If you want me to dig deeper into an idea, vote for it. Use the poll at the end of this email.

NICE Information Service Co., Ltd. (030190 KS)

About (7 Aug 2026)

Share price: KRW 15,100

Market capitalisation: KRW 883 bn (USD 627 mn)

Enterprise value (EV): KRW 751 bn (USD 534 mn)

Average daily volume (ADV): KRW 2 bn (USD 1 mn)

NTM P/E: 9x

NICE is the largest credit bureau in South Korea. It has ~ 70% market share in the country’s consumer credit scoring market.

Main customers include banks that use the credit scores for both personal and corporate lending.

My initial estimate suggests ~ 10% free cash flow yield on EV, an attractive premium of ~ 6% over South Korea 10y government bond.

Under-recognised growth?

At 9x NTM P/E and 10% FCF yield, the market seems to be pricing zero growth.

At least MSD growth possible. However, it seems like NICE will continue growing revenue by at least mid-single digit (MSD).

Revenue is tied to loan growth in South Korea. NICE’s revenue growth accelerated significantly during 2019 and 2020, driven by a boom in lending.

Even though loan growth has now decelerated, it still remains between MSD and high-single digit (HSD). The Bank of Korea reported 0.7% YoY growth in private sector lending in May 2026.1 This works out to be ~ 9% annualised YoY growth.

Advertising. South Korea passed the Data 3 Act in early 2020.

Essentially, this new law allows NICE to sell its credit data to advertisers, so long the data is pseudonymised.

Instead of selling this raw data to third-party marketers, NICE acquired advertising agencies so it could capture the value itself.

Vietnam. Vietnam could contribute to stronger-than-expected growth. In May 2026, the State Bank of Vietnam issued a license for credit information service to NICE.2

Vietnam is Korea’s top destination for foreign direct investment (FDI), the second most popular country for Korean tourists, and the third largest trading partner.

Factors to focus on

1. What is the downside risk to loan growth in South Korea?

   1. It seems like household lending is facing some weakness due to high indebtedness, but this is being offset by corporate lending.3

2. Growth potential in advertising and Vietnam? Timeline?

3. Potential for more capital returns?

   1. Business is capital light, but payout ratio is only ~35%

LONGi Green Energy Technology Co., Ltd. (601012 CH)

About (7 Aug 2026)

Share price: CNY 12.93

Market capitalisation: CNY 97,723 mn (USD 14,480 mn)

Enterprise value (EV): CNY 83,135 mn (USD 12,319 mn)

Average daily volume (ADV): CNY 1,853 mn (USD 275 mn)

LTM P/B: 2x

LONGi is the world’s largest maker of solar wafers and the second largest maker of solar panels.

Cyclical inflection?

It is no secret that the solar industry is in a severe oversupply.4

The media likes to quote the International Energy Agency (IEA)’s report that “In 2024, there was sufficient manufacturing capacity to have produced more than twice as many solar PV modules as were actually deployed.”

However, the consensus often underestimates demand growth. The orange hairy lines below show this:

Source: The Economist (2024)

There are two reasons why demand growth will likely re-accelerate:

1. Higher-than-expected oil prices

2. Declining cost of battery energy storage systems (ESS)

I discussed them in detail here.

Second point: falling supply.

Cash capex of top 5 solar companies has declined from the peak in 2023.

Supply seems to be finally contracting.

LONGi’s cash capex finally fell below depreciation in 2025. In the last twelve months, the company’s cash capex is less than 50% of depreciation.

LONGi’s gross margins have been negative since 2024.

What cannot go on forever must eventually stop. Either the solar industry will collapse, or enough supply gets removed and profits restored.

The second scenario is more likely. Solar is here to stay. In many parts of the world, solar has become the cheapest source of energy.

The best opportunities in cyclical industries tend to come when the leading players slip into losses and you can see signs of contracting supply.

All that’s left is to work out the timing of the next shortage and choose the companies with strong balance sheets.

LONGi reminds me of SK Hynix in Q1’23.

As you may recall, SK Hynix’s gross margins turned negative that quarter. Sentiment turned very negative. Many (wrongly) extrapolated the losses.

The shares then went on to 30x.

Factors to focus on

1. When will demand catch up to supply?

2. Find reliable leading indicators of the solar cycle (e.g. working capital). Where are we in the solar cycle?

LKQ Corporation (LKQ US)

About (7 Aug 2026)

Share price: USD 24.86

Market capitalisation: USD 6,290 mn

Enterprise value (EV): USD 11,326 mn

Average daily volume (ADV): USD 80 mn

NTM P/E: 9x

LKQ is one of the world’s largest distributors of car parts.

While its North American segment is a leader in metal "crash parts" like doors, hoods, and fenders, LKQ’s European segment mainly sells mechanical components such as brake pads, clutches and filters.

My initial estimate suggests ~ 9% free cash flow yield on EV. This is an attractive ~ 4% premium over the US 10y Treasury bond.

Good business, temporary headwinds?

LKQ’s shares diverged from the S&P 500 starting in 2024 mainly due to a sustained decline in North American repairable claims.

In North America, car insurance premiums started increasing rapidly from 2023.

Consumers became highly sensitive to anything that might trigger another premium hike. This means drivers become increasingly hesitant to file insurance claims for minor, cosmetic, or drivable damage.

Many drivers simply choose to live with the damage or delay the repair. Fewer cars entering repair shops translates directly to lower demand for the aftermarket and recycled parts that LKQ sells.

However, this headwind seems to be easing.

The US Consumer Price Index (CPI) for motor vehicle insurance dropped by -4% YoY in June 2026, and decreased -2% MoM.5

Activists pushing for sale

In January 2026, LKQ announced its board is reviewing strategic alternatives, including a potential sale ​of the company, to enhance shareholder value.6

Since October 2025, Ananym Capital, an activist fund, has been pushing LKQ to sell its European business.

“Instead of trying to integrate 20 ERP software systems across 900 locations in 18 different countries in Europe, management should talk to potential buyers who could handle the integration and free up LKQ executives to concentrate on running its crown jewel NAB (North America) collision business.”7

On 30 July 2026, LKQ reported “Europe fell short of expectations, with results affected by the ERP implementation in Germany.”8

All the more reason to sell its European business or even the whole company.

Indeed, there are signs that the board is preparing LKQ for a sale.

In September 2025, LKQ sold its Self Service segment to Pacific Avenue Capital Partners, a PE firm. The company also initiated a process to explore the potential sale of its Specialty segment.

Factors to focus on

1. Probability and timing of recovery in North America segment

2. How much can LKQ receive from selling its European business?

   1. Polish distributers like Auto Partner SA (APR PW) and Inter Cars S.A. (CAR PW) seem to be doing very well.

      Is LKQ’s Europe problems really just due to ERP issues?

Vote for the best idea

If you want me to dig deeper into an idea, vote for it.

Coming up next

I will look deeper into CTOS Digital Berhad (CTOS MK) this week. This was the idea you voted the most interesting in my previous email.

CTOS is Malaysia’s top credit bureau. Since IPO, its shares have sold off heavily. Investors are scared off by its decelerating growth and falling margins.

However, these seem to be investments in technology and marketing to re-accelerate growth and margins.

There seem to be early signs of recovery.

Subscribe to get the analysis when I publish.

In case you missed it

Last week, I highlighted the opportunity I am seeing in Nexon, Korea’s largest video game maker responsible for MapleStory and Dungeon & Fighter.

Investors often see telcos as a safe haven. So, why did Starhub’s share price fall -75%?

I highlight a very important detail that many investors miss:

Disclaimer

This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.

I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.

I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.

At the time of publication, I do not hold any positions in 601012 CH, 030190 KS and LKQ US, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

"Buy telco shares! Safe, stable, predictable. Can’t go bankrupt."

February 2016.

Urged on by your “portfolio manager” friend, you went all in on StarHub, Singapore’s second-largest telco.

The shares have fallen almost -20% from its peak in 2015. So cheap!

Right after you bought, the share price started to decline.

Never mind, you are a conservative long-term investor. You only buy and hold.

The “portfolio manager” urges you to stay the course: “It is a necessity to accept short-term volatility in pursuit of higher returns”

August 2026.

More than 10 years have passed. You watched your shares drop more than -70%, from SGD 3.59 to SGD 1.05.

What went wrong? Aren’t telcos supposed to be safe, stable, predictable investments?

That’s what we will explore today:

1. Why do telco shares blow up?

2. How can investors avoid telco blow ups?

3. Can telcos do anything to stop the blow up?

   ---

Why do telco shares blow up?

StarHub is not alone.

Since 2021, shares in Proximus PLC (PROX BB) have collapsed -63%. Between 2015 and 2024, Telecom Italia S.p.A. (TIT IM) fell -80%.

What was the common factor?

New competiton.

In 2016, Italy’s fourth mobile network operator (MNO), Iliad Italia was founded. It launched mobile services in 2018.

Digi became Belgium’s fourth MNO after it acquired new spectrum in 2022. Its mobile plans start from as low as EUR 5 month, severely undercutting the EUR 16 plans charged by Proximus.

StarHub’s kryptonite came in the form of Circles.Life and SIMBA.

Circles.Life became Singapore’s first full-service postpaid MVNO in 2016. Being a mobile virtual network operator (MVNO), Circles.Life does not own a physical network. Instead, it leases network capacity from a MNO (M1) at wholesale rates and resells cellular plans under its own brand.

SIMBA became Singapore’s fourth MNO after winning a mobile spectrum auction in 2016. It launched services in 2020.

Just as kryptonite drains Superman’s powers and causes severe pain, SIMBA and Circles.Life drained StarHub’s pricing power and caused severe pain to shareholders.

Source: StarHub’s annual reports.

From 2025, StarHub stopped showing ARPU breakdown. It showed combined ARPU instead.

But the trend remains. Combined ARPU declined -9% in 2025.

How can investors avoid telco blow ups?

New competitors enter, telcos blow up.

That’s the rule of thumb.

But new competitors cannot simply enter as they please. They need permission from regulators.

What will drive regulators to let in new competitors?

High prices

In 2012, all three MNOs in Singapore removed their popular 12GB mobile data plan. SingTel effectively cut its customers’ data allowance to as low as 2GB. For StarHub, it went as low as 1GB.1

StarHub’s operating margins, already high among global peers, surged to new highs:

Singapore’s telco regulator must have seen this, and felt very unhappy.

In explaining its decision to let in a fourth MNO, IDA revealed a strong desire for lower consumer prices:

“IDA has observed that the entry of new players in other jurisdictions has brought about lower priced and/or more innovative mobile plans for the benefit of consumers.

For example, some jurisdictions with new MNO entry have experienced decreases in average mobile price plans by up to 40%…”2

There is indeed a lot of room to cut prices. Damodaran’s data showed, on average, global telcos earned ~12% operating profit margin (OPM).3

The same number for StarHub?

A whopping 18%!

Room for one more MNO

If more competition benefits consumers, why not have 10 MNOs?

The answer is simple.

Too much competition destroys all profits. No profits → no investment in network. → network falls apart.

So, the regulator needs to balance its desire for low consumer prices against leaving enough profits for telcos to invest.

In 2016, IDA concluded that Singapore’s 3 MNO market still has room for 1 more MNO:

On the concerns that new MNO entry will impact mobile network investments, IDA found no clear or direct correlation between new MNO entry and a fall in mobile network investments by incumbent MNOs in other jurisdictions.

IDA also notes that globally, some mobile markets have been supporting a 4-MNO structure, such as in Spain and Sweden.

Further, IDA has observed that the entry of a new MNO may also incentivise the MNOs to invest in their mobile networks to maintain their competitive advantage.4

Can telcos do anything to stop the blow up?

During its Q1’16 earnings call, management reassured investors:

“We're always prepared for competition whether it's the fourth, fifth or the current competitor.

But bear in mind that StarHub will still have more than just good service coverage, we also have the Hubbing strategy.”5

10 years later, profits collapsed -75%.

Why didn’t the Hubbing strategy stop the drubbing?

The Hubbing strategy involves bundling mobile, pay TV, broadband and fixed network services. In industry speak, this is called 'quadruple play’.

The idea sounded promising.

Customers get more value than if they paid for each service separately. They also enjoy the convenience of just one single bill.

In return, StarHub enjoys lower customer churn, higher ARPU and more cost efficiencies.

Sadly, technological advancement blunted the value proposition of the Hubbing strategy.

The arrival of Netflix and YouTube meant more and more customers are cutting their pay TV. Fixed landlines have become a relic.

More importantly, the huge savings from switching to MVNOs and SIMBA outweighed the slight inconvenience of multiple bills.

TLDR

More than anything else, regulation drives investment returns in telcos.

If the telcos are charging high prices and earning above-average returns in a two or three player market, the regulator has a huge incentive to let in a new competitor.

That’s usually how telco investors get blown up.

Coming up next

Next week, I’ll be back with 3 more interesting ideas.

I’ll then analyse the most voted idea from my last post: CTOS Digital Berhad (CTOS MK) or Samsonite Group S.A. (1910 HK).

Right now, the vote is exactly tied!

Haven’t voted yet? Check out my last post and break the tie: Yet another 3 interesting ideas.

Thanks for reading! If you found this helpful, hit the “like” button.

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Subscribe now

Disclaimer

This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.

I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.

I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.

At the time of publication, I do not hold any positions in STH SP, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

Why are you shortlisting NEXON Co., Ltd. (3659 JP)?

3 reasons:

1. Good business, temporary headwinds

2. Under-recognised growth

3. Attractive capital returns

Catalyst? Potential takeover target. There were reports of interest from private equity (PE) and/or Tencent.

I estimate ~ 11% free cash flow yield on enterprise value (EV). This is an attractive premium of ~ 7% over the South Korea 10y government bond.

Are the shares liquid enough?

4 Aug 2026

Share price: JPY 2,374

Market capitalisation: JPY 1,862 bn (USD 12 bn)

Enterprise value (EV): JPY 1,045 bn (USD 7 bn)

Average daily volume (ADV): JPY 6 bn (USD 40 mn)

NTM P/E: 17x

Ok. I am looking at the price chart now. Nexon’s share price (green) fell almost 50% from its peak in January this year.

What happened?

Investors were doubting whether Nexon can meet its 2027 revenue and operating profits targets. In March 2026, during its capital markets day, management admitted they will not hit the targets on time.

The sell-off accelerated.

Good business, temporary headwinds

Why do you see an opportunity in the sell-off?

Investors seem too fixated on the near-term operational headwinds in Dungeon & Fighter Mobile (DNF Mobile).

Nexon is South Korea’s largest video game maker. DNF is one of its three main game franchises. Together with MapleStory and FC, they contribute over 60% of revenue in Q1’26.

Chart 1: Trailing 12-Month Franchise Revenue History

Source: 2026 Q1 Nexon Presentation

During 2024, DNF revenue surged. It is now in decline. What happened?

The most significant driver behind the 2024 surge was the successful release of DNF Mobile in China in May that year.

However, DNF revenue peaked in early 2025. Content updates, specifically the New Year update in January 2025, failed to meet players’ expectations.

According to reviews on TapTap, a mobile game distribution platform in China, content production fell far behind consumption.1

Once players get the best gear in DNF Mobile, they lose motivation to play. New updates just don't come out fast enough to keep the game interesting.

What is Nexon doing about this?

In early 2025, Nexon signed a co-development agreement with Tencent.

Nexon retained control over creative content while Tencent focused on “hyperlocalisation”: adapting content specifically to Chinese tastes.

On 13 August 2026, they will relaunch DNF under “DNF Mobile 2.0” with higher level caps and new game zones. These are designed to enhance long-term progression motivation.

Do you think the fix will be successful?

I believe it is a question of ‘when’ rather than ‘if’ the fixes will succeed in drawing players back.

This is not the first time DNF revenue declined. In 2023, DNF PC revenue faced a similar decline, driven by an unexpected oversupply of in-game gold. Players started leaving the game as the prices of in-game items started to inflate.

Management started implementing fixes to get players to spend more gold, thereby reducing supply. By early 2025, the gold supply had stabilised. DNF PC revenue started recovering.

Looking at chart 1, for live service online games, the rise and fall of revenue is a feature, not a bug.

Are you sure? Another gaming analyst told me that revenue peaks soon after a game launches. It then steadily declines. Like the graph below.

Source: Owen Mahoney (2025)

Your graph is accurate, but only for hardcore offline games.

For successful live games like DNF and MapleStory, a more accurate graph looks like this:

Source: Owen Mahoney (2025)

Owen Mahoney, Nexon’s ex-CEO explains:

Live games are updated continuously.

Some updates are small fixes or tuning changes, others are major additions to the game world.

Not all of them succeed. Some introduce bugs or balance issues that temporarily harm the experience and drive players away.

In well-run games, those mistakes are identified and corrected, and the community returns.

Short-term volatility is not a sign of failure. It is the normal operating pattern of a healthy, evolving system.

He adds:

The wrong model makes analysts panic at the first dip, dump the stock, and miss the next wave. Investors with the right map see the dip for what it is: a buying opportunity.

That’s interesting. Nexon’s revenue in chart 1 does resemble the squiggly upward orange line. Good business, temporary headwinds.

Under-recognised growth

Despite DNF revenue declining -26% YoY in Q1’26, overall revenue still grew +34% YoY. ARC Raiders saved the day.

