Next week, I will take a break. I will return the following week (Mon 28 Sep 2026).

I want to achieve two goals during the break.

First, how can I make this newsletter more useful to you?

If you have any feedback, I will be very happy to hear from you.

Thanks to the readers who wrote in and suggested improvements. Where practical, I have already started implementing the feedback.

Finally, I will also be using the break to prepare for my interviews in Singapore. More on that after the break.

Today’s topic is a very important lesson I learnt during my time in the industry.

Let’s dig in.

You invested in an equity fund. It is down -30% this month. What’s your reaction?

• “This is just volatility. Not risk”

• “What is going on?!?”

Like most investors, you will probably choose the second option. Pick up the phone, summon the portfolio manager (if you can get hold of them). Listen to explanations. Dismiss them as pathetic excuses. Withdraw your money.

When enough investors do this, the fund eventually collapses.

Warren Buffett and Charlie Munger said volatility is not risk. Permanent capital loss is the true risk.

Source: Wikipedia (2026)

For this to be true, I realised you need to fulfill 3 conditions:

1. Permanent capital

2. Proper investment thesis

3. Emotional stability

In the first example, the portfolio managers (PM) has done their research properly. They are emotionally stable. They are willing to hold until the thesis plays out in the long-term.

But the fund still collapses.

Their investors pulled out. They don’t know whether the -30% drawdown is just volatility or permanent capital loss. After all, the investors have not researched the stocks. How can they have conviction that the stocks will eventually recover?

In Buffett’s case, he can ignore volatility. He knows what he is doing, and he doesn’t balk when stock prices fall (at least not publicly). Above all, he has permanent capital. That’s a very very strong competitive advantage.

For the rest of us who have to report monthly results, we will need to find ways to manage volatility.

How to (try to) manage volatility

The easiest and cheapest is diversification. But you’ll still be exposed to market movements (beta). So you short stocks too. That’s long/short equity. But long-only funds cannot short.

Before Buffett had permanent capital, he used ‘work-outs’ to manage volatility:

Our second category consists of “work-outs.”

These are securities whose financial results depend on corporate action rather than supply and demand factors created by buyers and sellers of securities…

Corporate events such as mergers, liquidations, reorganizations, spin-offs, etc., lead to work-outs.1

He goes on to explain the benefits:

This category will produce reasonably stable earnings from year to year, to a large extent irrespective of the course of the Dow. (emphasis mine)

One of Buffett’s common trades is betting on the completion of an announced merger or acquisition. Nowadays, this is called ‘merger arbitrage’.

Here’s how it works.

After a merger is announced, the target’s share price would often rise to near, but not quite exactly the offer price.

A recent example is EQT’s takeover of Intertek Group plc (ITRK LN). The private equity (PE) firm offered GBP 60.00 per share.2 The share price today is GBP 58.40

If you buy ITRK shares today and the deal closes by year-end, you will earn ~3%. This is ~12% annualised.

Best of all, ITRK’s share price becomes more dependent on the deal closing and less correlated with general market movements. In other words, less volatile.

But this is not a free lunch.

If the deal falls through, the share price will collapse. You’re looking at a -35% loss if the price collapses to the pre-deal levels.

It is this asymmetric payoff that makes me hesitate.

Buffett himself admits:

That brings me to the question: How can I be the other fellow that has made the first 95 cents?

My strategy here is:

If I buy undervalued shares, I will be exposed to market volatility. But if I buy undervalued shares with higher-than-expected probability of a takeover, I can generate higher returns with lower volatility.

This strategy seems to be working.

Despite the bear market in 2022, my portfolio returned +7% in 2022, largely due to a takeover.

Here’s a preview of the framework I’ve developed:

Factors that increase the probability of a takeover

• History of takeover attempts (CRW LN, GENM MK, WAF GR)

• Management is reaching retirement age without a clear successor (RFX LN)

• Company owned by a PE fund + PE fund near maturity (CTOS MK)

• Management restructuring the business into independent segments that can be easily sold (PYPL US)

• Management starts cutting costs and ‘long-bets’ to improve profitability (PYPL US)

• Professional and consulting fees increase significantly. This detail can be found in the accounting footnotes

• Divestment of non-core assets (CTOS MK)

• Appointment of new board members or C-suite with PE experience (YOU LN, ACL AU)

• Activist investor pushing for sale (YOU LN)

• Peers in the industry being acquired (RFX LN, PETS LN)

• PE firm raising new funds targeting a specific sector

• Major shareholder steadily buying more shares (NEC AU)

• Competitor announcing intentions to grow via acquisitions

• Target generates stable free cash flow + low debt

Factors that decrease the probability of a takeover

• Controlling family who sees the company as a crucial part of their empire

• Huge overlap between the target and acquirer’s market

• Takeover depends on complex financing

• Acquirer is already highly levered

• Target operates in a politically sensitive industry

Coming up next

After my break, I’ll be back with 2 to 3 more interesting ideas.

I’ll then analyse the most voted idea from my last post.

Right now, that’s Mortgage Advice Bureau (MAB1 LN). Haidilao (6862 HK) is the runner-up.

Haven’t voted yet? Check out my last post: 2 More Attractive Ideas

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 the companies mentioned in this article, 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 Siltronic. What’s your suggestion?

Shortlist WAF.

The market sees it as a lousy business. It’s still loss-making in the midst of a semiconductor boom.

However, my preliminary research suggests WAF is reaching a cyclical inflection.

Liquidity?

15 Sep 2026

Share price: EUR 68.00

Market capitalisation: EUR 2,040 mn (USD 2,354 mn)

Enterprise value (EV): EUR 3,025 mn (USD 3,492 mn)

Average daily volume (ADV): EUR 8 mn (USD 9 mn)

NTM P/E: -13.5x

LTM P/B: 1x

What does WAF do?

WAF is the world’s fourth largest maker of semiconductor wafers.

Source: Angsana Anderson estimates

Top 3 customers contribute 57% of revenue. They include Intel Corporation ( US), Samsung Electronics Co., Ltd. (005930 KS) and Taiwan Semiconductor Manufacturing Company Limited ( US).

~ 66% of revenue is contracted with customers under long-term agreements. Pricing and volume are fixed there.

Why is WAF’s total return lagging SOXX?

Major companies in SOXX like NVDA and MU are more directly exposed to AI (more downstream). The shortage has not reached WAF yet because it makes semiconductor wafers (more upstream).

I believe this is about to change.

Cyclical inflection

2 pieces of evidence point towards a cyclical inflection.

First, inflection in major customers’ raw materials.

Semiconductor wafers are the major raw materials used to make chips. The trend in raw materials at major customers should give us a good picture of WAF’s revenue.

In the charts below, I plotted YoY% change in major customers’ raw materials vs WAF’s revenue growth. The data is quarterly.

INTC’s raw material shows the strongest relationship with WAF’s revenue.

Source: Tikr

There seems to be better-than-expected upside to WAF’s revenue growth. INTC’s raw material growth has only just started to inflect, and it is still at a relatively low level.

How about Samsung Electronics?

Source: Tikr

The relationship with Samsung is weaker.

I suspect Samsung is a smaller customer. Being a Korean company, they probably buy more from WAF’s Asian competitors like SK Siltron (Korea) or SUMCO (Japan).

Nevertheless, the strong growth in Samsung’s raw materials bodes well for WAF’s revenue growth.

TSMC?

TSMC’s raw materials growth shows a very weak relationship with WAF’s revenue. I am still trying to figure out why.

TSMC seems to be managing its raw materials differently from INTC and Samsung Electronics.

Source: Tikr

What’s your second evidence of an inflection point?

Inflection in GlobalWafers’ monthly revenue growth.

Because both GlobalWafers and WAF operate in the same industry, their revenue trend should be similar.

Between April and June 2026, GlobalWafers reported -10%, -3% and -2% YoY revenue growth respectively.

That has changed.

In July 2026, the company reported +20% YoY revenue growth. This was followed up by +8% in August 2026.

You can see the inflection point here:

Source: GlobalWafers (2026)

If GlobalWafers is growing +20% and +8% in Q3’26, WAF’s guidance of low to mid-single digit revenue growth in 2026 may look too modest.

