about the company is found online and Bloomberg only lists one local analyst covering it. These are the types of stocks we love because we have a better chance of identifying hidden gems. During the meeting with the CEO, we learned about a recent capacity expansion and vertical integration opportunities, which should continue to drive earnings growth similar to the high rates the company has achieved over the past two years. This is why we travel to developing countries far away from home: in search for value.

Meeting companies is an important part of our process. In the first three quarters of 2017 we traveled to Egypt, Indonesia, Malaysia, Mexico, the Philippines, South Africa, Thailand, Turkey, and Vietnam in search of the best investment opportunities in the developing world. These trips give us much better perspectives than desk research and phone calls. This month included travel to Thailand and Bangladesh to meet with 14 companies in four days.

Kicking the tires in Bangladesh

After landing at the Dhaka airport, ranked one of the worst in Asia, it took nearly two hours to complete the process of obtaining a visa-on-arrival, and another hour in traffic to get to the hotel less than 10km away, despite the fact that it was a Sunday evening. It’s clear that the potential impact of infrastructure and institutional improvements is enormous. For example, the Padma bridge alone, which will link the southwest of the country to the northern and eastern regions when finished next year, is expected to boost Bangladesh’s GDP by over 1%!​


When possible, we use the products and services of the companies we’re meeting with in order to “kick the tires.” Before leaving the Dhaka airport, I purchased a SIM card of the leading Bangladesh telecom company in order to experience the network for myself before meeting with the CEO the next day. As someone who has been spoiled by 4G networks for many years, being limited to 3G helped me appreciate the huge potential for data penetration from the network upgrade expected next year.

During my trip to Bangladesh, I bought pastries from a small shop near my hotel; weaved through traffic, humans, and animals on a motorized rickshaw to quickly get to a meeting; turned down an offer to buy a live chicken for about $2; took a local bus packed shoulder-to-shoulder with Bengalis; and chatted with locals about their cell phone providers while visiting the country’s “best” mall (which was very underwhelming). Getting a better glimpse of life from the perspective of the consumers gives me valuable insight into investment opportunities.

These visits are one of the factors that have led to our fund’s top performance since the fund’s inception four years ago. I look forward to rounding out the year with visits to Argentina, Chile, Peru, and Saudi Arabia.

A day in the life

Wed, Oct 18, 2017 in Bangkok, Thailand:

7 am: Wake up, eat breakfast
8 am: Leave hotel for first meeting
9 am: Meeting with CEO and director of a $230m steel product manufacturing company
10 am: Leave for next meeting
11 am: Meeting with CEO of a $100m tool bit manufacturing company
12 pm: Leave for next meeting, eat lunch in car
1 pm: Meeting with SVP of investor relations of a $7bn global chemicals company
2 pm: Leave for next meeting
3 pm: Meeting with CEO of a $60m flour mill company
4 pm: Head back to hotel
5 pm: Arrive at hotel, finish notes from meetings
6:30 pm: Dinner with broker, discuss stocks and macro environment
9 pm: Prepare for next day's meetings
11:30 pm: Go to sleep

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