Is this the under-recognised growth you’re talking about?

Source: 2026 Q1 Nexon Presentation

Yes. Nexon released this third-person multiplayer extraction shooter game in October 2025. It was a success.

What’s more important than ARC Raiders is the creative talent that created it. After all, a game ‘factory’ is nothing more than a group of creative people making fun games.

Owen Mahoney explains:

If the key people leave, the rest usually follow, and you're left with an empty box, explaining to your board how an [acquisition] deal that looked smart last month became a management crisis this month.

It looks like Nexon scored a huge win when it acquired Embark Studios, the developer of ARC Raiders, in 2021. Patrick Söderlund, the CEO of Embark Studios, became a major shareholder and the Executive Board Chairman.

Yes, but investors seem to be ignoring this.

For many years, Nexon has been known as an Asian video game maker with limited pipeline. In 2024, Korea and China accounted for 44% and 37% of revenue, respectively. North America and Europe contributed only 10%.

With Embark Studios, Nexon can now reach into Western markets. In 2025, revenue contribution from North America and Europe jumped to 14%.

Embark Studios is preparing a significant "Frozen Trail" update for ARC Raiders in October 2026. This will introduce an expansive new map and a paid Premium Reward Pass.

The studio is also looking to launch the game in the Chinese market through a hyperlocalization partnership with Tencent Games.

Finally, Embark Studios also confirmed they have two projects already in early development.

Yet, investors seem to have not fully recognised this growth potential.

The sell-side expects revenue to grow 7% in 2026 (similar to 2025), before tapering down to +2% and +3% over the next two years.

Attractive capital returns

Why do you say capital returns look attractive?

Nexon looks like a value trap. Over the past 10 years, cash averaged ~170% of revenue.

This is changing.

In 2024, the new CEO took over and introduced a formal dividend policy of returning at least 33% of the previous year’s normalized operating income.

Dividend per share more than doubled from JPY 10 to JPY 23, then doubled again to JPY 45 in 2025. For 2026, Nexon plans to pay JPY 60 per share.

The company is also buying back more shares.

In total, for 2026, Nexon will return at least ~ 5% of its market capitalisation or ~ 8% of enterprise value. This level of capital return is more than 100% covered by its free cash flow.

If Nexon returns 100% of its free cash flow to shareholders, I estimate capital returns of ~6% of today’s market capitalisation and ~11% of enterprise value.

What makes you think 100% capital return is possible?

Nexon still has cash ~ 170% of revenue, no debt and a capital-light business.

The tone from the new management seems to be moving from “hoarding cash just in case we see an attractive acquisition” to “let’s optimise our capital structure”.

Potential takeover target

Why do you say Nexon is a potential takeover target?

The founding family explored a sale around 2019, attracting interest from Tencent and private equity (PE) firms like KKR and Hillhouse.2 However, they apparently failed to agree on price.

In June 2025, Tencent was reportedly trying to revive the deal.3 The Chinese tech company later clarified that the reports were not true.4

Even so, I expect the founding family would eventually want to sell and diversify their wealth. The founder himself passed away in 2022.5 His wife and daughters inherited his majority stake but are not involved in management.

Saudi Arabia’s Public Investment Fund (PIF) owns ~11% through a subsidiary (Ayar First Investment Company).

In 2025, PIF agreed to acquire Electronic Arts Inc. (EA US), another video game developer for USD 55 bn.6 PIF may look to acquire Nexon and merge it into EA.

Great. Go ahead and develop the full thesis for this.

Give me a sense of the competitive landscape. Compare Nexon to its peers like NC Corporation (036570 KS) and KRAFTON, Inc. (259960 KS).

I know you’ve done this, but go through more player reviews of DNF Mobile in Chinese. I want more data to support your hypothesis of temporary headwinds.

Also, try quantifying the growth opportunities for Embark Studios. Are there any good historical precedents?

Coming up next

“We're always prepared for competition whether it's the fourth, fifth or the current competitor.

But bear in mind that StarHub will still have more than just good service coverage, we also have the Hubbing strategy.” - StarHub’s earnings call (5 May 2016).7

This was how Singapore’s second largest telco allayed worries over a new competitor.

Since then, StarHub’s profits had taken a drubbing. Net profits fell almost -75%. Share price followed, falling more than -70%.

What happened? Why didn’t the Hubbing strategy stop the drubbing?

That’s what I will explore in my next analysis.

Subscribe for free to be notified immediately when I publish.

Disclaimer

This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.

I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.

I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.

At the time of publication, I do not hold any positions in 3659, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

If you want me to dig deeper into an idea, vote for it. Use the poll at the end of this email.

Later this week, I will look deeper into NEXON Co., Ltd. (3659 JP). This was the idea voted the most interesting last time.

CTOS Digital Berhad (CTOS MK)

About (31 Jul 2026)

Share price: MYR 0.71

Market capitalisation: MYR 1,604 mn (USD 393 mn)

Enterprise value (EV): MYR 1,642 mn (USD 402 mn)

Average daily volume (ADV): MYR 5 mn (USD 1 mn)

NTM P/E: 17x

CTOS is Malaysia’s top credit bureau. It sells credit reports and credit scores to businesses and individuals.

My initial estimate suggests ~ 8% free cash flow yield on enterprise value (EV), an attractive premium of ~ 4% over the Malaysia 10y government bond.

Good business, temporary headwinds?

Look at the chart above. It shows the total return from CTOS vs iShares MSCI Malaysia ETF (EWM).

Around July 2024, CTOS’ share price started diverging from EWM.

It looks like CTOS sold off because revenue growth and margins declined more than expected. Revenue growth decelerated from +34% in 2023 to +17% in 2024 and to only +7% in 2025. Operating profit margin (OPM) fell from a high of 34% in 2023 to 30% in 2024, and then to 21% in 2025.

CTOS spent more on marketing to bring back growth. Revenue growth had decelerated to +7% in 2025.

After facing a High Court lawsuit over inaccurate data in March 2024 (which CTOS subsequently won on appeal)1, the company increased technology spending.

By Q1’26, the company had completed its cloud migration. In Q2’26, revenue growth had recovered to +10% YoY. OPM had stabilised at 21%.

CTOS now targets to improve operating profit margins by 3 to 6 percentage points (ppt) by 2028.2

Capital returns?

In July 2026, CTOS announced it will sell 10% of JurisTech, an enterprise fintech company. It will return the MYR 50 mn sales proceeds to shareholders through a special dividend and share buybacks.3 This is ~ 3% of today’s market capitalisation.

It seems like there will be more capital returns.

CTOS still has 39% stake in JurisTech. The company announced plans to eventually sell this stake.

Sale?

CTOS started selling more non-core assets recently. In December 2025, it sold its stake in Experian Malaysia. Now, the company is selling its stake in JurisTech.

It looks like CTOS’ largest shareholder is preparing to sell CTOS. Creador, a private equity (PE) firm, owns ~21% of CTOS.

Creador first bought a stake in CTOS in August 2014 through its second fund, Creador II. In April 2023, Creador rolled over its stake into Creador V at MYR 1.35 per share.4

Putting two and two together, the PE firm will likely want to sell CTOS at more than MYR 1.35. Given the 10 years standard life of a PE fund, any sale will likely happen within the next 5 years.

Factors to focus on

1. Probability and timing of recovery in revenue growth and margins?

2. Any under-recognised growth potential, especially in CTOS’ international segments?

   ---

Rightmove plc (RMV LN)

About (31 Jul 2026)

Share price: GBP 4.65

Market capitalisation: GBP 3,437 mn (USD 4,632 mn)

Enterprise value (EV): GBP 3,408 mn (USD 4,593 mn)

Average daily volume (ADV): GBP 22 mn (USD 29 mn)

NTM P/E: 14x

RMV is the largest property website in the UK.

Real estate agents and developers advertise their properties on RMV’s website. It holds ~ 80% market share by page views.

My initial estimate suggests ~ 6% free cash flow yield on EV. Despite only ~1% premium over the UK 10y gilt, it might still be attractive, given its growth potential.

Under-recognised growth?

RMV shares enjoyed a rally starting in late 2024.

REA Group Limited (REA AU) offered GBP 7.81 per share. RMV rejected it. According to RMV’s board, the offer was “unattractive”.5

Today, RMV is trading at only GBP 4.65.

On 7 Nov 2025, RMV warned that a major ramp-up in AI investments would slow profit growth in 2026. The shares fell -28%.

The shares continued falling like a brick earlier this year. SaaSpocalypse.

It still remains to be seen whether enough consumers will switch to shopping for their homes through AI chatbots. If RMV fails to incorporate AI features and reach functional parity, then growth will likely stall.

Given its AI investment plans, there is a good chance the consensus is overestimating the adverse impact from AI. In any case, RMV owns proprietary data on historical sales.

Management also highlighted that strategic growth areas like Commercial Property, Rental Services, and Mortgages remain under-penetrated. They guided to 20-30% growth in these areas for 2026.

Capital returns?

RMV announced last week that it expects to return over GBP 400 mn to shareholders by 31 July 2027, including share buybacks of ~ GBP 330 mn.6

GBP 400 mn is ~ 12% of today’s market capitalisation.

Takeover?

With NTM P/E ratio near all-time low, REA may try to buy RMV again.

PE firms may be attracted too. RMV generates a lot of cash, but has no significant debt.

Factors to focus on

1. In Apr 2026, some real estate agents sued RMV. They accused RMV of charging excessive fees.7 What is the probability of an unfavourable settlement, and the potential exposure?

2. In 2023, CoStar Group, Inc. ( US) entered the UK market by acquiring RMV’s smaller rival, OnTheMarket.8 How will this change the competitive landscape?

   ---

Samsonite Group S.A. (1910 HK)

About (31 Jul 2026)

Share price: HKD 14.13

Market capitalisation: HKD 19,270 mn (USD 2,457 mn)

Enterprise value (EV): HKD 33,068 mn (USD 4,217 mn)

Average daily volume (ADV): HKD 66 mn (USD 8 mn)

NTM P/E: 10x

Samsonite is the largest luggage brand in the world.

My initial estimate suggests ~ 10% free cash flow yield on EV. This is an attractive ~ 5% premium over the US 10y Treasury bond.

Under-recognised growth?

Negative YoY revenue growth since Q2’24 has led the market to price Samsonite like a no-growth or shrinking business. However, Samsonite is not a dying business.

Samsonite’s advantage of scale and strong brand recognition will allow it to grow in line with industry (3% to 5% p.a.).

The industry is competitive. Not much product differentiation can be achieved because components are quite standard and mostly sourced from original equipment manufacturers (OEMs). Innovation can be copied. Therefore, the most important moats are volume and brand.

Samsonite has both.

Good business, temporary headwinds?

Negative growth is likely cyclical rather than structural.

Between 2021 and 2023, Samsonite grew its revenue strongly because COVID-19 lockdowns ended and travel resumed. In 2024, revenue growth decelerated and turned negative. Having bought new luggage after lockdowns, people no longer needed that many new bags.

According to a former employee, the average luggage replacement cycle is 3 to 4 years. This meant revenue growth should inflect in 2026/2027, driven by the replacement of luggage bought in 2021/2022.

Indeed, YoY revenue growth has just turned positive. +2% in Q4’25 and +4% in Q1’26.

Hidden asset?

TUMI’s growth is obscured by other brands.

TUMI is Samsonite’s premium brand. Since 2017, group revenue grew 0.3% p.a. but TUMI grew 3.0% p.a.

First, TUMI’s premium positioning shields it from fierce competition. The only competitor of significance in the premium segment is Rimowa. Both are similar in size in terms of revenue. TUMI avoids head-on competition by positioning itself slightly below Rimowa.

Second, TUMI is growing in Asia but looks underpenetrated. TUMI earns only 28% of its revenue from Asia, compared to 60% in North America.

Takeover?

In March 2024, Bloomberg reported Samsonite received early indications of a potential takeover from multiple PE firms like Carlyle, CVC, KKR and DCP.9

The deal did not materialise, apparently because the price demanded was too high for the PE firms. Samsonite decided to proceed with a dual listing in the US instead.

Today, Samsonite still hasn’t achieved dual listing. Such a long time lag makes me wonder whether they are delaying the dual listing to consider another takeover interest.

There seems to be a motivation to sell.

The ex-chairman of the board is also the single largest individual shareholder. Timothy Charles Parker is already more than 70 years old. In his previous roles, he has extensive ties with PE firms, especially CVC.

Factors to focus on

1. Probability and timing of recovery

2. TUMI’s growth potential in Asia

3. Inventory days ~ 5.6 months, near historical median. Is this an issue? Will this weigh on future margins?

Vote for the best idea

If you want me to dig deeper into an idea, vote for it.

Coming up next

I will look deeper into NEXON Co., Ltd. (3659 JP) this week. This was the idea you voted the most interesting in my previous email.

Nexon looked like a value trap. Cash averaged ~170% of revenue over the past 10 years. But this is changing. The new CEO is returning more capital to shareholders.

In total, for 2026, Nexon will return ~ 4% of its market capitalisation or ~ 8% of enterprise value.

Subscribe to get the analysis when I publish.

In case you missed it

Last week, I explained why I shortlisted ENN Energy Holdings Limited (2688 HK). The major shareholder shelved plans to privatise ENN Energy because of regulatory delays. Offer was HKD 80 per share. The shares now trade at ~ HKD 47.

Evergrande’s collapse was actually predictable. No need for site visits. Just read the annual reports. In my previous post, I highlighted the red flags in Evergrande’s annual reports: aggressive capitalisation of interest expense and rising payable days.

Disclaimer

This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.

I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.

I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.

At the time of publication, I am long 1910. I do not hold any positions in CTOS and RMV, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

This was in October 2020.

Just over a year later, Evergrande defaulted. Its founder later pleaded guilty to fraud and has been detained ever since.

In hindsight, Evergrande’s default looked inevitable.

But why did the lenders and analysts fail to see this? If we were in their shoes, could we have spotted the warning signs?

That’s what we will do today.

31 March 2020. You are an equity analyst. Evergrande just published their 2019 annual report. Your portfolio manager (PM) wants your recommendation. Should the fund sell everything at HKD 13?

Evergrande’s share price (source: investing.com)

You start flipping through the annual report.

Aggressive capitalisation of interest expense

Property developers usually borrow money to build apartments. During the construction, they incur interest costs but are not yet earning revenue.2

To remove this timing mismatch between interest costs and revenue, property developers are allowed to capitalise the interest costs. Instead of recognising the interest costs as an immediate expense, they recognise them as an asset, usually as part of properties under development.

When the developers eventually sell the apartments, the capitalised interest costs will be recognised as cost of goods sold expense, thereby matching the interest expense with revenue.

Evergrande knew this. It pushed this to the extreme:

Source: Companies’ annual reports, Angsana Anderson

In 2019, China Vanke and Poly Property capitalised only ~50% of their interest costs, on average. Evergrande capitalised 74%!

If Evergrande had capitalised only 50% of its interest costs, this would have wiped out its net profits in 2019.

Why is Evergrande delaying payments to suppliers?

We’ve talked about how when demand starts weakening, customers start delaying payments.

The opposite is also true:

When demand starts weakening, companies start delaying payments.

Source: Companies’ annual reports, Angsana Anderson

This chart highlights 2 important points.

The obvious point is the rising days payables. In 2016, Evergrande took ~ 439 days to pay its suppliers. By 2019, this has stretched into ~ 577 days. Whenever a company starts delaying payments, it’s a strong sign of weakening demand or cash flow issues or both.

Second point, compared to its peers, Evergrande is taking much longer to pay suppliers.

Trade payables are amounts owed to suppliers in the normal course of business. Whenever the time taken to pay trade payables exceeds the industry norm, you should start wondering whether these are actually loans from suppliers.

If we classified Evergrande’s excess payables as loans, its total debt in 2019 would have jumped more than 50%.

The collapse

Evergrande’s shares dropped like a brick during 2021.

Credit downgrades, missed payments on wealth management products, protests, defaults, fire sale, the end.

In March 2024, after shareholders were all but wiped out, the China Securities Regulatory Commission (CSRC) accused the founder of fraud.

Hui Ka Yan allegedly instructed his staff to “falsely inflate” revenue and profits. The inflated figures accounted for half of total revenue in 2019, and 79% in 2020, according to the regulator.3

Evergrande founder Hui Ka Yan (source: SCMP, 2023)

You patted yourself on the back. Nobody could have known the problems ran so deep, but you spotted the red flags.

Spotting the red flags is easy, the hardest part is…

…convincing your PM to sell everything, especially when they have fallen in love with the stock.

If you make a strong case to sell, but the share price jumps before everything collapse, your head will be on the chopping board. That’s what Evergrande’s shares did.

Maybe it’s safer to just tell the PM what they want to hear.

Little wonder the “lenders and analysts” said the risk of default is relatively small for Evergrande!

Coming up next

Next week, I’ll be back with 3 more interesting ideas.

I’ll then analyse NEXON Co., Ltd. (3659 JP) in detail. That’s the idea you voted most interesting last week.

Thanks for reading! If you found this helpful, hit the “like” button.

If you’re not already a subscriber, sign up for weekly analysis on global SMID equities.

Subscribe now

Disclaimer

This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.

I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.

I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.

At the time of publication, I do not hold any positions in 3333 HK, 2202 HK, 119 HK, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

The parent, ENN Natural Gas, tried to privatise ENN Energy. They offered HKD 80 per share.