Why hasn’t the market recognised the inflection point yet?

At first glance, Siltronic looks like a lousy business. Revenue declined for 3 consecutive years. Loss-making since 2025.

However, Siltronic’s revenue has actually stabilised.

The YoY revenue declines in 2025 and H1’26 were driven by the depreciation of USD against EUR and the closure of its loss-making small diameter wafers business. Without these two factors, revenue would be flat in 2025 and H1’26.

The losses in 2025 were due to the completion of its latest fab in Singapore.

WAF has to start recording depreciation, even though FabNext is still ramping up production. Once volume ramps up, profits will return.

Catalysts?

Revenue grows faster than expected and WAF returns to profits sooner than expected. This could happen as early as the Q3’26 earnings release, scheduled for 11 November 2026.

Longer-term, there is still a chance that WAF is taken over. The previous offer price was EUR 145 per share. We talked briefly about this last week.

This all sounds reasonable. But I am confused.

I just remembered you said we are close to the end of the semiconductor shortage. If that’s true, why are we looking at a semiconductor company?

To be precise, I was trying to say that we are closer-than-expected to the end of the memory chip shortage.

The shortage is travelling up the semiconductor supply chain. There are emerging signs of an inflection point at more upstream players like WAF, but not many investors are noticing this yet.

That’s essentially my thesis.

Interesting. Let’s shortlist this for further research.

Look into their ability to repay their debt. They took on a lot of debt to build FabNext.

If the recovery is slower than expected, can they repay or refinance their debt? How much headroom do they have?

Coming up next

Buffett is wrong. Volatility is risk.

I’ll explain why, and how I evolved my investment strategy and process to accommodate this.

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 am long WAF GR. I may change my views, predictions, or personal portfolio positioning at any time without notice.

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

Mortgage Advice Bureau (Holdings) plc (MAB1 LN)

About (11 Sep 2026)

Share price: GBP 3.80

Market capitalisation: GBP 220 mn (USD 298 mn)

Enterprise value (EV): GBP 212 mn (USD 287 mn)

Average daily volume (ADV): GBP 0.9 mn (USD 1.2 mn)

NTM P/E: 8x

MAB1 is one of the largest mortgage networks in the UK. It provides regulatory oversight, software, and lender access to mortgage advisers.

Mortgage procuration fee is the largest revenue stream. It accounts for 42% of revenue in 2025.

Here’s how it works.

A homebuyer approaches a mortgage adviser. The adviser uses MAB1’s software to help the homebuyer assess affordability, the best mortgage lender, etc. They then apply for the mortgage via MAB1’s software.

After the lender disburses the mortgage, it pays a commission to MAB1. MAB1 recognises the entire commission as revenue and the adviser’s cut as its cost of sales.

In 2025, MAB1 grew revenue by +20%. This was driven by +6% growth in number of mortgage advisers and +13% growth in revenue per adviser.

Good business, temporary headwinds?

MAB1 looks interesting now.

The shares dropped -20% after it cut profit guidance on 9 Sep 2026.1 House purchase activity was slower than expected.

As the chart above shows, investors are treating MAB1 like a homebuilder. The shares trade in line with Persimmon Plc (PSN LN), one of the UK’s largest homebuilders.

MAB1 trades at 8x NTM P/E while PSN trades at 11x.

However, I believe MAB1 should trade at a higher valuation than PSN.

It is a better business. Capital-light. No significant investment in working capital.

MAB1 produces ~10% free cash flow yield on enterprise value (FCF yield). PSN’s FCF yield is negative because of significant inventory.

MAB1 earns 9% return on asset (ROA), superior to PSN’s 5%.

What could close this valuation gap? A sale looks likely.

Potential sale?

CEO and founder Peter Brodnicki is the largest single shareholder, holding ~18% of shares outstanding. Peter is already 64 years old but has no clear successor.

Private equity (PE) firms are targeting capital-light companies in the UK.

Overseas acquirers continue to feast on the UK market like hungry customers at an all-you-can-eat buffet,” said Russ Mould, the investment director at AJ Bell.2

Last week, shares in Eleco PLC (ELCO LN) spiked 70% after the construction software company agreed to a takeover by PE firm Accel-KKR.3

MAB1 fits the profile of a target. Capital-light and high free cash flow conversion. The company is holding net cash, so it has the ability to take on more debt.

Factors to focus on

1. When will the UK housing cycle recover? Are we already at the bottom?

2. Why did MAB1 replace its CFO?

   1. Risk looks lower because there is a handover period

3. Is it appropriate for MAB1 to recognise gross revenue?

Haidilao International Holding Ltd. (6862 HK)

About (13 Sep 2026)

Share price: HKD 9.87

Market capitalisation: HKD 56,074 mn (USD 7,150 mn)

Enterprise value (EV): HKD 53,971 mn (USD 6,882 mn)

Average daily volume (ADV): HKD 207 mn (USD 26 mn)

NTM P/E: 11x

Haidilao operates one of the largest hotpot chains in mainland China.

Good business, temporary headwinds?

Intense price war between food delivery platforms in 2025 hurt restaurants like Haidilao:

The latest financial results of major listed restaurants, teahouses and cafes analyzed by Bloomberg News show that aggressive online promotion campaigns took a toll on their businesses in the first half of the year, especially in the three months to June when the price war kicked off.4

Source: Bloomberg (2025)

The price war subsided in early 2026 after the regulator launched investigations.5

Haidilao reported early signs of recovery. In H1’26, table turnover rate improved slightly (3.8x to 3.9x) and average spending per guest declined only slightly (RMB 97.9 to RMB 97.0).6

Yet, Haidilao’s share price just hit an all-time low.

The shares slumped last week after the founding family announced a surprise sale of 4.6% of shares outstanding at ~6% discount.

Although they did not disclose the exact reasons, the sale has been linked to tax reasons. The family held their shares through offshore trusts. In July 2026, China announced it will start taxing offshore trusts within 90 days.7

That’s why I see last week’s sell-off as a technical, temporary issue.

With the easing of the price war, Haidilao’s prospect looks much better. Core business seems to have stabilised. New growth engines (delivery business and new brands) are gaining momentum: revenue more than doubled YoY in H1’26.

Without fundamental deterioration, I will be very surprised if the shares fall significantly from here.

Factors to focus on

1. Growth potential of delivery business and new brands like sushi and food stall hot pot

2. Stabilisation of core business

3. Why did Haidilao perform much better than peers like Jiumaojiu and Xiabu Xiabu?

   1. I suspect economies of scale and vertical integration. Have these been fully priced in?

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 Siltronic AG (WAF GR) this week. This was the idea you voted as the most interesting in my previous email.

Is the world’s 4th largest semicon wafer maker reaching an inflection point?

Subscribe to get the analysis when I publish.

In case you missed it

Last week, I highlighted the opportunity I see in Elan Corporation (6099 JP).

I also showed why we should not follow investing rules. They’ll get us into trouble.

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 MAB1 LN or 6862 HK, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

“Invest only in companies without debt. Low risk.”

“Never invest in companies with negative equity. Too risky.”

Rules like these will get you into trouble.

Here’s why.

“Debt-free = risk-free.” Wrong!

A company with no net debt is rated junk. Another with 6x net debt/EBITDA is investment grade.

Athabasca Oil Corporation (ATH CN). USD 206 mn cash against USD 148 mn debt. Operating profits of USD 215 mn.

Yet, S&P Global rated its notes junk.1

Enbridge Inc. (ENB CN). USD 78 bn net debt. Only USD 8 bn of operating profits.

That same credit rating agency blessed its bonds with BBB+. Investment grade.2

What gives?

Cyclicality.

ATH swings between losses and profits. It is an oil exploration and production company. Profits depend on oil prices.

ENB never reported an operating loss. It owns oil pipelines and storage terminals. Profits roll in no matter the oil price.

Next time you hear, "You must only invest in debt-free companies. Low-risk!", remember ATH and ENB.

“Negative equity = high risk.” Wrong again!