But the privatisation failed last month. Investors dumped so much shares. Today, the shares trade at only HKD 46.

Why did it fail? Will the parent try again? Why do you think the shares are now attractive?

The privatisation failed because the Chinese regulators did not give clearance on time.

Even though they did not explain why, I believe there are two main reasons:

1. Complex privatisation structure

2. Regulatory concerns

The privatisation failed

Ok. Start with the structure of the privatisation.

ENN Natural Gas Co., Ltd. (600803 CH) owns ~35% of ENN Energy.

It offered HKD 80 per share for the remaining 65%:

• HKD 24.50 cash

• 2.9427 newly issued H-shares of ENN Natural Gas

ENN Natural Gas does not have H-shares yet. To facilitate the equity portion of its offer, ENN Natural Gas concurrently applied for a listing on the Hong Kong Stock Exchange (HKEX).

That’s what makes this privatisation complex.

But this is not the main reason why the privatisation failed?

That’s what I believe.

Haier used the same structure to privatise its Hong Kong-listed subsidiary in 2020. No issues.

What’s the problem then?

The State Administration for Market Regulation (SAMR) is the competition watchdog in China.

I believe the SAMR is reluctant to approve the privatisation because it would create a single, highly integrated entity with strong market power across upstream LNG procurement, midstream terminal storage, and downstream pipeline distribution.

The SAMR has been stepping up its scrutiny over vertical integration.

In 2025, it published a prohibition decision on a vertical acquisition in the pharmaceutical industry. The SAMR believed the deal created a vertically integrated and dominant business that was able to foreclose competition in the downstream market.1

Does that mean there is no chance at all for another deal?

There is still a chance.

The desire to privatise is still there. ENN Natural Gas said that even though it dropped the privatisation plan, it still intends to gradually increase its stake in ENN Energy through on-market purchases.

To allay the regulators’ concern, ENN Natural Gas can offer remedies like divesting certain assets or committing to specific price and service levels.

Under Hong Kong's Takeovers Code, ENN Natural Gas is barred from making another formal privatisation offer for ENN Energy for 12 months from Jun 2026.

This puts the earliest possible re-bid around Jun 2027.

Shares sold off so much. Looks attractive now

Interesting enough. Even without privatisation, the shares now look attractive. Why do you say this?

After the privatisation failed, the shares dropped almost -45%. Investors betting on the privatisation were dumping the shares.

But they are ignoring the attractive business fundamentals:

1. Under-recognised growth

2. Capital returns

Before you begin, are the shares liquid enough? Give me the basic stats first.

29 Jul 2026

Share price: HKD 46.70

Market capitalisation: HKD 52 bn (USD 7 bn)

Enterprise value (EV): HKD 73 bn (USD 9 bn)

Average daily volume (ADV): HKD 226 mn (USD 29 mn)

NTM P/E: 7x

Under-recognised growth

Ok. What do you mean by under-recognised growth?

ENN Energy buys gas from domestic suppliers like CNOOC, lays down gas pipelines and sells the gas to both commercial & industrial (C&I) and residential customers.

Residential customers make up only ~22% of retail sales volume but contribute significantly to high-margin construction and installation fees.

Since the property crisis started around 2021, these lucrative fees have fallen almost -60%. Fewer houses built meant fewer connection fees.

That’s one of the main reasons why many investors believe ENN Energy is a dying business. Over the next 3 years, sell-side consensus forecasts only low-single-digit EPS growth.

They are, however, ignoring the growth potential in cross-selling.

During the same period, ENN Energy doubled its revenue from cross-selling gas alarms, smoke sensors and kitchen appliances under its own brand, Gratle (格瑞泰). The company calls this segment, “Smart Home”.

Despite the tremendous growth, this opportunity remains under-penetrated. ~63% of new customers buy from Smart Home while the same number for existing customers is only ~4%.

Sounds interesting. But I can’t shake off my concern. Isn’t natural gas consumption declining?

Residential and commercial natural gas consumption in China has grown every year since 2014, as more customers switched from coal to natural gas for home heating.

In the electric power sector, additional economic activity and new natural gas-fired capacity increased consumption.2

Natural gas is generally cheaper for heating, cooking, etc.

In electricity production, natural gas is cleaner than coal, and allows power plants to ramp up and down quickly. That’s an important advantage.

How about the future?

China’s gas consumption is expected to grow by ~6% p.a. through 2030, mainly driven by the same factors.

More than 10 years ago, only ~49% of connectable households were connected to ENN Energy’s gas pipes. Today, that’s around 67%. Even so, there’s a lot of room to grow. The penetration rate in mature areas can reach up to 90%.

The housing market is cyclical. When the cycle eventually turns and more homes are built, ENN Energy will benefit from higher connection fees.

That’s the cherry on top of the cake.

Interesting. How about margins? Operating profit margins (OPM) declined from 11% in 2020 to 7% in 2025.

Two main reasons:

1. Higher gas prices squeezed margins.

2. Construction and installation fees, which carry higher margins, declined from 9% of total revenue to only 3%.

I will be surprised if OPM continues to decline.

First, the regulator (NDRC) has been pushing a price linkage mechanism that allows city gas distributors to pass upstream cost increases down to end-users.

As of Dec 2025, ENN achieved a ~72% completion rate for residential price adjustments.

Second, the Smart Home segment has become material. In 2025, it contributed 4% to group revenue, higher than the 3% from construction and installation fees. This segment carries 67% gross profit margin, higher than the 49% offered by construction and installation fees.

Attractive capital returns

What’s the cash coming out of the business?

Since 2019, ENN Energy increased its dividends every year.

It committed to a dividend payout ratio of at least 50% through 2028. This seems sustainable. Dividends are covered by its free cash flow. Financial leverage is reasonable (BBB+ from Fitch).

Dividend yield is now ~7%. Attractive, given 1.7% China 10y government bond yield.

Great. Go ahead to develop the full thesis for this.

Give me a sense of the competitive landscape. Compare ENN Energy to its peers like China Gas Holdings Ltd (384 HK) and China Resources Gas Group Ltd (1193 HK).

Help me understand the regulatory landscape better. The key factor in utility companies is regulation. If regulators are unhappy with their price and service level, they can allow more new entrants. That’s how a lot of utility companies get blown out of the water.

That’s interesting. Have you seen something like that before?

In Singapore, the regulator wanted lower prices for customers. They allowed M1 and then StarHub to enter and break Singtel’s monopoly. Still not satisfied, the regulator allowed a fourth operator, SIMBA to enter in 2016.

Good for customers. Mobile plans in Singapore are now among the cheapest in the world.

Very bad for shareholders. Starhub’s share price is now down almost -75% from its peak in 2015.

Very fascinating story. But that’s for another time.

Coming up next

In 2019, China Evergrande was flying high. Less than 5 years later, it wiped out all shareholders.

Warning signs hidden in its financial statements. What were they? How can we look for these warning signs in other industries?

That’s what I will explore in my next analysis.

Subscribe for free to be notified immediately when I publish.

Disclaimer

This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.

I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.

I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.

At the time of publication, I do not hold any positions in 2688, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

Vote for the most interesting idea. Use the poll at the end of this email. That may be the next idea I look at in detail.

Later this week, I will look deeper into ENN Energy Holdings Limited (2688 HK). This was the idea voted the most interesting last time.

NEXON Co., Ltd. (3659 JP)

About (24 Jul 2026)

Share price: JPY 2,278

Market capitalisation: JPY 1,786 bn (USD 10,901 mn)

Enterprise value (EV): JPY 970 bn (USD 5,919 mn)

Average daily volume (ADV): JPY 6 bn (USD 34 mn)

NTM P/E: 16x

Nexon is South Korea’s largest video game developer, listed in Tokyo.

Its portfolio includes MapleStory and Dungeon & Fighter (DNF).

My initial estimate suggests ~ 13% free cash flow yield on EV, an attractive premium of ~ 9% over the South Korea 10y government bond.

Under-recognised growth?

The shares sold off recently mainly over disappointing performance at DNF mobile.

In Q1’26, DNF mobile revenue declined YoY. Nexon is fixing the retention issues but expects the decline to continue into Q2’26.

DNF mobile’s short-term hiccup is overshadowing Nexon’s growth potential. In Q1’26, North American revenue surged 310% YoY. This was mainly driven by ARC Raiders released by Embark Studios, its Swedish subsidiary.

This is an important breakthrough.

Historically, Nexon relied heavily on East Asia and mobile gaming. However, ARC Raiders demonstrated a new ability to penetrate the big Western PC/console market.

Capital returns?

Nexon looked like a value trap. Cash averaged ~170% of revenue over the past 10 years.

But this is about to change.

In 2024, the new CEO took over and introduced a formal dividend policy of returning at least 33% of the previous year’s normalized operating income.

Dividend per share more than doubled from JPY 10 to JPY 23, then doubled again to JPY 45 in 2025. For 2026, Nexon plans to pay JPY 60 per share.

The company is also buying back more shares.

In total, for 2026, Nexon will return ~ 4% of its market capitalisation or ~ 8% of enterprise value.

This is likely sustainable because the company still has cash ~ 170% of revenue, no debt and a capital-light business.

Takeover?

The founding family explored a sale around 2019, attracting interest from Tencent and private equity (PE) firms like KKR and Hillhouse. However, they apparently failed to agree on price.1

In Jun 2025, Tencent was reportedly trying to revive the deal.2

I expect the founding family would eventually want to sell and diversify their wealth. The founder himself passed away in 2022. His wife and daughters inherited his majority stake but are not involved in management.

Saudi Arabia’s Public Investment Fund (PIF) owns ~11% through a subsidiary (Ayar First Investment Company). In 2025, PIF agreed to acquire Electronic Arts Inc. (EA US), another video game developer.3

Factors to focus on

1. Probability of takeover and timing? Any potential regulatory issues?

2. More details on the growth potential from Embark Studios

3. Probability and timing of recovery in DNF mobile revenue

YouGov plc (YOU LN)

About (24 Jul 2026)

Share price: GBP 2.41

Market capitalisation: GBP 282 mn (USD 376 mn)

Enterprise value (EV): GBP 459 mn (USD 612 mn)

Average daily volume (ADV): GBP 2 mn (USD 2 mn)

NTM P/E: 9x

YOU sells proprietary market research and data analytics.

Its flagship product is the YouGov BrandIndex. This tracks daily brand health based on responses from over 30 million panel members across 55+ markets globally.

YOU also offers customised research.

Anthropic commissioned the company to survey 50,000 Americans, spanning every state, to understand what people think about AI, how it should be built, how it should be used, and what they are worried about. YOU’s research was used to inform Anthropic’s first Super Bowl campaign and make decisions on incorporating advertising into their tools.

Good business, temporary headwinds?

The shares sold off this year.

The sell-off was mainly driven by AI fears and a Mar 2026 profit warning tied to costly investments in its Shopper division.

It seems to me that AI is not a significant threat to YOU. YOU is in the business of collecting data from the public, and processing and selling these proprietary data.

The Shopper division recruits households across Europe to record their everyday shopping habits and sells that data to manufacturers and retailers.

In H1’26, Shopper’s adjusted operating profit collapsed from GBP 14 mn to GBP 7 mn. The company trimmed its 2026 adjusted operating profit guidance to GBP 52 mn - GBP 56 mn from GBP 61 mn.

This is mainly because of a substantial GBP 6 mn incremental investment in Shopper to introduce semi-passive/passive data collection and upgrade European panels.

During the Mar 2026 earnings call, management reiterated their confidence in Shopper and that the headwinds are only temporary.

They spent GBP 272 mn to buy Shopper in 2024. Today, the entire company is trading at only GBP 282 mn. Because of this severe undervaluation, shareholders are urging them to unlock the hidden value by selling Shopper.

This is what the Board is exploring.

Capital returns?

YOU may increase capital returns.

In Mar 2026, the Board announced, “Given dislocation between our confidence in YouGov’s intrinsic value and the current market valuation, the Board expects to launch a share buyback programme in place of the annual dividend.”4

YOU is also refinancing its bank facilities to provide greater flexibility, including to support the buyback.

If the company decides to sell Shopper, there is a good chance of higher capital returns too.

Activist pushing for sale

Gatemore, an activist investor, is pushing the Board to sell the company.

“We believe that YouGov presents a compelling opportunity for a financial sponsor or a strategic buyer. With the right management team and strategy, an acquirer could pay a takeover price in excess of GBP 7.00 per share”5

Gatemore first disclosed its ~1% stake in Nov 2024. Since then, Gatemore has increased its stake to just under 2.6%.6

There are increasing signs the Board is taking Gatemore’s proposals seriously.

Besides the share buyback, the Board has reduced the number of non-executive directors down to 4.

“I also want the Board with more of a private equity mindset” said newly appointed Chairman, Ian Griffiths. He was previously a senior advisor to Bain Capital, a PE firm.

Sky News recently reported that Wayne Levings, a former boss of market research firm Kantar’s operations in the Americas, has been shortlisted to take over from YOU’s co-founder and interim CEO, Stephan Shakespeare.7

Wayne helped lead Kantar through its spin-out from parent company WPP and its sale to Bain Capital. He oversaw the corporate transaction, large-scale post-merger integrations, and organizational redesigns.

Factors to focus on

1. More details on the incremental investment in Shopper of GBP 6 mn. What is the likelihood of a favourable return on investment?

2. Probability and timing in a recovery of the Shopper division?

3. More data on any potential threat from AI?

SISB Public Company Limited (SISB TB)

About (24 Jul 2026)

Share price: THB 9.65

Market capitalisation: THB 9,071 mn (USD 269 mn)

Enterprise value (EV): THB 7,908 mn (USD 235 mn)

Average daily volume (ADV): THB 29 mn (USD 1 mn)

NTM P/E: 10x

In Apr 2026, I published my thesis - SISB: Why I see an opportunity in Thailand’s largest international school

The share price is now lower by ~7%. But nothing has changed in my thesis.

Under-recognised growth. Because of Thailand’s declining fertility rate, the consensus seems to be expecting flat or declining student numbers.

But there is a good chance international school enrollment will grow. As parents have fewer children, they spend more per child. This means an increasing population of international school students.

Capital returns. SISB will likely increase capital returns as capex declines. Historically, capital returns were constrained because SISB was building out multiple new campuses within a short time.

SISB’s campus development plan suggests the rapid and intense build-up phase is likely over. Reflecting this, dividends nearly doubled in 2024, with the payout ratio rising from 23% in 2023 to 33% in 2024.

SISB increased its dividends again in 2025. Dividends rose by +36%, corresponding to a higher dividend payout ratio of 41%.

Vote for the best idea

Vote for the most interesting idea. That may be the next idea I analyse in detail.

Coming up next

I will look deeper into ENN Energy Holdings Limited (2688 HK) this week. This was the idea you voted the most interesting in my previous email.

Last month, the major shareholder shelved plans to privatise ENN Energy because of regulatory delays. Offer was HKD 80 per share. The shares now trade at ~ HKD 42.

The shareholder can try privatisation again from Jun 2027 onwards.

Subscribe to get the analysis.

In case you missed it

Last week, I explained why I shortlisted Pets at Home Group Plc (PETS LN).

PETS is the UK’s top pet retailer and vet operator. The potential long thesis is: Hidden asset; under-recognised growth; good business, temporary headwinds.

When demand starts weakening, customers start delaying payments. In my previous post, I showed how we can use TSMC’s receivables aging to catch inflection points in AI spending.

Disclaimer

This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.

I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.

I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.

At the time of publication, I am long SISB and YOU. I do not hold any positions in 3659, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

It’s that time of the year. Fund letters are pouring out.

I agree we are in somewhat of a bubble territory. A student in Seoul used a 500% margin loan and turned USD 15,000 to USD 200,000. Then he lost it all. “I couldn’t breathe”1

But regular readers will know that the semiconductor cycle can be understood.

Last month, I showed how we can use unit prices, costs and capex of memory chips to roughly predict shortages and gluts.

Last week, I introduced the “raw spread”. This is the difference between the growth of raw materials and finished goods. When raw materials grow faster than finished goods, it signals strong demand to come.

Are there any other publicly available leading indicators?

Yes.

Aging of trade receivables

In other words, how many customers are paying on time? Most companies disclose this in the footnotes of their financial statements.2

The basic principle is:

When demand starts weakening, customers start delaying payments.

Let’s test this out on the previous downturn.

How to foresee TSMC’s revenue drop in 2023

2022 was a great year for TSMC. Revenue growth hit a record high of 43%.

But if you had dug into their footnotes, you could see early signs of demand weakening. Customers were starting to delay payments. The percentage of customers who were paying on time dropped from 97% to 89%.

True enough, revenue declined -5% in the following year:

Source: TSMC, Angsana Anderson estimates

I created this chart using TSMC’s annual financial statements (20-F).

For those who wish to create a higher frequency indicator, good news. TSMC also discloses its receivables aging analysis in their quarterly financial statements. I’ll leave the fun of extracting the data to you (or your LLM).

Coming up next!

Next week, I’ll be back with 3 more interesting ideas.

I’ll then analyse ENN Energy Holdings Limited (2688 HK) in detail. That’s the idea voted most interesting last week.

Thanks for reading! If you found this helpful, hit the “like” button.

If you’re not already a subscriber, sign up for weekly analysis on global SMID equities, including semiconductors.

Subscribe now

Disclaimer

This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.

I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.

I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.

At the time of publication, I do not hold any positions in TSM US, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

Last week, you highlighted a potential opportunity in PETS.

Do you have any updates? Make it quick.

I will shortlist PETS as a long.

PETS was a COVID darling. When the world reopened, the shares crashed. Investors wrote it off as a busted COVID play. Specifically, the bears point to decelerating growth, regulatory threats, abrupt CEO departure and slashed dividends.

However, the market is probably over-reacting.

Headline numbers are obscuring the valuable vets business. The regulator could not find conclusive evidence that PETS charges significantly higher prices.

The previous CEO suddenly left after consecutive quarters of like-for-like retail revenue decline. The board appointed a new CEO with a strong track record in retail.

Finally, after feedback from investors, the Board rebased the dividend payout ratio to 50%.

The cash savings are used to launch a new share buyback. This makes sense, especially with the shares having sold off to a more attractive valuation.

Essentially, the potential thesis is:

1. Hidden asset

2. Under-recognised growth

3. Good business, temporary headwinds

My initial estimate suggests ~ 9% free cash flow yield on EV, which is an attractive ~4% premium over UK 10y gilt yield.

Looks interesting. Liquid enough?

Share price: GBP 1.99

Market capitalisation: GBP 871 mn (USD 1,166 mn)

Enterprise value (EV): GBP 1,229 mn (USD 1,644 mn)

Average daily volume (ADV): GBP 3 mn (USD 4 mn)

NTM P/E: 12x

PETS’ financial year ends in Mar. Unless stated otherwise, all time references will follow its financial year. For example, Q4’26 refers to Jan 2026 – Mar 2026.

What does PETS sell?

The retail segment sells pet food and accessories. Pet food makes up ~62% of total retail revenue. Accessories make up another 34% but carry higher margins.

The company sells through a network of ~ 460 stores. It also sells online.

The Vet Group segment looks small. Can we ignore it?

Even though this segment contributes only ~12% of revenue, it accounts for ~80% of operating profit.

The Vet Group segment provides support and administrative services to ~407 vet practices in return for a fee. The vets own these vet practices and retain clinical and operational freedom. PETS provides financial, marketing, supply chain support.

Without PETS, new vets will struggle to fund start-up costs and attract clients. They will also have to deal with cumbersome administrative tasks like compliance and accounting.

What does the competitive landscape look like?

Here’s what Gemini Notebook gathered:

Ok. You said there’s a hidden asset. Headline numbers are obscuring the valuable vets business.

What do you mean by this?

If you look at a screener, PETS look like a dying business. Revenue declined -1% in FY2026. Operating profit plunged -25% YoY.

However, these headline numbers are obscuring the growth in the Vets Group segment.

In FY2026, Vets Group grew revenue by +1% YoY and operating profit by +9% YoY.

+1% YoY revenue growth doesn’t look that fantastic either.

Growth is actually stronger. Like-for-like revenue growth at the Vets Group segment was +3%.

Why did the segment report only +1% revenue growth?

That’s because during the year, PETS converted some company-owned vet practices to vet-owned practices. Instead of recognising all of the sales from that vet practice, PETS now only recognises the fees it charges to those vet practices.

That sounds reasonable enough.

So, group operating profit fell -25% YoY. But operating profit at the Vets Group segment actually grew +9% YoY. This means the Retail segment must have collapsed?

Yes, Retail operating profit fell -49% YoY.

But there are signs that this is a temporary headwind and that the share price today has not priced in a recovery. We’ll get back to this later in our last point: (c) good business, temporary headwinds.

Since we’re on the Vets Group segment now, I want to discuss the other reason why investors are overlooking PETS.

You’re talking about the Competition and Markets Authority (CMA)’s investigation of the UK veterinary sector?

Yes. The CMA, UK’s competition watchdog, launched an investigation in 2023.1

They cited soaring costs. Between 2016 and 2023, average prices for veterinary services surged by 63%. This was significantly faster than the general rate of inflation. The CMA also found that Large Veterinary Groups (LVGs) tended to charge significantly higher prices than independent practices.2

That’s terrible. Let’s just pass on PETS. We don’t want businesses facing price controls in our portfolio.

Wait. I’m not even done yet.

The CMA is only capping the price of written prescriptions. This is not a disaster. The price caps on prescription fees are at levels at which a substantial proportion of vet practices in the market, including both independent businesses and LVGs, already choose to set their prices.3

PETS may even benefit from the remedies that the CMA is proposing.

What do you mean?

While the CMA found that five major LVGs charged average prices 18.3% higher than independents, it excluded PETS from this finding. There was no conclusive evidence that prices at PETS are higher.

PETS’ own analysis showed that when weighted by market-wide expenditure shares, its practices appeared cheaper than independent practices.4

CMA wants to improve price transparency. It will require all vet practices to publish clear, standard price lists.

By making it easier for customers to compare prices, these price lists should drive more customers to the cheaper prices at PETS.

Ok. That’s a relief.

It gets even better.

The CMA reported that while the other LVGs had significantly lower net satisfaction scores, the competition watchdog found that customer satisfaction at PETS was similar to independents.5

The CMA’s finding that after a vet practice was acquired, average prices typically increase 9% within four years.

This did not apply to PETS. The company is the only LVG to have grown organically via greenfield sites rather than through acquisitions. In fact, between 2014 and 2024, ~33% of all openings were established by PETS.6

That’s even better!

How about under-recognised growth?

The consensus is estimating low single-digit revenue growth over the next 5 years. I believe revenue growth will likely exceed that.

During COVID-19 lockdowns, people bought more pets. Look at the spike in the population of cats and dogs between 2020 and 2023. Let’s call this cohort “COVID-19 pet boomers”.

Source: pdsa (2025)

Veterinary expenses for a dog follow a distinct U-shaped trajectory over their 10- to 15-year lifespan.

During the puppy stage (2021), owners typically face a front-loaded spike in vet expenses for initial wellness visits, vaccination series, and sterilization procedures.

Expenses then stabilize at a much lower level throughout the healthy adult years (2022 to 2027). Not much vet expenses except for routine check-ups, baseline dental maintenance, and preventative parasite care.

However, as dogs cross into the senior stage (typically around 7 years of age, 2028 up to 2035), veterinary costs surge exponentially due to the onset of chronic conditions like arthritis or diabetes.

The dynamic is similar for cats.

The unprecedented COVID-19 pet boomers will drive a massive wave of high-margin geriatric veterinary spending as they reach their senior years later this decade.

That’s interesting.

Not only that, PETS is also transitioning from merely earning commissions through third-party insurance referrals (historically via Petplan) to launching its own proprietary, PETS-branded insurance.

The Financial Conduct Authority (FCA) has approved PETS. The service is on track to launch in calendar 2026.

PETS believe over time the insurance business can contribute ~10% of group profits.7

Great. But all this doesn’t matter if the Retail segment continues falling, right? What makes you think the headwinds are temporary?

Even though Retail revenue declined -1.0% in FY2026, it has returned to growth in Q4’26 (+2.2%).

Retail revenue started its consecutive declines in Q3’25. By Q2’26, the previous CEO departed. The board launched a Retail Turnaround Plan (RTP) in Q3’26. In that same quarter, they appointed a new CEO with strong retail experience. He took over in Mar 2026.

By Q4’26, Retail revenue has returned to growth (+2.2%).

You also said something about a takeover catalyst.

PETS has seen recurring but unconfirmed takeover speculation, most notably in Feb 2025 when rumors surfaced of a private equity bid from BC Partners, though the PE firm later denied involvement.8

The company’s history as a repeated PE buyout target, Bridgepoint (2004), then KKR (2010), keeps the market primed for speculation, especially now that its share price is depressed.

That sounds promising.

Go ahead and develop the thesis. Focus on collecting more evidence that the retail headwinds are temporary, and what’s the timing of the recovery.

Coming up next

Last week, we looked at how the “raw spread”, the difference in the growth of raw materials and finished goods, can help us understand the semiconductor cycle.

Can we also get a glimpse into the cycle through accounts receivable? Specifically, the aging of receivables?

That’s what I will explore in my next post.

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Disclaimer

This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.

I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.

I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.

At the time of publication, I do not hold any positions in PETS, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

I shortlisted PYPL last month at USD 42, but I was still working on my thesis. Sad!

In any case, I found another 3 interesting ideas with a similar setup.

As usual, let me know which idea looks the most interesting. That may be the next idea I analyse in detail. You can vote using the poll at the end of this email.

GlobalData Plc (DATA LN)

About (17 Jul 2026)

Share price: GBP 0.74

Market capitalisation: GBP 535 mn (USD 721 mn)

Enterprise value (EV): GBP 697 mn (USD 939 mn)

Average daily volume (ADV): GBP 1 mn (USD 2 mn)

NTM P/E: 10x

DATA sells proprietary data mainly through subscription plans.

As an example, healthcare clients subscribe to access its daily-updated database tracking over 190,000 drugs, detailing their exact stages from early preclinical development through to the regulatory approval process.

My initial estimate suggests ~ 6% free cash flow yield on EV, a premium of ~ 1% over UK 10y gilt.

This may be attractive given its growth potential. DATA is expected to grow its EPS by +6% p.a. over the next 2 years.

Good business, temporary headwinds?

Decelerating underlying organic growth. After peaking at +10% in 2022, underlying organic growth decelerated to +1% in 2025. This caused DATA’s share price to fall back to pre-COVID levels.

According to management, DATA’s organic growth deceleration stems from a combination of macroeconomic headwinds and operational hiccups.

Weaker macroeconomic environment tightened enterprise budgets, lengthened sales cycles and stalled upselling efforts. At the same time, the integration of multiple recent acquisitions was slower than expected, diverting resources from organic growth.

Headwinds seem temporary. However, there are some signs that these headwinds are temporary, and DATA is still a good business.

Unearned revenue grew +3% YoY in 2025. In H1’26, value renewal rate grew slightly to ~89%, up from 88% in 2025.

Hidden asset?

Healthcare division > market capitalisation. In mid-2024, private equity firm Inflexion bought a 40% minority stake in DATA’s Healthcare division for GBP 434 mn. This deal valued that single division at ~ GBP 1 bn.2

DATA’s 60% retained stake in that unit is theoretically worth ~ GBP 650 mn. Yet, the entire company’s current market cap sits at only GBP 535 mn today.

In its latest trading update, DATA stated “The Board believes that the ‘sum-of-the-parts’ value of the Group’s portfolio of products and services has the potential to be much greater than the Group’s current market capitalisation.”

This suggests potential spin-off or sale to unlock the value hidden in the Healthcare division.3

Capital return?

In 2025, DATA returned GBP 123 mn to shareholders, mainly through buybacks.

So far in 2026, it has announced ~ GBP 45 mn of capital returns. This is ~ 8.4% of today’s market capitalisation.

Takeover?

Major shareholder/CEO may be looking to sell at a better price. In Apr 2025, private equity firms (PE) KKR and ICG made separate takeover approaches.

Bloomberg reported that any deal could value DATA “well above $2 bn” (~ GBP 1.5 bn).4 This is more than twice today’s enterprise value (GBP 700 mn).

The takeover talks collapsed. I suspect the founder/major shareholder/CEO Mike Danson decided he could get a better price if DATA completes its three-year growth transformation plan.

CEO Danson made his name by founding Datamonitor in 1990, selling it to Informa plc (INF LN) for ~ GBP 500 mn before buying back divisions for just GBP 25 mn.

In any case, the takeover talks signal that CEO Mike Danson may be looking to sell. At 63 years old, he is near retirement age. There seems to be no clear successor.

New CFO brings experience in selling to PE. Perhaps the strongest hint is the new CFO. Robert Kingston was the CFO of Keywords Studio, an AIM-listed video game services provider that was acquired by EQT AB, another PE firm.

Robert will join DATA in Sep 2026.5

Factors to focus on

1. What is the probability and timing of a recovery in underlying organic growth?

2. Threat from AI seems low. DATA mainly sells proprietary data. Gather more evidence on this.

ENN Energy Holdings Limited (2688 HK)

About (17 Jul 2026)

Share price: HKD 42.02

Market capitalisation: HKD 46,720 mn (USD 5,959 mn)

Enterprise value (EV): HKD 67,580 mn (USD 8,620 mn)

Average daily volume (ADV): HKD 198 mn (USD 25 mn)

NTM P/E: 6x

ENN Energy is one of the largest private distributors of natural gas in mainland China. It sells to both residential and commercial & industrial (C&I) customers.

My initial estimate suggests ~ 7% free cash flow yield on EV, which is an attractive ~5% premium over China 10y government bond yield.

Good business, temporary headwinds?

Growth and margins pressure look temporary. Revenue growth decelerated in recent years because the real estate downturn meant lower installation and connection fees. These fees carry higher margins.

The war in the Middle East also caused natural gas to become more expensive. This squeezed ENN Energy’s margins.

However, the regulator (NDRC), has been pushing a price linkage mechanism that allows city gas distributors to pass upstream cost increases down to end-users. As of Dec 2025, ENN achieved a ~72% completion rate for residential price adjustments.6

The real estate market is cyclical. When the cycle eventually turns, installation and connection fees can recover.

Capital returns?

Dividend yield could increase above 7%. Over the past few years, cash capex has been exceeding depreciation and amortisation. When the infrastructure is completed, could ENN Energy return more capital to shareholders?

Privatisation?

Privatisation failed. Last month, the major shareholder shelved plans to privatise ENN Energy because of regulatory delays. Offer was HKD 80 per share. The shares now trade at HKD 42.

Major shareholder may want to try again. There is a good chance ENN Natural Gas, the major shareholder, will try again. Despite the setback, ENN Natural Gas said it intends to gradually increase its ⁠shareholding in ​ENN Energy.7

ENN Natural Gas can attempt privatisation again from Jun 2027 onwards.

Factors to focus on

1. More details on why revenue growth and margins deteriorated, and what is the outlook?

2. Why did the regulators not approve on time? Is it simply due to the complexity of how the privatisation is structured?

MegaStudyEdu Co. Ltd (215200 KS)

About (17 Jul 2026)

Share price: KRW 38,150

Market capitalisation: KRW 395 bn (USD 267 mn)

Enterprise value (EV): KRW 313 bn (USD 212 mn)

Average daily volume (ADV): KRW 2 bn (USD 1 mn)

NTM P/E: 4x

Last month, I published my thesis on MegaStudyEdu: Why South Korea’s top private educator can be a 3x.

In Feb 2026, MegaStudyEdu clarified that its founders have no plans to sell their stake. Since then, there has been no takeover news.

However, the company has been increasing capital returns, as I expected. At a board meeting earlier this month, MegaStudyEdu announced another dividend. Total dividends so far in 2026 amount to KRW 4,000. ~10.5% dividend yield.

The Board also authorised another share buyback program, valid through Jan 2027. MegaStudyEdu will repurchase up to KRW 10 bn worth of shares. This is ~2.5% of market cap.

With capital returns ~13% of current market cap. and aging founders, there seems to be a good chance of a takeover eventually.

Vote for the best idea

Vote for the most interesting idea. That may be the next idea I analyse in detail.

Coming up next

I will look deeper into Pets at Home Group Plc (PETS LN) this week. This was the idea voted the most interesting in my previous email.

Subscribe to get the analysis.

In case you missed it

Last week, I looked deeper into Craneware plc (CRW LN). It looks attractive enough to go on my shortlist.

The share price fell ~7% today because of a cybersecurity incident. The company said they have contained the breach, and “a large element of the data involved is non-sensitive or already public regulatory data.” Let’s see.

SK hynix forecasted the memory chip shortage will continue beyond 2030. In my previous post, I explained why I am skeptical.

Disclaimer

This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.

I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.

I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.

At the time of publication, I do not hold any positions in DATA, 2688, either long or short. I own shares in 215200. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

I am not sure.

We’ve talked before about the current shortage. In April 2026, I showed how we can use the price and cost of memory chips to forecast the semiconductor cycle.

John Kenneth Galbraith famously declared that “There are two kinds of forecasters: those who don’t know, and those who don’t know they don’t know.”

I am reluctant to make a forecast.

But just for fun, if you put a gun to my head, I dare say we are probably closer to the peak than most expect.

In April 2026, I ventured:

“I don’t provide financial advice or recommendations. But like any other private investor, I can always share my forecasts and how I am positioning my personal portfolio.

I estimate the shortage will end around Q1’27. Capex growth peaked around Q4’25. Historically, ASP starts to collapse 2 to 4 quarters after the peak in capex growth.

Because of forward guidance, investors will start reacting one or maybe two quarters before Q1’27. This means the rally in SOXX will probably end around Q4’26.”

Why does this puny analyst think the shortage will end before 2030?

Let me support my estimates with working capital trends. Specifically, inventory.

Don’t look at what they say, look at inventories

When demand is strong, inventory draws down. When demand is weak, inventory piles up.

That’s the basic principle.

We can add more sophistication by analysing the breakdown of inventory. Almost all companies will break down their inventory into 3 components:

1. Raw materials

2. Work in progress

3. Finished goods

When demand recovers and customers start ordering, the chipmakers will draw down their finished goods. Finished goods start decreasing. The chipmakers start ordering raw materials to replenish their finished goods. Raw materials start increasing.