This company has negative equity, but is still investment-grade.

Altria Group, Inc. (MO US). Maker of Marlboro. 40% market share in the US. It owns USD 33 bn of assets. But it owes USD 36 bn. Negative equity of USD 3 bn.

Yet, Moody's, S&P Global and Fitch all rated it investment grade.

What gives?

Superior cash generation.

Altria generates ~ USD 9 bn of free cash flow every year. Consistent. Stable.

Altria structured annual debt maturities below USD 2 bn over the next five years.

Fitch praised this "Conservative Financial Policy".3

Similar stories at McDonald's Corporation (MCD US), Philip Morris International Inc. (PM US) and other consumer staples.

Next time someone tells you, "Never invest in companies with negative equity! Too risky!" or "The debt/equity ratio is too high!", remember Altria.

A company goes bankrupt when it cannot pay its debt, not purely because of accounting.

Afterword

Regular readers already know I don’t like blindly following rules. It can be very frustrating to have stock pitches shot down because of blind rules.

Always understand the business.

Experienced readers already know this.

If you’re one of them, great. Here’s your reward. The funniest meme I’ve seen this year:

Source: wallstreetbets (2022)

Coming up next

Next week, I’ll be back with 2 to 3 more interesting ideas.

I’ll then analyse the most voted idea from my last post.

Right now, that’s Siltronic AG (WAF GR). Tuas Limited (TUA AU) is the runner-up.

Haven’t voted yet? Check out my last post: 2 Attractive Ideas

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 the companies mentioned in this article, 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 Elan.

Liquidity?

1 Sep 2026

Share price: JPY 746

Market capitalisation: JPY 45,123 mn (USD 282 mn)

Enterprise value (EV): JPY 38,892 mn (USD 243 mn)

Average daily volume (ADV): JPY 67 mn (USD 0.4 mn)

NTM P/E: 13.5x

My initial estimate suggests ~9% free cash flow yield on enterprise value. ~6% premium over the Japan 10y government bond yield. Looks attractive.

FCF yield looks attractive, but this will be more suitable for a personal account. Liquidity is on the low side.

That’s probably why this opportunity exists. No serious investors are looking.

Normally, I look for opportunities > USD 1 mn daily trading volume. USD 0.5 mn minimum.

I came across this by chance. It looks too attractive to ignore.

Less than two years ago, M3, Inc. (2413 JP) paid JPY 1,040 per share. Today’s share price is only JPY 746.

Interesting. What does Elan do?

Elan rents out personal care kits to patients staying in hospitals. The kits include hospital gowns, toiletries, diapers, etc.

They call this the “CS Set”.

Source: Elan (2026)

In 2025, it served 2,830 healthcare facilities (+10% YoY). Mostly hospitals, but a growing proportion of nursing care facilities. Average annual revenue per facility is ~ JPY 19 mn (+2% YoY).

491,000 active monthly users (+7% YoY) and JPY 9,000 average monthly revenue per user (ARPU) (+5% YoY).

Almost all revenue is earned in Japan. Customers are individual patients.

Why did the shares’ total return peak between 2020 and 2021?

Between 2017 and 2020, Elan’s shares surged on the back of high growth. Its service was under-penetrated among the large hospitals and nursing homes.

COVID-19 lockdowns turbocharged growth. More patients signed up because their families could not deliver laundry and personal care kits.

After lockdowns ended, growth normalised.

Good business, temporary headwinds

How is this a good business?

Look, gross profit margin (GPM) declined so much in the past 2 years! We only invest in compounders that can grow their margins.

This is a temporary accounting headwind.

GPM declined because Elan expensed upfront its new product, lifte. As these are premium hospital garments for rent, it will be more appropriate to depreciate them over their useful lives.

Elan realised this. In H1’26, they moved to depreciation over three years. GPM increased by 1.4 percentage points to 22.6%.

Global peer Johnson Service Group plc (JSG LN) also depreciates their linen over two to three years.

Good point.

I was surprised they had such high return on assets (ROA). ~ 12%. Their competitor TOKAI Corp. (9729 JP) achieved only ~ 5%. Why?

TOKAI owns its laundry plants. Elan outsources the laundry and focuses on assembling the kits, managing relationships, customer service and billing.

Capital-light. Good business.

Their free cash flow conversion is good. They should trade at more than 14x NTM P/E.

In fact, their true NTM P/E is slightly lower: 13.5x

Why?

Elan amortises goodwill. JPY 131.5 mn per year. That’s JPY 2.2 per share.

Management forecasts earnings per share (EPS) at JPY 52.81 in 2026. Add back the goodwill amortisation, you’ll get JPY 55 EPS per share.

NTM P/E drops to 13.5x

Under-recognised growth

Elan targets +15% p.a. revenue growth over the next 2 years. 10% organic growth. The rest from M&A.

If they can achieve that, 13.5x P/E looks very attractive.

Can they?

10% organic growth looks reasonable. The product remains underpenetrated in Japan.

By my estimates, the top 5 players hold ~ 62% market share by number of contracted facilities. Elan is the second largest player with 16% market share.

The remaining 38% is either held by small-scale players or unpenetrated.

I am skeptical. Aren’t a lot of hospitals closing down in Japan?1

Yes.

But the market continues to grow because small-scale care facilities are growing, especially premium nursing homes.

Source: Elan (2026)

Historically, Elan focused on mass market large-scale hospitals and nursing homes, with 50 beds or more.

From 2024, Elan started expanding into these growing small-scale nursing homes. The company has grown its penetration rate to ~2%. But there remains a lot of room to grow.

I’ve updated my estimates of market share and penetration rate to include these growing small-scale nursing homes:

Source: Respective company websites, Ministry of Health, Labor and Welfare, Angsana Anderson estimates

Instead of 38% of the market held by small-scale players or unpenetrated, we now have 83%.

This vast under-penetration provides strong growth potential.

Yet, the market doesn’t seem to fully recognise this. It is pricing Elan at only 13.5x NTM P/E.

Potential sale

In October 2024, M3, Inc. (2413 JP) acquired 55% of Elan. It paid JPY 1,040 per share. Today, Elan is trading at ~28% discount to the acquisition price.

In August 2026, Oasis Management raised its shareholding in M3 to 6.26%.2

The activist investor demanded M3:

• Transfer, acquisition or suspension of part of the business

• Significant change to dividend policy

Given the pressure, M3 may sell Elan to fund special dividends to its shareholders.

The synergy is not obvious. It’s almost 2 years after the acquisition. Yet, the company only got 116 contracts through M3’s distribution network. Elan has a total of 2,942 contracts.

Furthermore, Elan is not material. Its operating profits are only 6% of M3’s.

Interesting. Might be worth shortlisting for further research.

You haven’t talked much about their expansion into Vietnam through M&A.

Capex jumped in 2024 and 2025. Elan’s Vietnam subsidiary seems to be buying more equipment. Yet, in H1’26, Vietnam revenue declined -7% YoY.

I know Vietnam is only 3% of group revenue. But is there a risk that Elan continues throwing good money after bad?

Elan is capital-light. It outsources the laundry and other capital-intensive work, whereas its Vietnam subsidiary is capital-intensive.

If capex continues to increase and eats up a lot of free cash flow, 13.5x NTM P/E may not be that much of a bargain.

Please look into this.

Ok.

Coming up next

Stop following rules.

“Invest only in companies without debt. Low risk.”

“Never invest in companies with negative equity. Too risky.”

Rules like these will get you into trouble.

I will explain why 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 6099 JP, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

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

Siltronic AG (WAF GR)

About (31 Aug 2026)

Share price: EUR 79.00

Market capitalisation: EUR 2,370 mn (USD 2,754 mn)

Enterprise value (EV): EUR 3,356 mn (USD 3,899 mn)

Average daily volume (ADV): EUR 10 mn (USD 12 mn)

LTM P/B: 1.2x

We’ve talked before about the memory chip cycle, and how we are probably near the end of the shortage.

Where else can semiconductor investors look for opportunities?

Go upstream.

WAF is the world’s 4th largest semiconductor wafer maker.