In other words, when demand is strong, raw materials grow faster than finished goods.

You can see this in the chart below.2

When raw materials start growing faster than finished goods, this signals revenue growth will start accelerating soon after.

Source: Samsung Electronics Co Ltd (005930 KS); Angsana Anderson estimates

The reverse applies too. When finished goods start growing faster than raw materials, this is a leading indicator that revenue growth will start declining.

The raw spread

To spare our eyes, let’s combine this into just 1 indicator: raw materials growth – finished goods growth.

Because “the spread between raw materials growth and finished goods growth” is quite a mouthful, I will just call this “the raw spread”.

When the raw spread is positive, it means raw materials are growing faster than finished goods.

Source: Samsung Electronics Co Ltd (005930 KS); Angsana Anderson estimates

The raw spread leads revenue growth.

In Q1’24, the raw spread bottomed out and started growing. Revenue growth followed just one quarter later.

Today, the raw spread is still positive, but it has slowed down. A peak looks nearby.

This brings me back to my point

We are probably closer to a peak in the semiconductor cycle than the consensus and industry insiders believe.

If the shortage lasts beyond 2030, I would be very surprised.

But don’t bet the farm on forecasts. Remember, there are only two kinds of forecasters in the world!

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Disclaimer

This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.

I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.

I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.

At the time of publication, I do not hold any positions in 000660 KS, 005930 KS, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References & Notes

Give me your pitch in one minute.

Shortlist Craneware plc (CRW LN) as a long. The shares are near a 5-year low because they guided FY2026 revenue below consensus.

However, the market is likely over-reacting. Craneware is a good business, and the headwinds are likely temporary. That’s the first point.

Second point: attractive capital returns. Over the next year, Craneware will return ~ 7% of its market capitalisation to shareholders through buybacks and dividends.

I estimate ~ 8% free cash flow yield on enterprise value. For this growth potential, this is an attractive ~4% premium over US 10-year government bond.

Sounds interesting. Basic stats? Is it liquid enough?

Share price: GBP 11.86

Market capitalisation: GBP 402 mn (USD 538 mn)

Enterprise value (EV): GBP 391 mn (USD 524 mn)

Average daily volume (ADV): GBP 3 mn (USD 4 mn)

NTM P/E: 14x

People are trading CRW like a software stock. Look at the sell-off in early 2026.

The shares are moving together with IGV, the US software ETF. Not much correlation with the FTSE 100.

Yes. But I believe the threat from AI is overblown. It is a vertical software, difficult to replicate.

Ok. Tell me what Craneware does.

They sell software to 40% of all hospitals in the US.

Craneware got its start selling software to manage hospital chargemasters. Hospital chargemasters are comprehensive databases containing the pricing for every billable service a hospital provides.

Without Craneware’s software, the hospital would be forced to manage these massive, constantly changing lists manually. A process that becomes too tedious and highly error prone.

So, Craneware’s software is the bridge between the hospital’s treatment and their revenue?

Exactly.

They have significant goodwill. What is that about?

Its software now extends beyond managing chargemasters.

In 2021, Craneware acquired Sentry Data Systems (SDS). SDS sells software that helps hospitals manage compliance with the 340B program. This is a US government program that allows hospitals to purchase prescription drugs at steep discounts. It’s very complex.

By combining its existing hospital clients (who used them for billing and chargemaster software) with SDS’s clients (who used them for pharmacy procurement and 340B compliance), Craneware achieved ~40% market share of all registered US hospitals.

What proportion of revenue comes from chargemaster vs SDS?

Craneware no longer discloses revenue from chargemaster and SDS separately because, after the acquisition, they integrated into a single cloud platform called Trisus.

This is how they disclose their revenue now:

86% revenue is recurring.

Software licensing declined -3% in FY2025, but that’s mainly because of reallocation to transactional revenue. Overall recurring revenue still grew +5% YoY.

Competitors?

As far as I can tell, Craneware is the largest player, and the only listed pure-play. That’s why there’s not a lot of public information.

Here’s what Perplexity could gather:

Ok. That’s clear enough.

I saw the company released a trading update on 3 Jul 2026. The shares tanked more than -30% in just one day. What happened?

Craneware downgraded revenue for FY2026.

They now expect flat revenue, between USD 205 mn to USD 208 mn. Before the update, consensus expected revenue to grow +10% and reach USD 226 mn.

Why did Craneware downgrade revenue?

Drugmakers increased restriction on the distribution of discount-eligible medicines under the US government’s 340B drug pricing program.

This caused delays in hospitals receiving their 340B-eligible drugs. Because Craneware recognises a significant portion of this revenue only after a hospital receives the drugs, the drugmakers’ restrictions effectively pushed revenue into FY2027.

However, the consensus treats this revenue as ‘lost’ rather than delayed.

Look at the chart below. It shows the trend in consensus’ estimate of revenue for FY2026 and FY2027.

After the trading update, consensus cut their estimate of FY2026 revenue. At the same time, they also cut their estimate of FY2027 revenue. They did not adjust FY2027 up.

What makes you think the revenue is delayed, not lost? Why is this headwind temporary?

Safety-net hospitals rely the most on 340B discounts. If they do not get 340B discounts, they cannot sustain operations.

These hospitals look after the poor. Their operating margins average ~1%1, compared to ~20% net income margins at the average drugmaker2.

As you know, Trump has been pushing the drugmakers to lower prices.3

Gee… We don’t make bets on Trump here.

This is not a political bet.

Even if the drugmakers win, there will be opportunities for Craneware.

One of the main ways the drugmakers are restricting 340B drugs is through mandatory data submission. Drugmakers are requiring hospitals to submit detailed, itemised medical and claims data for every single 340B drug dispensed.

Which software will be best positioned to help the hospitals organise and submit this data?

So, you’re saying the headwind is temporary.

If the hospitals win, the 340B drugs get delivered in FY2027. Revenue is effectively pushed into FY2027.

If the drugmakers win, the hospitals will need to submit detailed claims data. Craneware, being the software serving 40% of all hospitals in the US, will be best positioned to help them.

Yup.

Look, Craneware is a good business. It’s not in terminal decline.

Here’s the future revenue it is expecting to recognise. Revenue expected to be recognised > 3 years later actually grew.

Source: 2025 CRW AR

These are just revenue from existing contracts. We have not even included new contracts.

Strangely, the consensus seems to be missing this data. I did not find much discussion about this.

That’s interesting. What other data do you have?

Trade receivables remain healthy.

As of 30 Jun 2025, 57% of trade receivables are current and not overdue. This is an improvement from 46% the prior year.

As of 31 Dec 2025, management made provision for 8% of trade receivables, an improvement from 10% the year before. This suggests management is not seeing significant difficulties in its customers.

If the business is in decline, customers would be delaying payments and provisions would be surging. That’s not what we’re seeing here.

Anything else?

Existing customers are spending more.

Net revenue retention (NRR) is the percentage of revenue retained from existing customers. In H1’26 and FY2025, Craneware reported NRR of 103% and 107%.

This sounds promising.

But is this the right time? I don’t want to get in and then get blown up right after.

I don’t see a nasty surprise around the corner.

Advance payments from customers, a leading indicator of revenue, finally returned to growth. In H1’26, it grew +2% YoY. It declined -2% in FY2025.

How about revision in consensus estimates?

The same chart above shows consensus estimates for revenue have largely stabilised. The chart is similar for EPS estimates.

Both the CEO and Chairman bought shares after the price collapsed in the wake of the trading update.

I heard Bain Capital offered GBP 26.50 per share, but the board rejected it. They believed it undervalued the company.^[4]4

This is a catalyst.

I believe the founder/CEO will likely want to sell. He is the single largest individual shareholder, owning ~9% of the company. Keith is already 56 years old, and there is no clear successor.

The most important question is price.

To get a price way above GBP 26.50, the company will need to show strong growth. That will probably only happen in FY2027 and beyond.

Ok. That’s fine, our investment horizon is 3 to 5 years.

You have my go-ahead to develop this thesis. What should we focus on?

Get more evidence to support my hypothesis that the headwinds are temporary.

Great. Go do that.

Coming up next

In Where are we in the semiconductor cycle?, we looked at how the price and cost of memory chips can predict the semiconductor cycle.

We can also supplement our analysis with working capital trends.

That’s what I will explore in my next post.

Subscribe for free to be notified immediately when I publish.

Disclaimer

This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.

I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.

I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.

At the time of publication, I do not hold any positions in CRW, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

As usual, let me know which idea looks the most interesting. You can vote using the poll at the end of this email.

I will look deeper into Craneware plc (CRW LN) this week. This was the idea you and I voted the most interesting last week.

After CRW, I will either share how I use working capital trends to forecast the semiconductor cycle, or why I invested in China Sunsine Chemical Holdings Ltd. (QES; CSSC SP).

I am still deciding. If semiconductor or QES will be more useful to you, reply to this email and let me know.

If you missed it, my previous post explained why DiDi is not dirt cheap, despite price-to-sales of only 0.4x. Grab and Uber trade at 3.6x and 2.5x.

Happy start to the week!

Pets at Home Group Plc (PETS LN)

About (10 Jul 2026)

Share price: GBP 1.90

Market capitalisation: GBP 837 mn (USD 1,122 mn)

Enterprise value (EV): GBP 1,194 mn (USD 1,600 mn)

Average daily volume (ADV): GBP 3 mn (USD 4 mn)

NTM P/E: 12x

PETS is one of the largest pet retailers and vet operators in the UK. It holds ~ 20% market share.

My initial estimate suggests ~ 9% free cash flow yield on EV, which is an attractive ~4% premium over UK 10y gilt yield.

Hidden asset?

Retail segment obscures growing Vet segment. Group underlying profit before tax (PBT) declined -30% in FY2026. Vet segment grew +10%. However, this growth was hidden by Retail segment’s -58%.

Group underlying PBT is also weighed down by startup costs at the Insurance segment. More on this later.

Good business, temporary headwinds?

Retail segment holds the largest market share in the UK.

Recently, this segment faced competition from discounters, a slump in high-margin accessories, and a messy distribution center consolidation.

However, early signs of recovery are finally breaking through. Logistics bottlenecks have finally eased. Retail revenue returned to +2% YoY growth in Q4’FY26. Price cuts increased volume more than proportionately.

Under-recognised growth?

The consensus seems to be under-estimating growth potential from cross-selling.

PETS will start selling pet insurance. In 2026, it received regulatory approvals from the Financial Conduct Authority (FCA). PETS estimates ~ GBP 2 bn market opportunity.

Takeover?

In Feb 2025, PETS share price spiked on rumours that BC Partners, a private equity (PE) firm is preparing a bid.¹

The conclusion of the CMA’s veterinary market probe in Mar 2026 clears a significant roadblock for a takeover.

Factors to focus on

1. How likely can PETS sustain the recovery in Retail?

2. How much growth can PETS enjoy from cross-selling other products like pet insurance?

   ---

PT Map Aktif Adiperkasa Tbk (MAPA IJ)

About (10 Jul 2026)

Share price: IDR 595

Market capitalisation: IDR 16,960 bn (USD 939 mn)

Enterprise value (EV): IDR 17,561 bn (USD 972 mn)

Average daily volume (ADV): IDR 15 bn (USD 1 mn)

NTM P/E: 9x

MAPA is the largest sports retailer in Indonesia, with ~60% market share. The next closest competitor has only ~5% market share.2

My initial estimate suggests ~ 10% free cash flow yield on EV. This looks attractive, given EPS could grow ~12% per year over the next 2 years.

Under-recognised growth?

Under-penetration. According to Euromonitor, sportswear retail is underpenetrated in Indonesia.

Though this is the most recent data I could find, the Indonesian market likely remains underpenetrated:

Source: IndoPremier (2019)

Limited competition. Regulation restricts foreign competition.

Indonesia’s retail foreign ownership rules (GR 29/2021, Omnibus Law) govern retail market entry:

• Stores < 400 sqm: Closed to foreign investment entirely. All must be 100% locally owned

• Stores 400–2,000 sqm: Previously capped at max 67% foreign ownership with a special Ministry of Trade licence. This cap was removed after 2021, but non-mall locations remain reserved for domestic companies

• Stores > 2,000 sqm: Foreign ownership permitted but the stores must be located within or integrated with a shopping mall.

Most retail stores in shopping malls are between 100 to 300 sqm. That’s why foreign brands like Nike and Adidas distribute their products through MAPA.

The government restricted the retail market to protect local players. I will be surprised if they liberalise it completely.

Privatisation?

Private equity acquired parent (MAPI IJ). CVC Capital Partners, a private equity (PE) firm, acquired 51% of MAPI in May 2026.3 MAPI owns ~69% of MAPA.

CVC just launched a mandatory tender offer to acquire more MAPI shares at ~11% premium. The offer will run through 17 Jul 2026.4

After the tender offer, CVC may look to increase its stake in MAPA or even privatise it.

CVC is investing in the MAP Group as a strategic investor wanting operational control and ASEAN expansion. A listed structure imposes disclosure burdens, minority veto rights, and valuation scrutiny. This creates friction for a PE owner.

Factors to focus on

1. Is 190 days of inventory normal?

   1. Global peers like JD Sports Fashion Plc (JD LN) hold only ~ 110 days.

   2. Maybe MAPA needs higher inventory because Indonesia is a large archipelago with less developed infrastructure.

   3. Management seems to be targeting ~180 days.

2. Is consensus too optimistic over the short-term?

   1. Sell-side consensus forecasts ~+10% revenue growth in 2026, despite management’s guidance for only high-single digit growth.

3. What will increase penetration?

   1. After 2026, consensus expects revenue growth to accelerate to +13% in 2027.

   2. What will drive the acceleration?

      ---

Australian Clinical Labs Limited (ACL AU)

About (10 Jul 2026)

Share price: AUD 2.22

Market capitalisation: AUD 412 mn (USD 295 mn)

Enterprise value (EV): AUD 704 mn (USD 498 mn)

Average daily volume (ADV): AUD 1 mn (USD 1 mn)

NTM P/E: 13x

In May 2026, I published - Australian Clinical Labs: Why I see an opportunity in Australia’s pathology service provider

I now believe the probability of takeover is higher.

ACL appointed Greg Horan as CEO.5 Before ACL, Greg was a Managing Director of Brookfield Australia, a PE firm.6

There has been quite some PE activity within the healthcare space in Australia.

Recently, competitor Healius is looking to sell its bioanalytical laboratory Agilex Biolabs in response to “several unsolicited approaches from credible parties”.7

Vote for the best idea

Vote for the most interesting idea. That may be the next idea I analyse in detail.

Coming up next

Among the 3 interesting ideas last week, you voted Craneware plc (CRW LN) the most interesting.

I agree.

The recent sell-off seems to have squeezed out all optimism.

However, there is a chance that CRW’s headwinds are temporary. Unearned revenue returned to growth (+2% YoY) in H2’25.

Bain Capital offered GBP 26.50 per share in May 2025. The board rejected it. If private equity likes it at GBP 26.50, they’ll like it even more at GBP 11.10?

Is there an opportunity? That’s what I will explore next.

Subscribe for free to be notified immediately when I publish.

Disclaimer

This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.

I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.

I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.

At the time of publication, I do not hold any positions in PETS, MAPA, ACL, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

Listen, Angsana. I’ve got a stock tip for you.

DiDi!

That’s the largest ride-hailing app in mainland China, isn’t it?

I’ve already loaded up my portfolio on this.

Why would you do that?

DiDi is so cheap.

It trades at only 0.4x price-to-sales, so cheap.

Grab and Uber are trading at 3.6x and 2.5x. DiDi is undervalued by at least 6 times, so cheap!

You cannot compare their sales like that. But never mind…

You remind me of someone. Once he starts chirping like a bird, there’s nothing on earth you can do to change his mind.

Come on! Tell me about it. I am open-minded.

Imagine you are a real estate agent. You sold a house for $1,000,000. You earned $50,000 commission. What is your revenue?

$50,000, obviously.

Why not $1,000,000?

Don’t be ridiculous. The agent does not own the house. She is merely in charge of selling it. Recognising the entire $1,000,000 is clearly overstating the size of her business.

Exactly.

The accounting standards make this clear. If you control the house, you recognise the $1,000,000. If you are only in charge of arranging the sale of the house, you recognise only your $50,000 commission.

What are the key indicators of control?

First, who has the primary responsibility for fulfilling the promise? If the windows are broken, who will be responsible for repairing them before the buyer takes the keys?

Second, who has inventory risk? If the house burns down today, who will suffer the loss?

Finally, who decides the price?

The answer is clearly the houseowner. The agent can advise on the market price, but it is the houseowner who ultimately decides what price she wants to sell.

What does this have to do with DiDi?

Ride-hailing apps face the same issue.

Let’s say your ride costs $100. $30 goes to the app and the remaining $70 goes to the driver.

How much revenue should the app recognise? $100 or $30?

Obviously, $30. That’s their commission.

Yes and no.

In most of their markets, Grab and Uber recognise their commission, $30.

Grab and Uber do not control the delivery of the rides. That’s the responsibility of the drivers. Grab and Uber see the drivers as independent contractors, not employees. Their apps merely connect these contractors with riders.12

Even though Grab and Uber facilitate price-setting, the drivers ultimately decide whether to accept or decline the price.

How about DiDi?

This is where it gets interesting.

DiDi takes a different approach from and .

In mainland China, DiDi recognises the entire $100 as revenue and records the driver’s share ($70) as cost of sales.

Why?

DiDi says the regulations in mainland China require online ride hailing platforms to take full responsibility for the ride services.3

As a result, DiDi controls the services provided to riders.

For example, if a driver cannot complete the ride, DiDi is responsible and will direct other drivers to complete it.

So, Grab and Uber mostly recognise revenue after deducting drivers’ fees, while DiDi recognises revenue before deductions.

That’s right.

In accounting parlance, we say DiDi is a principal. It controls the goods and services. It recognises gross revenue.

Grab and Uber are agents. They are only in charge of arranging the sale. They recognise net revenue.

That’s too much accounting for me. I am an investor, not an accountant.

Many investors think accounting is not important. But if only they had scrutinised how Enron recognised revenue, they would have dodged the big bullet.

In 1995, Enron reported ~ $9 bn in revenue. By 2000, its revenue had skyrocketed to over $100 bn, making it the 7^th largest company on the Fortune 500.

But this explosive growth was largely an accounting illusion.

Enron was a middleman matching buyers and sellers of energy contracts. Its peers operated under the agent (net) model. If a bank brokered a $1 mn trade and took a 1% cut, they reported $10,000 in revenue.

Enron, however, aggressively exploited accounting. The company temporarily took title to the contracts before the trade closed. By virtue of that, they argued they are the principal and they should recognise gross revenue.

Therefore, if Enron brokered that same $1 million trade and made a $10,000 commission, they didn’t report $10,000. They reported $1,000,000 as top-line revenue.4

Wow! But these kinds of accounting issues are so difficult to catch.

It is actually quite easy to spot.

The hint is unusually low margins.

Source: Dharan and Bufkins (2004)

Enron reported unusually low profit margins, despite revenues comparable to the top global energy companies.

Whether revenue is reported as gross or net, profits remain the same. But when you report gross revenue, you inflate the denominator of your profit margin formula, causing your margins to be abnormally low.

Both Grab and Uber reported gross margins ~39%. However, DiDi’s gross margin is only 16%.

So, DiDi is like Enron?

No, no, no… That’s not what I am saying.

There is no evidence that DiDi is doing anything wrong. If the law requires them to be the principal, then they are rightfully recognising gross revenue.

All I am saying is we cannot conclude DiDi is so much cheaper simply because its price-to-sales ratio is only 0.4x.

For a more accurate comparison, we need to use DiDi’s net revenue.

Once we adjust to net revenue, DiDi’s price-to-sales ratio is closer to 2.7x. This is not that much different from Uber’s 2.5x and Grab’s 3.6x.

DiDi is …

Wait, where are you going?

Cheap, cheap, cheap, chip, chip, chip…

Coming up next

Among the 3 interesting ideas I shared, you voted Craneware plc (CRW LN) the most interesting.

I agree.

The recent sell-off seems to have squeezed out all optimism.

However, there is a chance that CRW’s headwinds are temporary. Unearned revenue returned to growth (+2% YoY) in H2’25.

Bain Capital offered GBP 26.50 per share in May 2025. The board rejected it. If private equity likes it at GBP 26.50, they’ll like it even more at GBP 11.10?

Is there an opportunity for us? That’s what I will explore next.

But first, I will share 3 more interesting ideas next Monday.

Subscribe for free to be notified immediately when I publish.

Disclaimer

This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.

I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.

I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.

At the time of publication, I do not hold any positions in GRAB, UBER and DIDIY, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

Pick a stock. Read the annual reports. Meet management. Buy. Profit.

As with most things in life, the reality is much harder. If you buy a stock and it drops -20%, you’ll hear the much dreaded ‘ding’ as your boss Teams you. You will probably be forced to sell before your thesis plays out.

That’s the problem.

You need ideas that can make you money but won’t blow you up in the process.

I don’t have a silver bullet. But I have something I believe that’s very close to one: takeover/privatisation targets.

Now, I am not talking about merger arbitrage, where you bet on the successful closing of announced takeovers. People often say this is “picking up pennies in front of a bulldozer” or “earning the last penny from the guy (or gal) who earned the dollar”. I can’t argue with that.

I am talking about the person who earned the dollar. I am talking about companies that have not been taken over but are likely to be.

To attract your attention, let me share two examples.

In Aug 2022, I bought Evergreen Gaming Corporation (TNA CN). This is a small casino in the US. 4 months later, a competitor acquired it. I made +78%.

Last month, FirstCash Holdings, Inc. (FCFS US) offered +35% premium to buy Ramsdens Holdings PLC (RFX LN).

The takeovers were predictable.

FirstCash wants to expand into the UK and had just acquired Ramsdens’ competitor (H&T) in Aug 2025.

Maverick Gaming, Evergreen’s competitor, was on an acquisition spree. It tried to buy Evergreen before, but the deal fell through because of COVID-19. After the lockdowns ended, it revived the takeover.

So, there were signs. Competitors on an acquisition spree, an aging management team /shareholders without clear successor, history of takeover/privatisation attempts, etc.

More importantly, this strategy can be market-neutral. Evergreen contributed a lot to my portfolio’s +7% return in 2022, despite the bear market.

I want to be clear that I am not purely betting on the deals happening. That’s a greater fool game. I buy because I find the stock attractive. The potential takeover/privatisation helps me realise the stock’s value. It’s the cherry on top of the cake.

Enough talk! Let’s run through 3 interesting ideas at a high-level.

China Traditional Chinese Medicine Holdings Co. Limited (570 HK)

About (3 Jul 2026)

Share price: HKD 1.41

Market capitalisation: HKD 7,100 mn (USD 905 mn)

Enterprise value (EV): HKD 7,012 mn (USD 894 mn)

Average daily volume (ADV): HKD 19 mn (USD 2 mn)

NTM P/E: 9x

China TCM manufactures and sells traditional Chinese medicine (TCM) products, mainly in mainland China.

My initial estimate suggests ~ 8% free cash flow yield on EV, which is an attractive ~6% premium over China 10y government bond yield.

Good business, temporary headwinds?

Regulatory pressures. After Sinopharm’s takeover offer lapsed around late 2024, China TCM’s share price collapsed and continued to decline because of volume-based procurement (VBP).

VBP is a government-led centralized bidding system that forces pharmaceutical companies to cut prices (often 50%–90%) in exchange for guaranteed sales volumes in public hospitals. VBP started targeting China TCM’s products from Aug 2023.

As a result, China TCM’s operating profit declined -40% in 2024 and another -43% in 2025.

Government rolling back pressure. In Oct 2025, Caixin Global reported that China has tweaked the VBP rules and, for the first time, has not publicly disclosed the winning prices.

This signalled a policy shift aimed at easing excessive competition and fears of companies bidding below their production costs.1

Prices stabilising. In June 2026, the China Medicinal Herbs Composite 200 Index (中药材综合200指数) started showing signs of stabilization.

Source: 中药材天地网 (2026)

Inventory days normalising. Inventory days peaked at around 318 days in 2020 and has returned to ~203 days in 2025. Historical average is ~204 days.

With inventory days closer to a normal level, margins should be near a bottom.

Privatisation?

Largest shareholder wants to privatise. Sinopharm repeatedly tried to privatise China TCM. It holds ~ 33.5% stake.

In 2021, China TCM disclosed that Sinopharm was exploring a privatisation. In 2022, Sinopharm was reportedly preparing a potential offer of ~ HKD 6 per share.2

In early 2024, Sinopharm officially launched a take-private bid at HKD 4.60 per share. This bid ultimately lapsed in late 2024 because it didn’t receive the necessary approvals from Chinese regulators for outbound direct investment.3

Sinopharm can make another privatisation attempt from ~ Oct 2025 onwards.

Factors to focus on

1. Is pricing pressure from VBP really over?

2. Receivable days ~ 7 months because they sell to public hospitals, who have strong bargaining power. Benchmark against peers. Is this normal? Collectable?

3. Why were the privatisation approvals not received?

4. With the industry downturn, will the regulators be more open to consolidation?

Craneware plc (CRW LN)

About (3 Jul 2026)

Share price: GBP 10.82

Market capitalisation: GBP 367 mn (USD 489 mn)

Enterprise value (EV): GBP 356 mn (USD 476 mn)

Average daily volume (ADV): GBP 2 mn (USD 3 mn)

NTM P/E: 12x

Craneware sells healthcare financial software to hospitals.

Their software make sure the hospital gets paid what they are owed without getting bogged down in messy paperwork or rejected claims. It earns most of its revenue from the US, with ~40% market share.

I estimate ~ 9% free cash flow yield on EV. This is an attractive ~5% premium over US 10y government bond yield.

Good business, temporary headwinds?

Revenue likely pushed into next year. In Jul 2026, CRW announced that their performance during the year ending in Jun 2026 will be below consensus’ expectations. The stock fell -24% in just a day.

The Board blamed slower conversion of 340B opportunities into revenue and the deferral of some enterprise contracts. They expect to recognise these revenues in FY2027 instead.

As a result, FY2026 revenue will likely be flat. Before the update, consensus was expecting revenue to grow ~ +10% in FY2026.

I am surprised that the consensus is surprised. There was advance warning that +10% was probably too optimistic. Unearned revenue declined -2% YoY in H2’24 and another -2% YoY in H1’25.

However, there is a chance that the headwinds are temporary. Unearned revenue returned to growth (+2% YoY) in H2’25.

Takeover?

CRW rejected PE takeover. Bain Capital, a private equity (PE) firm, offered GBP 26.50 per share in May 2025. CRW rejected it. The board argued the offer undervalued the company.4

Today, CRW is trading at GBP 11.10

With the recent selloff, Bain Capital and other PE firms may try again.

Factors to focus on

1. More details on why customers are pushing their spending into FY2027. Are the issues really temporary?

2. The company operates a platform for hospitals to automate billing, compliance, etc. Any opportunities to grow through cross-selling, etc?

PayPal Holdings, Inc. (PYPL US)

About (3 Jul 2026)

Share price: USD 47.47

Market capitalisation: USD 40,109 mn

Enterprise value (EV): USD 42,437 mn

Average daily volume (ADV): USD 689 mn

NTM P/E: 8x

Last month, I argued why I find PYPL interesting - PayPal: Undervalued at 7.8x P/E?

I now believe the probability of a takeover is higher.

Recently, PayPal shut down its PayPal Ventures. This was its corporate venture arm that makes investments in startups, etc.5 The new CEO has also reorganised the company into 3 standalone segments: PayPal, Venmo and Payment services.

Cost-cutting and streamlining make the company more attractive to buyers and easier to sell.

Private equity is active in fintech. The sector is attractive because of depressed valuations.

In 2024, Advent International bought Nuvei Corporation (NVEI CN).6 Last month, Nuvei announced it will be buying its peer, Payoneer Global Inc. (PAYO US). CVC Capital considered buying Nexi S.p.A. (NEXI IM) earlier this year.7

Email me for 2 bonus ideas

I am actually running through 2 more ideas as I am writing this.

If you would like to hear about them, reply to this email or comment below.

Vote for the best idea

Use the poll to tell me which idea is the most interesting to you. That may be the next idea I analyse in detail.

Coming up next

At first glance, DiDi Global Inc. (DIDIY US) looks very cheap.

EV/Revenue is only 0.30x, compared to 2.5x at GRAB US and UBER US.

However, DIDIY’s true EV/Revenue is actually closer to 1.4x.

The difference is simply because of accounting. DIDIY recognises revenue in a different way than GRAB and UBER.

In my next email, I will explain this in detail.

Subscribe for free to be notified immediately when I publish.

Disclaimer

This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.

I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.

I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.

References

Summary

BMBL looks cheap. 3x NTM P/E. 23% free cash flow yield on enterprise value.

However, I decided to pass.

Dating apps have a short lifespan. As they grow, they inevitably attract low-intent users, or even bots and scammers. These bad users drive out good singles, causing a vicious cycle of decline.

BMBL seems to be in that decline. In Q1’26, paying users declined -21% YoY.

Unlike MTCH, BMBL does not have a new product like Hinge to drive future growth.

The bulls argue that the founder, who just returned as CEO, will turn things around. I am hopeful, but I could not find meaningful precedents of successful turnaround of such scale.

I believe the consensus is too optimistic, both over the short-term and long-term.

Sell-side consensus estimate is looking for only -13% revenue decline in 2026. In Q1’26, revenue declined -14% YoY while advance payments declined -15% YoY.

Consensus also expects revenue to return to growth by 2028. However, management estimated terminal growth rate at 0% when they tested goodwill for impairment in Q4’25.

Major shareholder Blackstone looks to be preparing to sell BMBL. However, I am not sure whether they can get the price they desire.

About (01 Jul 2026)

Share price: USD 3.23

Market capitalisation: USD 421 mn

Enterprise value (EV): USD 891 mn

Average daily volume (ADV): USD 11 mn

NTM P/E: 3x

Time spent: ~2 days

My decision

This is a record of my investment decisions, not financial advice. Read the full disclaimer at the end.

Pass

Background

Bumble Inc. (BMBL US) has fallen -96% since IPO.

In Feb 2021, BMBL ended its first trading day at USD 75.

‘Growth’ investors point to its strong network effect, supported by its requirement for women to make the first move.

Today, BMBL is USD 3.

Paying users dropped -12% in 2025, and another -21% in Q1’26.

“Value” investors point to its 3x P/E. What’s the worst that can happen?

Are they right?

Business model

Breakdown of 2025 revenue (USD 966 mn; -10% YoY):

• 81% Bumble App (-10% YoY)

• 19% Badoo App and Other (-11% YoY)

The Bumble App segment consists mainly of the Bumble App.

This is a dating app built around a “women-first” design where women must initiate contact, a feature meant to reduce harassment and create a more intentional dating culture. The user base skews towards Western college-educated singles. Average revenue per paying user (ARPPU) ~ USD 27 per month.

The Badoo App and Other segment consists mainly of Badoo, a pioneer of web and mobile dating founded back in 2006.

Badoo is a traditional, high-volume, geolocation-based match-and-chat interface centered on rapid social discovery. It is popular among emerging markets in Latin America, Eastern and Southern Europe. Because of this, ARPPU is lower at ~ USD12 per month.

BMBL operates a freemium model. The basic use of Bumble and Badoo apps is free, but users can buy subscriptions to unlock more features like additional likes or to boost their profile’s visibility.

BMBL earns 44% of its revenue from the US. The remaining 56% is earned from the rest of the world. The US is the only single country contributing >10% of BMBL’s total revenue. Revenue declined -18% in the US. In the rest of the world, revenue declined slower at -3%.

Relevant public comparables include Match Group, Inc. (MTCH US), Grindr Inc. (GRND US) and Hello Group Inc. (MOMO US).

MTCH owns Tinder and Hinge. GRND specialises in dating apps for the LGBTQ communities worldwide. MOMO owns Tantan, known as the ‘Tinder of China’.

My reasons

Dating apps die young

Dating apps have short lifecycles. I asked Perplexity, “Since the Internet started, what are the major dating apps? When did they start, and what’s their status today?”

Here’s what Perplexity compiled:

Source: Perplexity (2026)

The average lifespan seems to be ~15 years. 4 dating platforms shut down around this age. The platforms that survived beyond 15 years are in various states of decline.

The oldest is Match.com, at 31 years old. It is owned by MTCH. However, online reviews are very negative.1

Only two dating apps are clearly growing: Grindr and Hinge.

Why do dating apps die young?

Bad singles drive out good

Gresham’s Law. In economics, Gresham’s Law is the observation that bad money drives out good money.

If people are given two different types of currency that are legally worth the same, but one is secretly more valuable or higher quality, they will hoard the good one and spend the bad one. Eventually, the good stuff disappears from the market entirely.

In its general form, Gresham’s Law suggests when it is easy to flood a system with a low-quality version of something, the people offering the high-quality version will leave the market to protect themselves.

I suspect this is why dating apps live only ~ 15 years, and why BMBL is losing paying users.

Bad singles drive out good. In their infancy, dating apps thrive on a network of high-quality, genuine singles. As the apps scale, however, they naturally attract low-effort users, scammers, and bots. This degradation accelerated during the COVID-19 lockdowns.

BMBL, for instance, aggressively chased user growth by leaning heavily into performance marketing. While paid ads boosted user growth, they inadvertently flooded the ecosystem with low-intent users.

These low-quality users quickly overwhelm the platform with mass-swiping and copy-pasted messages that cost virtually nothing to produce, exhausting the high-intent singles who invest genuine time and emotional energy. Suffocated by dating fatigue, these good singles eventually leave or migrate to newer platforms like Hinge.

Compounding this systemic decay is the inherent irony of the dating app business model. A highly effective dating app naturally loses its best users, as high-intent singles successfully match and exit the ecosystem.

What does this mean for BMBL?

Difficult to estimate future cash flows

Losing users. Since Q1’25, BMBL has been losing paying users.

Source: BMBL, Angsana Anderson estimates

Tinder is also losing paying users.

Source: MTCH, Angsana Anderson estimates

However, Tinder’s user decline is partially offset by the rapid growth of Hinge.

MTCH fully acquired Hinge in 2018 to target singles looking for serious relationships. In 2018, Hinge was immaterial. By 2025, it is contributing ~20% to MTCH’s total revenue.