While downstream players like Micron ( US) and SK Hynix (US) are enjoying shortages for many quarters already, WAF has only begun to see demand recovery.

Cyclical inflection?

Advance payments from customers has bottomed out at EUR 31 mn during Q4’25:

Demand seems to be recovering. Customers started pulling forward some orders, causing inventory days to fall in Q4’25:

Competitor GlobalWafers Co., Ltd. (6488 TT) reported +20% YoY revenue growth in July 2026:

Source: Globalwafers (2026)

Yet, sell-side consensus is expecting only +7% and -1% YoY revenue growth in Q3’26 and Q4’26.

Management reports volume recovery during the July 2026 earnings call:

Yes, volume-wise, we're doing extremely well. We see the loading progressing nicely…

Potential sale?

In 2020, GlobalWafers offered EUR 145 per share to take over WAF.

However, the deal fell through in January 2022. It failed to secure regulatory clearance from the German government.1

Such is the risk of cross-border M&A.

A takeover is not completely off the table. WAF’s largest shareholder, Wacker Chemie AG (WCH GR) has made public its desire to exit.2

If a suitable buyer approaches, a deal can likely be done. The German regulator will probably be more open to a European semiconductor player or PE firm.

Factors to focus on

1. Get more evidence on cyclical inflection

Tuas Limited (TUA AU)

About (31 Aug 2026)

Share price: AUD 2.05

Market capitalisation: AUD 1,124 mn (USD 806 mn)

Enterprise value (EV): AUD 587 mn (USD 421 mn)

Average daily volume (ADV): AUD 5 mn (USD 3 mn)

NTM P/E: 52x

My initial estimate suggests ~7% free cash flow yield on enterprise value. ~5% premium over Singapore 10y government bond yield. Looks attractive.

We talked about TUA before:

Good business, temporary headwinds: Despite smaller market share, TUA’s operating profit margin is 2x its competitor. The challenger telco is famous for their cost control.

IMDA, the regulator is investigating TUA over alleged unauthorised use of spectrum bands.

The worst case scenario looks manageable. The maximum fine will likely wipe out a year’s profits, but is only 4% of TUA’s cash.

Under-recognised growth: TUA has not moved into enterprise market yet.

I estimate enterprise customers can contribute an incremental revenue of SGD 25 mn. This will increase total revenue by ~15%.

Since my first take on TUA, the shares have fallen ~8%. No significant developments. It looks more attractive now.

Among all the ideas readers voted, TUA is the ‘best loser’.

I thought this deserves another chance.

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 Elan Corporation (6099 JP) this week. This was the idea you voted the most interesting in my previous email.

In 2024, M3, Inc. (2413 JP) acquired 55% of Elan. It paid JPY 1,040 per share. This is ~39% higher than the share price today.

In August 2026, activist investor Oasis Management demanded M3:

• Transfer, acquisition or suspension of part of the business

• Significant change to dividend policy

Given the pressure, M3 may sell Elan to fund special dividends to its shareholders.

Subscribe to get the analysis when I publish.

In case you missed it

Last week, I highlighted the opportunity I see in Nine Entertainment Co. Holdings Limited (NEC AU).

Netflix’s competitor in Australia and more, at only 10.7x P/E.

I showed how one small accounting change can fool analysts into thinking a company is much more profitable and cash-generative.

I highlighted two real companies with these issues.

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 TUA AU, either long or short. I hold shares in WAF GR. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

How to fix?

Easy. Just one small change to your accounting.

If you do this, you’ll show profits immediately. Free cash flow overflow. Investors will trample over one another to give you their money. Celebrity investors hail your name.

What’s that small change?

Start capitalising software costs

We talked about capitalisation of costs before. When you capitalise a cost, you exclude it from expense and include it as an asset.

If a physical retailer spends $2 mn to build a new warehouse, they are allowed to capitalise this cost as ‘property, plant and equipment’ on their balance sheet.

Software is the equivalent of ‘property, plant and equipment’ to an online retailer.

If an online retailer spends $2 mn to build new software, they are also allowed to capitalise this. Think of costs like the software engineer’s salary, consulting fees, etc.

But don’t stop there.

Capitalise as many costs as you can. There’s a lot of judgement involved in determining which costs are truly attributable to building the software.

If a software engineer splits their time between maintenance and building new software, how much of their salary gets capitalised?

Aggressive management can push these assumptions to the limit to understate expenses.

One stone, two birds.

You have removed huge costs from your expenses. You’re showing profits now.

Capitalisation boosts free cash flow too

Best of all, you’re showing huge free cash flow.

How come?

Because some investors still calculate free cash flow like this:

There are many problems with this. It doesn’t account for stock-based compensation, non-cash capex, etc. But that’s for another time.

For today, we will focus on capitalisation of software.

When you capitalise software costs, it shows up on the cash flow statement as ‘purchase of intangible assets’. Not ‘capex’.

That means, the formula above will completely miss this out.

Sounds simple. But I’ve lost count of how many times I’ve seen ‘analysts’ overestimate free cash flow like this.

Company A: Online Retailer in the UK

It’s normal to capitalise software costs.

But investors must understand how much capitalisation contributes to profits. They should pay attention when a company is profitable because of capitalisation.

Many investors saw this online retailer as a profitable cash flow generative high growth quality compounder (How many more glittering generalities can you fit in?).

But what they don’t realise is that, without capitalisation of software costs, Company A1 would be showing losses.

In 2017, Company A reported net profits. If it had not capitalised software costs, it would have reported net losses. Same story for other years.

After 2021, Company A slipped into losses. The share price fell off a cliff.

This is not a surprise to careful investors.

Company B: Technology company in Malaysia

Similar concerns at Company B:

The share price suddenly collapsed this year. Concerns over management quality.

Afterword

I want to be clear that I am not alleging accounting shenanigans at these two companies.

Rather, I want to highlight the importance of digging beneath the headline profit numbers.

Accounting quality usually reflects business and management quality.

Coming up next

Next week, I’ll be back with 2 to 3 more interesting ideas.

I’ll then analyse the most voted idea from my last post.

Right now, that’s Elan Corporation (6099 JP). B&M European Value Retail plc (BME LN) is the runner up.

Haven’t voted yet? Check out my last post: 2 Interesting Opportunities Again

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 the companies mentioned in this article, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

Notes

Last week, you highlighted a hidden asset and potential takeover in NEC. What’s your suggestion?

I suggest shortlisting NEC as a potential long.

Liquidity?

28 Aug 2026

Share price: AUD 0.97

Market capitalisation: AUD 1,537 mn (USD 1,101 mn)

Enterprise value (EV): AUD 3,115 mn (USD 2,231 mn)

Average daily volume (ADV): AUD 5 mn (USD 3 mn)

NTM P/E: 11x

What does NEC do?

NEC is Australia’s largest media group.

Source: NEC (2026)

Major assets in Broadcast TV are Channel 9 television network and 9Now streaming platform. They earn mostly advertising revenue.

Stan is Australia’s homegrown streaming service. It is the 4th largest in Australia, and growing fast.

Key assets in the Publishing segment include The Sydney Morning Herald (SMH) and The Australian Financial Review (AFR).

Publishing revenue mix has been shifting from advertising to subscription. In FY2026, 48% of Publishing revenue comes from subscription and 33% from advertising.

Streaming & Broadcast consists of Broadcast TV, Stan and 9Now.

Source: NEC (2026)

Hidden assets

The market thinks NEC is a melting ice cube. The company is trading at only 10.7x NTM P/E.

What’s your variant perception?

The challenges in the legacy TV and publishing business are obscuring NEC’s most valuable asset: Stan.

During FY2026, Stan grew revenue by 16% and EBITDA by 34% YoY. Stan started FY2027 on a positive note.1

If we apply Netflix’s ( US) multiple, Stan could be worth between AUD 1,900 mn to AUD 4,100 mn:

Source: NEC, NFLX, Angsana Anderson estimates

That’s a very wide range.

I believe EBITDA is the more appropriate multiple to value Stan.

Charlie Munger said EBITDA is BS earnings.