Therein lies BMBL’s problem.

No new products. BMBL gets ~80% of its revenue from its Bumble app, and the remaining 20% from Badoo. BMBL launched them in 2014 and 2006 respectively. Since then, BMBL has not released new major apps.

Given their short lifecycle, BMBL should be launching new apps.

Likely to continue losing users. The bulls argue that paying users will recover. Founder Whitney Wolfe Herd has returned as CEO in Mar 2025. BMBL is cutting performance marketing and purging bots and bad users. Eventually the user experience will recover and BMBL returns to growth.

Sadly, history is not on their side. I could not find meaningful precedents for a successful turnaround of such scale.

Revenue growth in 2026 likely below expectation. Consensus sell-side estimate is calling for -13% revenue decline in 2026.

I believe this is too optimistic.

In Q1’26, revenue declined -14%. Advance payments from customers (deferred revenue) declined -15% YoY, suggesting a steeper revenue decline in the short term.

Long-term growth likely below expectation. The bulls argue BMBL will eventually return to growth. Consensus estimates show revenue returning to +2% growth in 2028.

Compared to BMBL’s own estimates, this seems too optimistic.

BMBL tested goodwill for impairment in Q4’25. Most goodwill pertains to the Bumble and Badoo apps. To quantify the goodwill impairment, management is required to estimate BMBL’s terminal growth rate.

What was the terminal growth rate BMBL used?

0%.

Other matters

Largest shareholder likely wants out. On 26 Jun 2026, Reuters reported BMBL is exploring a sale.2 Blackstone is the single largest shareholder, with ~17% of the shares outstanding.

Given that Blackstone made its initial acquisition in Jan 2020, they have now held the asset for just over six and a half years. This puts them at the tail end of a traditional private equity holding period, which typically spans 3 to 7 years.

In Nov 2025, Blackstone and founder Whitney cleaned up BMBL’s balance sheet by relinquishing all their future rights to the Tax Receivable Agreement (TRA) in return for a significantly smaller cash payment upfront.

Without going too much into the technicalities, the TRA is essentially a debt that BMBL has to repay to Blackstone and Whitney when it starts earning taxable profits.

Blackstone and Whitney also converted their Common Units into tradeable common shares. Blackstone has been selling down its shares, with the latest sale happening on 29 Jun 2026.

These actions are consistent with preparations for a full exit from their remaining holdings.

But will they get the price they desire? I don’t see many buyers.

MTCH would probably trigger antitrust issues, given that they overlap significantly in the US.

MOMO, fresh off acquiring happn in 20253, will likely face an uphill battle to convince the Committee on Foreign Investment in the United States (CFIUS).

A consortium led by STORY3 Capital Partners, an alternative asset manager, is probably a front-runner to acquire BMBL.

STORY3 already has strong knowledge of BMBL. It was one of the lenders to BMBL’s refinancing round in Mar 2026. Furthermore, STORY3 is a specialist PE firm that explicitly targets consumer brands, commerce, and digital media.

The buyers will likely drive a hard bargain.

Factors that could lead to a re-assessment of my decision

1. Number of paying users stabilizes.

2. BMBL releases new products, and they are gaining traction.

3. Inflection in advance payments from customers.

Coming up next

I will show you how to inflate revenue.

Subscribe for free to be notified immediately when I publish.

Disclaimer

This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.

I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.

I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.

At the time of publication, I do not hold any positions in BMBL, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

“[We will] stay focused on managing Fu Shou Yuan, a living entity that carries memories and emotions, with a view to consistently rewarding our Shareholders with the best returns.”

That was the last interim report Fu Shou Yuan published on 23 Sep 2025.1

6 months later, the Hong Kong Stock Exchange (HKEX) suspended the company.2

Why did HKEX suspend Fu Shou Yuan?

Investigators found 47 questionable transactions amounting to around RMB 20 mn from 2016 to 2025.

Employees said some of these transactions were made under the former CEO’s instructions without any supporting documents.

The former CEO also withdrew cash without proper approval.3

Am I screwed? I bought a lot of shares back in 2022

I can’t tell for sure. The investigation is still ongoing.

I poured 20% of my portfolio into the company

That’s crazy! Why did you do that?

In Dec 2022, the Chinese government suddenly relaxed COVID-19 lockdowns. Everyone was expecting deaths to increase.4

I thought Fu Shou Yuan should benefit. It is China’s largest cemetery operator. Most of their revenue comes from selling and maintaining burial plots.

Despite the rally in its share price, I thought the shares were still too cheap for such a high-quality compounder with a long runway.

The share price was still below its previous peak. It’s too cheap.

Ok, but that doesn’t mean you should put 20% in, right?

Buffett said, “Big opportunities come infrequently. When it’s raining gold, reach for a bucket, not a thimble.”

Ok.

Actually, I was interested in the shares some time ago.

But I quickly passed.

I ran my eyes over their 10-year financials, and I had too many questions.

What did you see?

First, surging goodwill.

Goodwill nearly tripled between 2016 and 2020. In just five years, it went from 7% of total assets to 13%.

Source: Fu Shou Yuan, Angsana Anderson estimates

What is goodwill?

In an acquisition, the acquirer must record the acquired assets and liabilities at fair value.

The acquirer then compares the fair value against the acquisition price. If the acquisition price exceeds the fair value, the acquirer records the excess as goodwill.

Essentially, goodwill is the accountant’s way of saying, “The fair value of the target company is only $100 mn, but the acquirer is willing to pay $150 mn.

The acquirer must have seen some benefits in paying that extra $50 mn.

Let’s call this ‘hidden asset’: goodwill.”

Goodwill is common in the software industry.

Much of the value in a software company is not in their physical assets. Rather, their value comes from intangibles like the value of their software engineers, talented management, etc.

These get captured in goodwill.

Ok. Why are you concerned over surging goodwill at Fu Shou Yuan?

Cemetery operators are essentially in the real estate business. The only difference is they sell to the dead.

Goodwill is rare in real estate. Fair value is easily determinable and there are not a lot of intangibles like human capital, etc. that can result in goodwill.

Let’s illustrate with an acquisition Fu Shou Yuan made in 2017.

Fu Shou Yuan acquired Guangxi Huazuyuan, another cemetery operator. The company recorded RMB 23 mn of goodwill against the RMB 46 mn acquisition price.5

Why is Fu Shou Yuan recognising so much goodwill for a business where cemetery assets (real estate) are the main asset (51% of total assets acquired)?

What else did you see?

Unnecessary borrowing.

In 2023, Fu Shou Yuan borrowed RMB 200 mn. This was unexpected because the company had so much cash.

In fact, over the past 10 years, the company’s cash to revenue ratio never dropped below 100%. The median for real estate companies is only ~38%.6

Source: Fu Shou Yuan, Angsana Anderson estimates

I don’t think this is a red flag.

In their 2024 annual report, Fu Shou Yuan clarified the loan was “an overseas bank loan designated for the purpose of dividend payout.” They fully repaid the loan in 2024.7

Yes, companies operating in the mainland but listed in Hong Kong sometimes borrow to fund their dividends.

Moving large sums of cash across the border from mainland subsidiaries to the offshore listing entity requires passing through China’s strict foreign exchange controls (SAFE regulations). Cross-border dividends also often trigger a 10% withholding tax.

To bypass the delays, bureaucratic friction, and immediate tax leakage of moving cash outward, a company’s offshore entity will simply take out an offshore bank loan or issue HKD-denominated bonds to fund the immediate dividend payout.

But!

If Fu Shou Yuan borrowed to fund its dividends, why did they borrow in RMB instead of HKD?

Their bank charged 5.50%. Why is the interest rate so high?

A 5.50% rate is even higher than the average rate banks charge for loans to 小微 (micro and small) enterprises. These businesses are often considered higher-risk borrowers, yet the average rate for these loans in 2023 was only 4.78%.8

Fu Shou Yuan disclosed it borrowed RMB 200 mn at 5.50% in 2023.

Source: Fu Shou Yuan (2023)

Oh. I didn’t realise that… That’s really weird. I’ll have to think about that.

What was the last red flag you saw?

High turnover.

On 12 Dec 2025, the Board relieved Wang Jisheng of his CEO duties, though he remained as an executive director.9

That same day, Luo Zhuoping, an independent non-executive director resigned.10

Finally, on 13 Feb 2026, a week before the trading suspension, another non-executive director resigned.11

All departing staff confirmed they have no disagreements with the Board, and there are no other matters relating to their resignation that need to be brought to the attention of the shareholders of the Company or the Stock Exchange.

Later, on 18 Jun 2026, Fu Shou Yuan revealed that in Jul 2025, there were discussions on a mainland online forum alleging that the then-CEO Wang Jisheng, together with certain management of a subsidiary, breached compliance requirements for personal gain when operating projects of the subsidiary.12

Go figure.

Coming up next

Last Thu 25 Jun 2026, Reuters reported that Bumble Inc. is exploring a sale.13

I estimate the dating app generated ~ USD 200 mn of free cash flow to firm, against USD 867 mn enterprise value.

Could there be an opportunity in ?

I will explore this in my next post.

Subscribe for free to be notified immediately when I publish.

Disclaimer

This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.

I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.

I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.

At the time of publication, I do not hold any positions in Fu Shou Yuan International Group Limited (1448 HK), either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

Summary

I passed on Block, Inc. (XYZ US), PayPal’s rival.

Initially, I thought XYZ looks more attractive. Although Block trades more than twice PayPal’s NTM P/E, it is expected to grow much faster.

However, I concluded PYPL is more attractive. Its customers seem less saturated, and its loan book less risky.

The market also seems to have not fully recognised the regulatory risks surrounding XYZ.

Finally, I explain why Block’s faster revenue growth was misleading, and why a bet on Block is also a bet on Bitcoin.

About (25 Jun 2026)

Share price: USD 74.08

Market capitalisation: USD 44,501 mn

Enterprise value (EV): USD 45,280 mn

Average daily volume (ADV): USD 424 mn

NTM P/E: 18x

Time spent: ~2 days

My decision

This is a record of my investment decisions, not financial advice. Read the full disclaimer at the end.

Pass

Business model

Gross profit is more meaningful because headline revenue is significantly inflated by how accounts for its Bitcoin transactions. More on this later.

Breakdown of 2025 gross profit (USD 10,417 mn; +16% YoY):

• 59% Commerce Enablement (+10% YoY)

• 37% Financial Solutions (+31% YoY)

• 4% Bitcoin Ecosystem (0% YoY)

The Commerce Enablement segment enables customers to transact. It includes Square payment processing, Cash App Card, Cash App Pay, and all Buy Now, Pay Later (BNPL) products (Afterpay).

Square allows businesses to accept card payments, whether in-person or online. Its customer base is concentrated among small-to-medium-sized businesses.

Cash App is a popular digital wallet. Customers can make peer-to-peer payments, make direct deposits to earn interest, and borrow money. The customer base skews towards lower-income Gen Z and Millennials who are underbanked.

The Financial Solutions segment includes banking and money management tools like Square Loans and Cash App Borrow.

Square Loans provides loans to businesses that use Square’s point-of-sale hardware and payment processing software. Cash App Borrow is a short-term, personal micro-lending feature embedded within the Cash App digital wallet.

The Bitcoin Ecosystem segment includes all Bitcoin-related activities, including buy/sell functionality in Cash App, Bitcoin withdrawal fees, and hardware projects like Bitkey and Proto.

In 2025, XYZ earned approximately 87% of its gross profit from the United States, while international markets, heavily led by its Afterpay operations in Australia, accounted for the remaining 13%.

The most relevant public comparable is PayPal Holdings, Inc. ( US). Though, there are important differences which we will discuss later.

My reasons

PYPL looks more attractive

PYPL’s customers appear less saturated. In my previous post, I discussed how the market is under-recognising PYPL’s growth potential.

PYPL’s BNPL volume is ~ USD 176 per monthly active user (MAU). The US industry average sits significantly higher at USD 848 per active BNPL user.1

I estimate the same number for XYZ is ~ USD 910 per MAU. Of course, this is not an apples-to-apples comparison because this includes non-BNPL lending.

But if you consider that Cash App users skew towards lower-income population2, XYZ’s customers are likely closer to their borrowing limits than PYPL’s.

PYPL’s loan book looks less risky. I estimate PYPL’s net charge-off (NCO) rate ~ 6.0%, lower than XYZ’s 7.8% in 2025.

XYZ’s NCO rate will likely rise. Its NCO rate in 2025 is unduly low because XYZ started retaining more loans on its balance sheet only from Q2’25.

There is another risk that I believe the market has not fully appreciated.

Has regulatory risk been fully priced in?

Short report in 2023. In Mar 2023, Hindenburg Research, a short seller, accused XYZ of overstating its active user metrics while being complicit with fraud by prioritising growth over compliance. The short seller pointed to the insiders’ stock sale as their motive.3

USD 255 mn penalties and restitution. In Jan 2025, the Consumer Financial Protection Bureau (CFPB), a government agency, ordered XYZ to pay USD 55 mn fine and up to USD 120 mn compensation to consumers.

The CFPB found “Block allowed fraud to proliferate, closed cases of reported fraud without even opening a legally required investigation.”4

XYZ also agreed to pay an USD 80 mn fine imposed by states that alleged its money transfer service Cash App violated banking laws.5

DOJ investigations are ongoing. In Q1’26, XYZ accrued USD 240 mn as an estimate of its loss to settle the Department of Justice (DOJ)’s investigation.

XYZ also warned that “… it is reasonably possible that the ultimate resolution could result in losses in excess of the amount accrued and such losses could be material. The Company cannot provide any assurance that the ultimate resolution will not have a material adverse effect on the Company.”6

Is culture appropriate? Ultimately, the Hindenburg report and ensuing regulatory issues highlight a risk that the aggressive growth culture may have compromised controls.

Banks and fast growth usually don’t mix well. When banks chase aggressive growth, they often unwittingly sacrifice healthy controls to hit those growth targets.

Exposure to Bitcoin

Revenue growth depends on Bitcoin. At first glance, XYZ looks more exciting than PYPL. In 2020, XYZ more than doubled its revenue. PYPL only grew a meagre +21%.

The difference is largely because of accounting.

XYZ’s 101% revenue growth was primarily driven by its Bitcoin revenue. XYZ buys Bitcoin and resells them to its customers. It records the gross value of these Bitcoins as revenue, which will naturally increase during a rally. Without this, XYZ’s revenue would have grown only +17%.

PYPL also offers Bitcoin. But because PYPL only facilitates the Bitcoin transaction, it records only its processing fee as revenue.

That’s why I said faster revenue growth is not always better. It’s equally important to dig beyond the accounting and understand the economic reality.

In accounting parlance, we call this the principal vs agent problem.

Imagine you’re an investor trying to value a loss-making company. P/E does not work because earnings do not exist.

So, you use price/revenue. If the company incorrectly records gross revenue, slapping a price/revenue multiple on it will inflate its valuation. You’ll overpay.

In fact, I’ve seen multiple cases like this. But that’s a story for another day. Maybe I’ll share some cases with my subscribers, if there’s enough demand. Let me know in the comments.

XYZ holds Bitcoin. During Q1’26, XYZ reported USD 173 mn remeasurement loss on its Bitcoin investments. This is slightly bigger than its USD 172 mn operating loss.

Although the loss is non-operating, it is still an economic loss for shareholders.

As of Q1’26, XYZ still holds ~ USD 617 mn of Bitcoin.

Bitcoin exposure likely to increase. CEO Jack Dorsey is a big fan of Bitcoin.7

Nothing wrong with that. I just don’t have enough knowledge or skills to take a position on Bitcoin right now.

Factors that could lead to a re-assessment of my decision

1. Evidence of under-recognised growth potential (e.g. new revenue streams).

2. Resolution of the DOJ investigation, and strong evidence that the culture prioritises healthy controls.

3. XYZ reduces its exposure to Bitcoin, or I have enough information to take a position on Bitcoin.

Coming up next

Fu Shou Yuan International Group Limited (1448 HK) was a market darling.

At its peak in 2021, shares in the funeral services provider changed hands at HKD 8 per share. Investors expected booming business from COVID-19.

But it all came crashing down.

In Mar 2026, the Hong Kong Stock Exchange suspended trading in Fu Shou Yuan’s shares. There were questionable transactions spanning from 2016 to 2025.

The suspension didn’t come as a complete surprise to me. The company was already flashing red flags years ago.

What were the red flags?

I will explore this in my next post.

Subscribe for free to be notified immediately when I publish.

Disclaimer

This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.

I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.

I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.

At the time of publication, I do not hold any positions in XYZ, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

Summary

I passed on iFAST, Singapore’s homegrown fintech.

The business is what many investors would describe as a high quality compounder.

Indeed, iFAST has grown its revenue by 36% p.a. and EPS by 131% p.a. over the past 3 years.

However, I am not sure why customers are now taking more than 300 days to pay iFAST. I am also not sure about the durability of the profits from its UK banking subsidiary.

Finally, iFAST seems overvalued relative to global comparables. The consensus seems to be underestimating the industry’s cyclicality.

About (22 Jun 2026)

Share price: SGD 9.15

Market capitalisation: SGD 2,786 mn (USD 2,154 mn)

Enterprise value (EV): SGD 1,799 mn (USD 1,391 mn)

Average daily volume (ADV): SGD 11 mn (USD 9 mn)

NTM P/E: 23x

Time spent: ~2 days

My decision

This is a record of my investment decisions, not financial advice. Read the full disclaimer at the end.