Source: Reddit (2024)

Yes, yes, I know EBITDA is not real profit. Depreciation and amortisation are real costs.

For a quick relative valuation, EBITDA will work. NEC does not disclose Stan’s EBIT separately. I can dig deeper when I prepare the full thesis.

Ok.

As I was saying, using revenue multiple is likely not appropriate.

Netflix’s revenue is more valuable. Netflix can turn each $1 of revenue into more profits because of its global scale. It has 325 mn subscribers2 vs Stan’s 2.3 mn3.

Netflix reported ~30% EBITDA margin. Stan? Only 14%.

The same argument applies for number of subscribers too.

That’s how I arrived at AUD 1,900 mn value for Stan, using EBITDA multiple.

Looks reasonable.

When NEC acquired Stan in 2018, they estimated AUD 475 mn fair value. Stan should be worth much more now.

During FY2024 AGM, an analyst suggested Stan can be worth more than the overall valuation for NEC. Market capitalisation at that time was ~ AUD 3,500 mn.

Are you too conservative?

I am not sure how that analyst estimated Stan’s value.

At this point, AUD 1,900 mn seems the most reasonable to me. I’ll refine it further later.

In any case, this much is clear: there’s a valuable asset hidden within NEC.

The analyst also asked management whether they can unlock the value through a spin-off.

Low probability.

NEC is integrating Stan with its other broadcasting assets like Channel 9. They now share the same leadership team.

In FY2026, Stan successfully premiered MAFS: After the Dinner Party, which was a spin-off of Channel 9’s hit Married at First Sight (MAFS).4

If there’s no value unlock, I am not interested. A hidden asset that remains hidden is just a value trap.

Wait. I’m not done yet.

I suspect a takeover. NEC’s largest shareholder has been gradually increasing its economic interest and voting power.

But first, I want to talk briefly about two under-recognised growth drivers.

Under-recognised growth

First, AI licensing revenue.

John Wiley & Sons, Inc. ( US), a journal publisher, saw its share price rally 85% this year.

During its March 2026 earnings call, management disclosed year-to-date AI licensing revenue already surpassed the prior year's total. By year-end, WLY had earned USD 49 mn AI licensing revenue.5

Although USD 49 mn is only 3% of total revenue, it is 17% of operating profits. WLY is licensing existing content. Most of the AI licensing fee will flow down into operating profits.

NEC only began licensing its content for AI in February 2026. In August 2026, management clarified that the AI licensing revenue so far is less than AUD 25 mn (1% of revenue).

But they have a good pipeline. Management did not rule out AI licensing revenue exceeding AUD 25 mn.

Second, I estimate the NBI will drive at least ~AUD 20 mn upside to revenue and operating profit.

In August 2026, Australia officially passed the News Bargaining Incentive (NBI) into law. This effectively forces social media platforms like Meta to pay Australian media outlets like NEC for their content.6

This is not something new.

Between 2021 and 2024, Meta had been paying these licensing fees. But in February 2024, it walked away.

The new law essentially compels Meta to return to paying the licensing fees.

I estimate NEC received ~ AUD 20 mn annual licensing fee from Meta under the previous agreement. Although this is less than 1% of FY2027 revenue, it will likely be ~ 7% of operating profit due to its high margins.

The upside in the first year will be even higher, because the law is backdated to 1 January 2025.

Takeover?

Why do you think a takeover is likely?

NEC’s largest shareholder has been gradually increasing its economic interest and voting power.

The WIN Group is an Australian regional media company.

It held 15% economic interest in November 2019, 18% in October 2022, and 25% in June 2024.

In February 2026, the WIN Group entered into swap transactions to increase its voting power from 20% to 23%. Its economic interest remained at 25%.

In April 2026, the WIN Group lifted its economic interest from 26% to 27%.

I suspect they may be preparing for a takeover.

Put yourself in the shoes of the largest shareholder. Why would you want to take NEC private?

Why not? The market is not fully recognising Stan’s hidden value and the group’s growth potential.

NEC looks like a bargain.

Interesting. Might be worth shortlisting for further research. What should we focus on in the full thesis?

Governance risks.

In October 2024, Intersection released an independent report on NEC. They found systemic abuse of power, bullying, discrimination and sexual harassment. They also found leaders had covered up misconduct.7

Although there have been leadership changes and it has been almost 2 years since the report, I believe it is still worthwhile to check and ensure the governance risks are acceptable.

Great. Go do that.

Coming up next

You’re an online fashion retailer. You’re running heavy losses and burning through cash. Investors won’t touch you with a ten-foot pole.

How to fix? You only need one small change to your accounting.

If you do this, you’ll show profits immediately. Free cash flow overflow. Investors will trample over one another to give you their money. Celebrity investors hail your name.

What’s that small change?

I will show you 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 NEC AU, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

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

B&M European Value Retail plc (BME LN)

About (26 Aug 2026)

Share price: GBP 2.46

Market capitalisation: GBP 2,470 mn (USD 3,357 mn)

Enterprise value (EV): GBP 4,574 mn (USD 6,216 mn)

Average daily volume (ADV): GBP 14 mn (USD 19 mn)

NTM P/E: 11x

I estimate 10% free cash flow yield on enterprise value. ~5% premium over UK 10y gilt. Looks attractive.

BME is one of the largest discount retailers in the UK.

Its largest segment, B&M UK accounts for 80% of its revenue with GBP 4,615 mn revenue across 799 stores.

Good business, temporary headwinds?

From mid-2024 to late-2025, BME’s share price fell almost -70%.

Negative same store sales. Inventory piled up. Gross profit margin (GPM) fell.

What’s going on?

When a retailer has the wrong inventory at the wrong prices, same store sales drop and inventory starts piling up.

The retailer has to cut prices until they clear out the excess inventory. Gross profit margins (GPM) suffer.

Once the retailer has cleared out the excess inventory, fixed the product range and prices, same store sales and GPM are ready to recover.

I suspect this is what’s happening at BME.

New CEO Tjeerd Jegen came in June 2025. The company started simplifying its product range and cutting excess inventory. To restore their reputation as a discount retailer, BME also cut prices on key products.

By March 2026, the company has restored inventory days to a healthy level again.

In FY2026 annual report, management quietly raised their expectations of GPM improvement and same store sales for B&M UK:

Source: BME (2026)

Yet, it looks like most investors are still pessimistic.

Sell-side consensus forecasts GPM to fall slightly over the next 3 years. They also expect revenue growth of only between 3.0% to 4.5% per year.

If BME achieves 3% same store sales, and continues increasing store count by 3% per year, the company can reach 6% annual revenue growth.

Factors to focus on

1. How sustainable is the recovery in same store sales and gross profit margins?

2. In the latest quarter, B&M UK same store sales turned negative. Management said this is because unusually warm weather led to strong garden sales last year. Is this reasonable?

Elan Corporation (6099 JP)

About (26 Aug 2026)

Share price: JPY 760

Market capitalisation: JPY 45,969 mn (USD 288 mn)

Enterprise value (EV): JPY 39,738 bn (USD 249 mn)

Average daily volume (ADV): JPY 68 mn (USD 0.4 mn)

NTM P/E: 14x

My initial estimate suggests ~9% free cash flow yield on enterprise value. ~6% premium over the Japan 10y government bond yield. Looks attractive.

Elan’s main product is the Care Support (CS) Set.

This provides daily necessities like pajamas, towels, diapers, and toiletries to hospitalised patients and nursing home residents.

Source: Elan (2026)

Revenue growth is driven by increasing penetration rate:

Source: Elan (2026)

Under-recognised growth?

Elan targets +15% annual revenue growth between 2026 and 2028. They expect to hit this target through ~10% organic growth and M&A.

This target looks reasonable. Elan remains underpenetrated in Japan.

As of H2’26, penetration rate is only ~26% compared to their long-term target of 41%. Achieving this target within the next 5 years would mean ~10% organic revenue growth per year.

Higher prices alone are contributing low-single digit revenue growth.

Elan introduced new premium services like lifte. This is the company’s proprietary brand of high-quality, original patient wear and gowns.

The adoption rate is growing fast from a low base:

Source: Elan (2026)

~9% FCF yield seems too cheap for a business that can grow at such levels.

Why would this opportunity exist?

Nobody’s looking. I can’t find any major sell-side coverage.

Potential sale?

In October 2024, M3, Inc. (2413 JP) acquired 55% of Elan. It paid JPY 1,040 per share. This is ~37% higher than today’s share price.

On 18 August 2026, activist investor Oasis Management raised its shareholding in M3 to 6.26%.1

Oasis demanded, among several things:

• Transfer, acquisition or suspension of part of the business

• Significant change to dividend policy

Given the pressure, M3 may sell Elan to fund special dividends to its shareholders.

Elan’s operating profits are only 6% of M3’s. The synergy is not obvious. It’s almost 2 years after the acquisition. Yet, the company only got 116 contracts through M3’s distribution network. Elan has a total of 2,830 contracts.

Factors to focus on

1. Probability of management achieving their revenue growth targets (organic and inorganic)

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 Nine Entertainment (NEC AU) this week. This was the idea you voted the most interesting in my previous email.

NEC owns Stan, Australia’s homegrown streaming service. This streaming service alone could be worth between AUD 1,600 mn and AUD 3,700 mn.

Yet, NEC trades at only AUD 1,656 mn. It still owns other assets like the Channel 9 television and major newspapers like The Sydney Morning Herald (SMH).

Maybe that’s why the largest shareholder is gradually increasing its stake. Potential takeover?

Subscribe to get the analysis when I publish.

In case you missed it

Last week, I highlighted the opportunity I am seeing in Genting Malaysia: Another Double-Bagger?

Revenue set to double by 2031. Hidden assets worth ~ 73% of market cap.

One of the smartest analysts I knew showed me how to gain forward-looking insights from accounting footnotes.

If NEL NO investors had paid attention to the property, plant and equipment footnote, they could have avoided a 90% loss.

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 6099 JP and 2413 JP, either long or short. I hold shares in BME LN. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

You went all-in. $1,000,000 of NEL NO. The world’s leading hydrogen technology company.

By the end of 2020, you have almost $6,000,000.

~150% return per year!

Quality compounder! Let’s launch a fund! (Cringe)

Today, you’re left with only $400,000.

93% drawdown.

This quality compounder has turned into a value trap! (Cringe again)

While management waxed lyrical about strong insatiable demand during Q4’20 earnings call, they buried damning clues inside their 2020 annual report.

If you had only paid attention to their accounting footnotes, you could have dodged a huge bullet.

Let’s dig in.

Nikola drove NEL’s rally

Pun very much intended.

The now-bankrupt hydrogen truck maker had grand plans to build a nationwide hydrogen fueling network in the US.

Nikola selected NEL as a primary equipment supplier, creating massive future revenue projections for NEL.

To meet ‘surging demand’, NEL started building a new factory at Herøya.

This was reported in the financial statements as additions to assets under construction during 2019 and 2020:

Source: NEL (2020)

The devil lies in the footnotes

What I missed out, and which was later pointed out to me by one of the smartest analysts I knew, was the impairment of assets under construction in 2020.

This was the damning clue:

Source: NEL (2020)

Many investors dismiss impairment. ‘Non-cash’ and ‘non-recurring’. Why bother?

But they are missing out on the serious implications. Management only impair assets when future demand deteriorates more than expected.

To oversimplify, impairment = asset cost - value in use1

Value in use = how much management forecasts the asset will earn over its useful life.

When future demand weakens more than expected, value in use falls below cost. That’s when management needs to impair the asset.

In management we trust?

Let’s return to NEL.

Starting late 2019, the company was ramping up construction of a major new factory.

In Q3’20, management impaired almost 10% of asset under construction.

Yet, during the Q4’20 earnings call, management boasted of a “strong order backlog, more than 90% up from the same quarter last year”

What would you do?

Coming up next

Next week, I’ll be back with 2 to 3 more interesting ideas.

I’ll then analyse the most voted idea from my last post.

Right now, that’s Nine Entertainment (NEC AU). Greggs plc (GRG LN) is the runner up.

Haven’t voted yet? Check out my last post: Yet Another 2 Interesting Opportunities

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 the companies mentioned in this article, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

Notes

GENM released Q2’26 earnings last Thursday 20 August. Net profit collapsed -93% YoY!

Yet, just 3 days before, you highlighted a potential opportunity in GENM.

Incompetent…

I suggest shortlisting GENM for further research. It is a potential 2x.

Didn’t you just hear what I said? Net profit fell -93%!

Public Investment Bank warned:

“The results came in below our and consensus estimates… visibility remains weak at this juncture given the uncertainty surrounding the health of the US economy.”1

Three things.

First, profits fell largely because of forex and startup costs at Genting New York (GENNY). Too much focus on a single quarter’s results is causing investors to underestimate GENNY’s growth.

Second, alternative data shows GENNY’s revenue growth accelerated in Q3’26.

Finally, I estimate GENM holds hidden assets worth ~73% of its market capitalisation or 30% of enterprise value.

Alright. I’ll hear you out.

Remind me: what’s the liquidity?

24 Aug 2026

Share price: MYR 1.70

Market capitalisation: MYR 9,635 mn (USD 2,384 mn)

Enterprise value (EV): MYR 22,874 mn (USD 5,659 mn)

Average daily volume (ADV): MYR 3 mn (USD 0.7 mn)

NTM P/E: 19x

What does GENM do?

GENM operates casinos.

It owns a casino monopoly in Malaysia. Resorts World Genting is a popular holiday spot for locals and Singaporeans. This makes up ~ 51% of total revenue in H1’26.

GENNY operates only one casino: Resorts World New York. I estimate GENNY accounted for ~29% of total revenue.

~14% revenue comes from the UK and Egypt, where GENM operates over 30 casinos.

Source: GENM

Just like any other casinos, gaming operations contribute ~ 75% of total revenue. The remaining 25% comes from hotel rooms, food and beverages and entertainment.

For the major casinos, can you break their revenue down into number of tables/slots, drop and win?

GENM does not disclose that, sadly. But even without that level of detail, we can still see the under-recognised growth.

Under-recognised growth

You say the consensus focused too much on the profit decline in Q2’26. Why are you not worried?

I am not worried. Profit fell in Q2’26 mainly because:

(A) MYR 129 mn gain on acquisition of a subsidiary in Q2’25 did not recur.

(B) Higher pre-operating expenses at GENNY

(C) USD depreciated against MYR last year. This created significant unrealised gain on USD borrowings. This did not recur.

Source: GENM (2026)

It’s natural for GENNY to make losses while it is ramping up operations.

GENNY received its full commercial casino license in December 2025. It launched its initial phase of full commercial casino operations ahead of schedule on 28 April 2026. 242 live tables alongside 2,500 slot machines.

Before the casino opens, you need to hire and train staff, etc. Utilisation rate will initially be low too. It takes time for customers to know about the new casino.

While GENNY ramps up, a better performance measure might be growth in revenue and gross profit?

Yes.

On that measure, GENNY is performing very well. Revenue growth accelerated in Q3’26.

Source: New York State Gaming Commission (2026)

Hold on. You said GENNY opened on 28 April 2026. Why are there data on revenue growth before April 2026?

Before 28 April 2026, GENNY operated a racino. No slot machines and live table games allowed.

I see. This chart gives a lot of visibility over revenue growth. Is this the alternative data you mentioned at the start?

Yes. GENNY submits revenue data to the regulator every week.

This data is useful. It has not reached consensus yet. I only know one sell-side research house that tracks this.

Surprising.

Great. How about the long-term growth potential?

An independent market study estimates GENNY will earn ~ USD 3,300 mn annual revenue by 2031, when all three casinos are fully operational.2

This translates into MYR 13,200 mn incremental revenue from GENNY. For context, GENM’s total revenue was only MYR 11,884 mn in 2025.

Here’s another way to look at this.

Fitch estimates that by 2028, GENNY will increase GENM’s EBITDA by almost +45%.3

However, consensus seems to have not fully recognised this growth potential. Sell-side forecasts EBITDA in 2028 will only be ~ 14% higher.