Pass

Background

Is iFAST Corporation Ltd. (AIY; IFAST SP) overvalued?

Over the past 10 years, shareholders have been rewarded with ~27% p.a. total return.

Today, IFAST trades at 23x NTM P/E. It targets SGD 100 bn assets under administration by 2030. Its UK banking division just turned profitable.

However, I have some questions.

Why did receivable days increase so much?

Why are global peers like Allfunds Group plc (ALLFG NA) trading at only 18x NTM P/E?

Business model

Estimated breakdown of 2025 net revenue (SGD 340 mn; +37% YoY):

• 39% iFAST ePension (+65% YoY)

• 38% Business-to-Business (B2B) Wealth Management (+18% YoY)

• 12% Business-to-Consumer (B2C) Wealth Management (+10% YoY)

• 11% iFAST Global Bank (+64% YoY)

iFAST is a global digital banking and wealth management platform with assets under administration (AUA) of SGD 33 bn as of 31 Mar 2026.

The iFAST ePension segment provides pension administration services and white-labelled solutions to enable digital access, management and processing of pension scheme transactions.

This segment is the prime subcontractor for the eMPF Platform project. This project, funded by the Hong Kong government, aims to create a digital experience for the city’s Mandatory Provident Fund (MPF) system.1

The Wealth Management segment provides access to investment products such as unit trusts, bonds, stocks, and ETFs. This segment connects product providers like fund houses with Business-to-Consumer (B2C) self-directed investors and Business-to-Business (B2B) partners, such as financial advisory firms and banks.

The most important source of revenue here is trailer fees. This is a recurring fee paid by fund houses to iFAST for distributing their investment products, typically calculated as a percentage of the AUA held on iFAST’s platform.

The iFAST Global Bank segment is a fully licensed UK bank acquired in 2022.

In 2025, iFAST earned 51% of its net revenue from Hong Kong, 33% from Singapore, and 11% from the UK. Malaysia contributed 5% while China’s revenue is immaterial.

The UK and Hong Kong were the fastest-growing markets, with +64% and +52% YoY net revenue growth respectively. China and Malaysia grew more slowly, at +24% and +14% YoY. Singapore grew +16%.

Unit trusts make up 56% of AUA. Stocks & ETFs contribute 24% while bonds contribute 11%. The remaining 9% is held in cash accounts and deposits.

The most relevant public comparables are Allfunds Group plc (ALLFG NA) for B2B and Futu Holdings Limited (FUTU US) for B2C.

My reasons

Why are customers taking so long to pay?

Revenue and profits are growing. The bull case involves high growth. In the past 3 years, iFAST has grown its revenue by 36% p.a. EPS grew even faster, at 131% p.a.

iFAST’s growth was mainly driven by strong net inflows in AUA and its involvement in Hong Kong’s eMPF Platform project.

But little cash. Despite growing profits, iFAST seems to need more cash. iFAST borrowed a combined SGD 220 mn in Jun 2024 and Mar 2026. Why?

The problem seems to be growing receivables. Over the past 3 years, receivables grew +88% p.a., far outpacing +35% p.a. revenue growth.

Are receivables increasing due to 3^rd party financial advisers? Unlikely. When a customer buys investment products on iFAST’s platform through a 3^rd party financial adviser, iFAST collects a fee from the customer. A portion of the fee is due to the 3^rd party financial adviser.

iFAST records both a receivable (from customer) and a payable (to financial adviser).

Could the receivables growth be due to increasing contribution from transactions like these? If this is true, both receivables and payables should grow in line. There should be no significant growth in excess receivables (receivables less payables).

But this is not what I observed.

Before 2022, excess receivables were stable. They started surging from 2022 onwards, suggesting the recent receivables growth is likely due to other factors.

Source: iFAST annual reports, Angsana Anderson estimates

In 2016, customers took around 91 days to pay iFAST. By 2025, this has increased 330%. Customers are now taking around 301 days to settle invoices.

Likely due to Hong Kong’s eMPF. The surge in excess receivables coincided with the start of revenue recognition from the eMPF Platform project.

In fact, the SGD 262 mn of excess receivables coincides with my estimate of all the revenue that iFAST has recognized from the project (~ SGD 244 mn).

Projects like this are usually based on milestone billing, where iFAST is paid when it completes certain predefined stages.

iFAST reported a credit term of 4 to 6 months for its project fee receivables.2 During the Q4’25 earnings call, management reported trustees onboarding was largely completed in 2026. If so, why did receivables still grow +3% YoY in Q1’26?

Problems with eMPF Platform. In Jun 2025, Bloomberg reported glitches on the eMPF platform, which it described as built by PCCW with operational support from iFAST. The glitches include log-in difficulty and missing information.3

As recently as Mar 2026, the platform is still receiving many complaints. The government has announced that affected members can claim compensation.4

iFAST stated that its role is limited to operational and user delivery services.5

Has iFAST’s UK bank finally turned around?

Finally profitable in 2025. The bull case also involves a turnaround at iFAST Global Bank, its fully licensed banking subsidiary in the UK. iFAST acquired this subsidiary in 2022 when it was suffering from persistent losses. By 2025, the bank finally turned a profit.

Steepening yield curve contributed to profits, but this is beyond the bank’s control. The UK yield curve steepened significantly during the first three quarters of 2025. This benefited banks like iFAST, which borrow at short-term rates and lend at long-term rates.

iFAST’s net interest margin (NIM) improved from 0.8% in the prior year to 1.1% in 2025. Net interest income increased by GBP 5.6 mn, contributing to the lion’s share of the GBP 1.9 mn profit before tax (PBT).6

Given that the yield curve is beyond the bank’s control, I don’t think the profits in 2025 should be seen as durable. In fact, the UK yield curve flattened during Q4’25. iFAST Global Bank reported PBT declined -31% YoY in Q1’26.

Why is margin so high? 2025’s profits were aided by GBP 3.0 mn increase in net fee and commission income. Fee and commission income increased while the corresponding transaction expense decreased. As a result, net fee margin jumped from 72% to 87%.

It is quite rare to see such drastic improvement in margins, and such high margins. For comparison, Remitly Global, Inc. ( US), another remittance provider, reports only margins around 68%.7

iFAST Global Bank explained that fee and commission income increased due to increased transaction volume at EZRemit, as a result of onboarding new originating counterparties in the Middle East.8

However, I could not find further details on these counterparties, and the end-customers.

Why is iFAST trading at a premium over comparables?

Industry is cyclical. In 2022, AUA declined -8%. The broader stock market decline caused valuation losses and also slowed down net inflows. As a result, operating profit fell -55%.

The bear market in 2018 caused a similar deterioration in performance.

Consensus seems to underestimate cyclicality. iFAST trades at 23x NTM P/E, much higher than its B2B comparable, ALLFG (18x) and its B2C comparable, FUTU (7x).

The consensus seems to justify the premium multiple because of iFAST’s growing earnings visibility and its AUA target of SGD 100 bn by 2030. Sell-side consensus forecasts double-digit growth rates in each of the next three years.

However, I believe such high multiple does not leave enough margin of safety for the industry’s cyclicality.

That said, short-term looks ok. Uncompleted contracts represent contract amounts for client trades that have been executed but not yet settled. It is a leading indicator because of the correlation between trades and AUA.

In Q4’25, uncompleted contracts increased +45% YoY and appears to have continued increasing in Q1’26.

Factors that could lead to a re-assessment of my decision

1. iFAST starts collecting its receivables (i.e. days receivable normalize below 6 months, the upper limit of the company’s credit terms).

2. iFAST Global Bank reaches sufficient scale. (e.g. Loan book scales up. Currently, investment grade corporate bonds still form the bulk of its interest-earning assets).

3. Share price falls >30% without a significant deterioration of business fundamentals.

Coming up next

Previously, I discussed PayPal: Undervalued at 7.8x P/E?

Like PayPal , Block, Inc. has sold off significantly over the past 5 years, dropping almost -70%.

Unlike PayPal, Block is expected to grow its EPS by +45% p.a. over the next two years. PayPal is expected to grow its EPS by only +4% p.a.

Could Block be more attractive?

I will explore this in my next post.

Subscribe for free to be notified immediately when I publish.

Disclaimer

This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.

I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.

I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.

At the time of publication, I do not hold any positions in AIY, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

Summary

I shortlisted PYPL.

At 7.8x NTM P/E, PYPL is priced like a terminally declining business.

However, investors seem to be underestimating its growth potential in buy now, pay later (BNPL), Venmo and advertising.

Despite tremendous growth in recent years, BNPL value per active user remains significantly below industry average.

BNPL offers higher take-rates and increases transaction value. Unlike traditional lenders, PYPL sells most of its BNPL receivables. This allows it to grow without being constrained by BNPL’s capital intensity.

PYPL has significant room to monetise Venmo. Compared to peers like Revolut, Venmo’s product offerings are still limited.

UBER’s advertising unit is already generating USD 2 bn annual revenue. PYPL has more active users and deeper data, but its advertising revenue appears to be immaterial.

This is changing. In 2024, PYPL hired a senior executive from UBER’s advertising unit. In 2025, PYPL’s advertising unit started launching major products.

Catalyst: potential takeover by Stripe.

About (18 Jun 2026)

Share price: USD 42.51

Market capitalisation: USD 37,498 mn

Enterprise value (EV): USD 39,826 mn

Average daily volume (ADV): USD 665 mn

NTM P/E: 8x

Time spent: ~1 day

My decision

This is a record of my investment decisions, not financial advice. Read the full disclaimer at the end.

Shortlist

Background

PayPal Holdings, Inc. (PYPL US) has fallen -85% from its peak in Jul 2021.

It is now trading at only 7.8x NTM P/E, an all-time low. Historical average was ~ 27x.

Since Feb 2026, Stripe is said to be interested in acquiring PYPL.

Is there an opportunity?

Business model

Breakdown of 2025 revenue (USD 33,172 mn; +4% YoY):

• 90% Transaction Revenue (+3% YoY)

• 10% Other Value-Added Services (OVAS) Revenue (+14% YoY)

Transaction revenue consists mainly of net transaction fees charged to merchants and consumers for transactions completed on PYPL’s payments platform.

OVAS revenue consists of interest and fees from consumer and merchant loans, revenue-sharing partnerships for branded credit cards, subscription fees, and the interest earned on underlying customer account balances.

Main customers consist of everyday consumers who use its digital wallets to shop and manage money, and merchants who rely on its payment processing tools to drive sales and run their businesses.

In 2025, no customers accounted for more than 10% of revenue or net loans receivable.

Main suppliers include payment card networks, partner banks and payment processors.

In 2025, two payment processors accounted for 56% of transaction expense. These are likely Mastercard Incorporated ( US) and Visa Inc. ( US).

PYPL earns 57% of its revenue from US (+3% YoY) and 43% from the rest of the world (+6% YoY).

Block, Inc. ( US) is the most relevant public comparable.

It owns Cash App, which directly competes with PYPL’s Venmo for P2P transfers, direct deposits, etc. In 2022, XYZ acquired Afterpay to integrate BNPL into its ecosystem.

Some analysts compare PYPL to payment processors like Fiserv, Inc. ( US). However, the total return chart above suggests legacy payment processors are driven by other factors. XYZ seems to be the best comparable.

For a detailed explanation of PYPL’s business model, I recommend Bob’s Payment Stock Substack’s PayPal: Past, Present and Future.

My reasons

Under-recognised growth?

BNPL is under-penetrated. In 2025, PYPL generated ~ USD 40 bn in BNPL transaction volume1 across its 227 mn monthly active accounts (MAUs)2.

Blended across its entire active user base, this equates to ~ USD 176 in BNPL volume per MAU. For context, the US industry average sits significantly higher at USD 848 per active BNPL user.3

This comparison is not perfect because PYPL’s denominator includes customers for whom BNPL may never be suitable.

That said, the sheer magnitude of this gap strongly suggests under-penetration of BNPL among PYPL’s user base.

BNPL increases take-rate and transaction value. PYPL’s take-rate for an ordinary payment is only 2.6%, on average. If the customer completes the transaction using BNPL, PYPL’s take-rate increases to 4.5%.

BNPL also increases transaction value. When customers pay using BNPL, their average order value is on average more than 80% higher.4

BNPL is capital-light. Lending money is capital intensive. That’s why MoneyMax Financial Services Ltd. (5WJ; MMFS SP), Singapore’s leading pawnbroker, issued more shares recently.5 Without the infusion of new capital, growth will probably stall.

PYPL does not face the same problem because it has forward flow arrangements under which it sells most of its BNPL receivables to third‑party investors such as KKR & Co. Inc. (KKR US).6

Venmo is under-monetised. Venmo is PYPL’s US digital wallet and mobile app. It is popular among younger, mobile‑first consumers, especially Millennials and Gen Z. In 2025, Venmo accounted for ~ 19% of PYPL’s total payment volume (TPV).7

To show how under-monetised Venmo is, I’ve compared its product offerings against Revolut.

Revolut started in 2015 as a digital wallet. Today, it has evolved into a fully licensed digital bank and financial super-app.

Revolut monetises its users by charging subscription fees for premium perks like personalised cards, discounted airport lounge access, etc. It also distributes money market funds and offers stocks and commodities trading.

Source: Revolut (2026)

On the other hand, Venmo’s product offerings are sparse. It seems like Venmo does not even offer trading in stocks and ETFs.

Source: Venmo (2026)

Although Venmo is currently under-monetised, it also means growth opportunities.

Venmo already has more than 95 mn active accounts.8 It should not be too difficult to expand its product offerings and increase monetisation.

USD 2bn revenue from advertising? In 2022, Uber Technologies, Inc. ( US) launched its advertising business. By 2025, Uber Advertising brought in more than USD 2 bn of annual revenue.9

Despite being immaterial now, PYPL’s advertising revenue has the potential to match or even exceed USD 2 bn. PYPL’s 227 mn MAUs exceed UBER’s 202 mn. PYPL has deeper data on its users’ spending habits.

In 2024, PYPL hired Mark Grether, who formerly led UBER’s advertising business, to lead its newly created PayPal Ads division.10

PYPL’s advertising division seems to be gathering momentum. In 2025, PYPL launched PayPal Ads Manager, a zero-cost tool that enables merchants to monetize store traffic by displaying relevant advertisements on their websites.11

Capital returns?

Attractive capital return. In the last twelve months, PYPL returned USD 6,545 mn to shareholders, mainly through share buybacks. This represents ~17% of its market capitalisation today.

I estimate PYPL generates ~ USD 4,500 mn of free cash flow to firm (FCFF).

If capital returns normalise to FCFF, this will still represent ~12% yield on today’s market capitalisation. The 8% premium over United States 10y government bond looks attractive.

PYPL can likely sustain returning ~100% of its FCFF to shareholders because it is a capital-light business. Working capital requirements are not significant because PYPL sells most of its loan receivables upon origination.

Catalysts

Potential sale. In Feb 2026, Bloomberg reported that Stripe Inc., a payment processor, is considering an acquisition of all or parts of PYPL.12

The probability of a sale is high, in my view. PYPL is trading at an all-time low NTM PE of 7.8x, despite significant growth opportunities in BNPL, Venmo and advertising.

In Apr 2026, new CEO Lores simplified PYPL’s organisation into 3 segments: Checkout Solutions & PayPal, Consumer Financial Services & Venmo, and Payment Services & Crypto.13 This cleaner structure makes it easier for acquirers to buy part or all of PYPL.

Factors to focus on

Growth potential. My initial estimates suggest PYPL can generate an incremental annual revenue of at least USD 2 bn just from raising BNPL penetration.

I expect another USD 2 bn incremental annual revenue from its advertising division.

How much incremental revenue can Venmo generate?

How reasonable are my initial estimates? How successful will the new CEO be in realizing these growth opportunities?

Sustainability of transaction margin. Transaction margin refers to the portion of net revenues left after paying transaction expense and transaction and credit losses.

Despite the growth opportunities in BNPL, Venmo and advertising, traditional transaction fees remain the bulk contributor to revenue and profits.

PYPL’s sell-off on 3 Feb 2026 was partly driven by its guidance for a slight decline in transaction margin during 2026. This was unexpected.

Beyond 2026, will transaction margin continue declining?

Coming up next

In the past 10 years, shareholders of iFAST Corporation Ltd. (AIY; IFAST SP) enjoyed 27% return per year.

This is despite the saturation of the market by new players like Futu Holdings Limited ( US).

What’s the secret behind AIY’s success?

Is there still an opportunity for investors?

I will explore this in my next post.

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Disclaimer

This publication is for informational, educational, and entertainment purposes only and does not constitute financial, investment, legal, or tax advice. The content herein is a record of my personal research and investment process, and all analysis, forecasts, and opinions expressed are solely my own.

I make no representation or warranty, express or implied, as to the accuracy, completeness, or timeliness of the information provided. The stock market is highly volatile, and my forecasts, estimates, and assumptions may prove incorrect.

I am not acting as your financial advisor or fiduciary. You should not rely on any information in this publication to make investment decisions. Under no circumstances will I be held liable for any direct, indirect, or consequential losses or damages arising from your reliance on the content of this publication.

At the time of publication, I do not hold any positions in PYPL, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References