Nice. But isn’t leverage quite high?

GENM generates ~ MYR 2 bn operating cash flow every year. Over the next 5 years, it still has ~ MYR 2 bn annual capital expenditure for GENNY. Net debt is already high at ~ MYR 14 bn.

Financial leverage looks high, but it is actually not that high.

GENM’s investment properties are worth MYR 9 bn but the company only reports MYR 2 bn. This hidden value of MYR 7,042 mn is ~ 73% of today’s market capitalisation and ~ 30% of enterprise value.

Source: GENM (2025)

The largest and most valuable portion is located in Miami, Florida.

These include 1 Herald Plaza, a vacant waterfront development site of ~ 246,390 sq. ft. It is also the former site of the Miami Herald building.

If required, GENM can raise additional cash by selling these properties. In fact, in 2023, it did try to sell four parcels of vacant land in Miami for USD 1.2 bn. But the deal eventually fell through.

Potential privatisation

In October 2025, parent Genting Berhad (GENT MK), offered MYR 2.35 per share to acquire all remaining shares it did not already own.

Why did the privatisation fail?

Independent advisor Kenanga Group assessed fair value between MYR 3.48 and MYR 3.77.

While GENT successfully increased its stake from approximately 49.3% to 73.8%, it did not receive enough acceptances from shareholders to reach the regulatory thresholds required for delisting (75%) and compulsory acquisition (90%).

There are signs that GENT may try again later this year.

The New York State Gaming Facility Location Board seems concerned over GENT’s apparent lack of control over GENM:

While Genting Berhad (GENT), Genting Malaysia Berhad (GENM), and Lim family trusts have historically supported U.S. Resorts World projects with capital and credit enhancements, GENT reportedly lacks legal authority to influence management or operations of the proposed facility [GENNY].4

Could this scenario be true: GENT has no intention of privatising GENM, but it made the offer in October 2025 to cement its control?

If GENT simply wanted >50% ownership, it could have just bought more shares on the market.

Prior to the offer, GENT held a 49.36% stake in GENM (which rose to 49.999% just before the offer through open-market purchases).

GENT launched an unconditional voluntary take-offer. This suggests they intend to privatise GENM.

I doubt GENT can privatise GENM by itself. GENT already has so much debt. Net debt ~ MYR 29 bn vs operating cash flow of only ~ MYR 6 bn.

If GENT offers MYR 3.50 per GENM share, its net debt will increase by almost 70%!

Yes. GENT will likely have to rely on other sources of funding. Perhaps partnering with a private equity firm?

Regardless of financing, there are signs that the new CEO is keen.

“It is a time to pause and rethink what can be done next,” CEO Tan said. “We have the capability to advance the plan to the next stage within a year.”5

If there’s another attempt, it can only happen from December 2026.

Malaysia’s law prohibits GENM from making another attempt within 12 months from the date the offer failed (1 December 2025).

Interesting. Might be worth shortlisting for further research. What should we focus on in the full thesis?

Model GENNY’s revenue and capex until it becomes fully operational in 2031.

Will it generate enough cash to complete its capex? How much more debt will GENM need to take on?

We already know how many tables and slots they have opened, what’s their target over the next few years. Thanks to regulatory data, we also know the drop and gross gaming revenue (GGR) per table every week.6

Shouldn’t be too difficult.

Also, my preliminary research suggests little concern from the Empire Resorts acquisition and RAV Bahamas litigation. But I’ll finish my work on this and update you in the full thesis.

Great. Go do that.

Coming up next

“Accounting is useless. Backward-looking”

That’s the sentiment among many investors.

But my regular readers know that we can glean forward-looking information from public accounting data.

Example: Consensus expects Bumble ( US)’s revenue to return to growth by 2028. This contradicts management’s own expectations. The accounting footnote on goodwill impairment revealed that management expects 0% terminal growth.

What other forward-looking insights can we glean from the accounting footnotes?

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 GENM MK, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

Regular readers may ask, “Why only 2? Previously, you said 3 every week.”

The short answer: I abandoned an idea in Japan. Why? I will explain at the end.

To maintain flexibility, let’s switch to ‘2 to 3 ideas every Monday’. I don’t want to squeeze in a low-quality idea just to hit 3.

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

Nine Entertainment Co. Holdings Limited (NEC AU)

About (21 Aug 2026)

Share price: AUD 0.97

Market capitalisation: AUD1,529 mn (USD 1,097 mn)

Enterprise value (EV): AUD 1,644 mn (USD 1,179 mn)

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

NTM P/E: 10x

My initial estimate suggests ~14% free cash flow yield on enterprise value. ~9% premium over the Australian 10y government bond yield. Looks attractive.

NEC is Australia's largest media group.

It owns the Channel 9 television, major newspapers like The Sydney Morning Herald (SMH) and The Australian Financial Review (AFR).

During 2024, NEC’s share price collapsed. A toxic workplace culture scandal led to the departure of the news director, Chairman and CEO.

By early 2025, new management took over and stabilised operations. The share price rallied further after NEC sold its stake in Domain at a 60% premium.

It looks like today’s share price still has not fully reflected NEC’s most valuable asset.

Hidden asset?

NEC looks like a dying business. In H1’26, its revenue declined -5% YoY.

It is priced like a dying business. 10x NTM P/E.

But it is not a dying business.

NEC owns Stan, Australia’s homegrown streaming service. It is the 4th largest in Australia, and growing fast.

In H1’26, Stan grew revenue +15% YoY and EBITDA +24% YoY.

Time for napkin math.

Netflix, Inc. ( US) trades at 23x LTM EV/EBITDA and 7x LTM EV/Revenue.

If we apply these multiples to Stan, this streaming service alone could be worth between AUD 1,600 mn and AUD 3,700 mn.

Of course, Stan is smaller than Netflix. But it is growing just as fast. We’ll refine our estimates later. For now, let’s just use the low end.

At the low end, Stan alone is worth about NEC’s enterprise value today (AUD 1,644 mn).

Will this hidden asset remain hidden?

Management has shown that they are reasonable capital allocators.

In 2025, NEC sold its 60% stake in Domain at a 60% premium to CoStar Group, Inc. ( US) . Domain is one of Australia’s most popular real estate websites.

NEC then returned most of the windfall to shareholders through a big special dividend.

Yet, the consensus seems to have ignored this hidden asset.

It’s easy to dismiss NEC. Traditional media companies suffer secular decline. NEC’s largest segment, Television, is no exception.

During H1’26, Television revenue declined -14% YoY. This obscured Stan’s +15% revenue growth, causing group revenue to decline -5%.

That’s probably why this opportunity exists.

Takeover?

NEC’s largest shareholder has been gradually increasing its economic interest and voting power.

The WIN Group is an Australian regional media company.

It held 15% economic interest in November 2019, 18% in October 2022, and 25% in June 2024.

In February 2026, the WIN Group entered into swap transactions to increase its voting power from 20% to 23%. Its economic interest remained at 25%.1

In April 2026, the WIN Group lifted its economic interest from 26% to 27%.2

Factors to focus on

1. Growth potential at Stan? How much will it be worth to a private buyer?

Greggs plc (GRG LN)

About (21 Aug 2026)

Share price: GBP 18.38

Market capitalisation: GBP 1,874 mn (USD 2,557 mn)

Enterprise value (EV): GBP 2,312 mn (USD 3,156 mn)

Average daily volume (ADV): GBP 8 mn (USD 11 mn)

NTM P/E: 14x

I estimate 9% free cash flow yield on enterprise value. ~4% premium over UK 10y gilt. Looks attractive.

GRG is the top food-on-the-go retailer in the UK. It is best known for its sausage rolls, pastries, sandwiches, and coffee.

How one customer describe GRG:

Is it gourmet food? No.

Is it the best tasting food I’ve ever eaten? No…

Is it consistent, cheap, and available pretty much wherever I happen to be in the UK? Yes.3

Through 2025, the shares tumbled. Investors worry over slowing growth.

Like-for-like (LFL) sales growth decelerated to +2.4%, down from +5.5% in 2024. It looks like the UK has hit ‘peak Greggs’.4

How many more sausage rolls can the Brits eat?

Under-recognised growth?

Peak Greggs still looks far away.

The first indication came on 29 July 2026. H1’26 earnings exceeded expectations. Revenue grew +7% YoY. Profit before tax (PBT) grew 20% YoY.

Store cannibalisation?

No strong evidence yet. Despite growing store count by 1%, LFL sales growth remained stable at +2%.

No more whitespace?

Greggs is rolling out smaller store formats to reach underpenetrated areas. They call it Bitesize Greggs.

This just allows us to infill in areas that previously we didn't think we could put a site…

They are doing exceptionally well. From a sales perspective, they take very slightly less than an average full-sized shop. Not significantly, but very slightly.

And the returns currently are very good. What I would caveat it with is we've only got 4.

• GRG CEO Roisin Currie5

Capital returns?

GRG just passed peak capex:

Source: GRG (2026)

Management committed to returning surplus cash:

Source: GRG (2026)

Silchester International owns ~5% of GRG.

This UK fund manager is known as a ‘quiet activist’. It prefers to engage with management privately. However, in extreme cases, Silchester may go public with its demands.6

Whatever the methods, Silchester’s priority seems to be getting companies to optimise capital allocation and pay out more to shareholders.

I wouldn’t be surprised if GRG announces more special dividends and/or buybacks.

Factors to focus on

1. Growth potential from Bitesize Greggs and wholesale to grocery partners?

2. Overseas growth opportunity?

   1. GRG just opened a franchise store at Tenerife, targeting British tourists.

   2. Management sounded pleasantly surprised at how well the locals have taken to the sausage rolls too.

Leopalace21 Corporation (8848 JP)

I abandoned this idea.

At first glance, it looks like a bargain. 8x NTM P/E. 21% free cash flow yield on enterprise value.

Leopalace21 is like WeWork, but for residential apartments. It enters into a master lease with an apartment owner, and then subleases the individual units. Most customers are corporate clients looking for worker housing.

Why did I abandon this idea?

Leopalace21 runs a highly leveraged business model, both financially and operationally. I will be surprised if it can sustainably trade above single-digit P/E.

Furthermore, the 21% FCF yield is not real. The true yield is much much lower.

Japan accounting standards (JGAAP) still do not require companies to bring leases onto their balance sheet. This will only start from April 2027.

That said, Leopalace is a potential takeover target.

In June 2026, Warburg Pincus bought Leopalace’s peer, J.S.B.Co.,Ltd. (3480 JP). The PE firm offered a 172% premium over its undisturbed share price.

There will likely be more deals.

In 2024, Warburg Pincus hired a former Goldman Sachs banker as head of Japan and co-head of Asia real ​estate. In 2025, Warburg Pincus opened its Tokyo office.7

Hikari Tsushin, Inc. (9435 JP) is a major shareholder in both Leopalace21 and J.S.B.

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 Genting Malaysia Berhad (GENM MK) this week. This was the idea you voted the most interesting in my previous email.

GENM owns a casino monopoly in Malaysia (63% of revenue).

In December 2025, GENM won one of the only three New York full commercial casino licenses. Yet, investors seem to have ignored this growth opportunity.

But not its parent. In October 2025, parent Genting Berhad (GENT MK), offered MYR 2.35 per share to acquire all remaining shares it did not already own.

This ultimately failed.

Independent advisor Kenanga Group deemed the offer not fair and not reasonable. They assessed fair value between MYR 3.48 and MYR 3.77.

Today, GENM is trading at only MYR 1.70

Subscribe to get the analysis when I publish.

In case you missed it

Last week, I highlighted the opportunity I am seeing in NICE: Korea’s Largest Credit Bureau at 9x P/E.

On 29 September 2014, Hua Han reported earnings per share (EPS) grew by a whopping +40%.

Its share price surged to all-time highs.

Two years later, the Hong Kong Stock Exchange (HKEX) suspended trading in Hua Han shares.

Shareholders were wiped out.

In this post-mortem, I highlight the big red flag hidden in Hua Han’s financial statement:

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 NEC AU and GRG LN, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

Its share price surged to all-time highs.

Two years later, the Hong Kong Stock Exchange (HKEX) suspended trading in Hua Han shares.

Shareholders were wiped out.

Source: Webb-Site (2026)

Turns out, Hua Han faked its EPS.

What were the red flags?

Many. I want to focus on the biggest: unusually high construction-in-progress (CIP).

CIP refers to the portion of property, plant and equipment (PPE) that is still under construction. Think of half-built factories and hospitals.

In the chart below, I plotted the % of PPE that is still under construction. Blue for Hua Han, orange for China TCM, its peer.

Source: Company annual reports

Imagine you were looking at this chart on 29 September 2014, after Hua Han reported its stellar earnings. What questions should you ask?

First, why is the % of PPE under construction so high?

Over the past 10 years, it significantly exceeded its peer, China TCM.

The % reached as high as 40% in 2009 and 2010. This is unusually high. For context, even in the midst of a big semiconductor boom, Samsung Electronics’ CIP reached only 28% of total PPE in Q1’26.

In 2014, why did Hua Han construct more PPE? China TCM reduced their % of PPE under construction.

Given that both operate in the same industry, they face similar demand. Their capacity expansion plans should not differ too much.

Hide the fake profits in construction-in-progress

In September 2016, Zhongkui Research published a short report on Hua Han:

“We have found that Hua Han has significantly inflated their capex to balance the cash fabricated from their inflated revenue…”1

Hua Han faked its EPS by inflating revenue.

When you inflate revenue, you also inflate receivables. There are few things that attract more attention from auditors and investors than surging receivables.

When I was an auditor, my audit partner always asked the same thing before he signs off on a financial statement: “Has the company collected all receivables after the year-end?”

So, when you fake revenue, you need to get rid of the resulting receivables.

How about faking the collection of these receivables? You’ll collect fake cash. That’s also difficult to get past the auditors.

Auditors almost always get direct confirmation of your cash balance from your bank. During my audit training, I was specifically instructed to never allow the audit client to pass me the bank confirmation, lest they tamper with it.

How about construction-in-progress?

Ah, that’s one of the best places to park fake cash. Inflate revenue, collect the fake receivables, use the fake cash to buy equipment, building materials, etc. at inflated prices. How will the poor auditor know that this equipment is worth HKD 10 mn, not HKD 50 mn?

That’s what Hua Han did.

Afterword

“Accounting is useless”

That’s the common thinking among investors. I can understand the sentiment.

After all, accounting is public information. Everyone opens the same annual report and sees the same things. There’s no edge.

I hope this Hua Han case study shows otherwise.

If this is not convincing enough, I’ve saved my best argument for the end:

Everyone knows how to get fit:

Eat less, run more.

But why isn’t everyone fit?

Coming up next

Next week, I’ll be back with 2 to 3 more interesting ideas.

I’ll then analyse the most voted idea from my last post.

Right now, that’s Genting Malaysia Berhad (GENM MK). Tuas Limited (TUA AU) is the runner up.

Haven’t voted yet? Check out my last post: 3 more interesting opportunities

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

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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 the companies mentioned in this article, 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 NICE, South Korea’s top credit bureau. Can we even buy it?

Interactive Brokers (IBKR) just opened trading access to the Korea Exchange (KRX) this year.

Very nice. What is your recommendation?

I recommend shortlisting NICE for further research.

But I assign this lower priority than CTOS Digital Berhad (CTOS MK).

Why lower priority?

There is a case for under-recognised growth, but it is not as strong as I first thought…

Before you continue, remind me again, what does NICE do?

NICE is the top credit bureau in South Korea.

The core business involves collecting data on borrowers, both individuals and corporations, and processing it into credit scores.

Its personal credit score holds ~70% market share in South Korea. NICE is also the largest player in the corporate segment, with ~ 34% market share.

Customers include major banks, insurers, telcos, etc. No single customer accounts for more than 10% of total revenue.

Although it just received a license to operate in Vietnam1, almost all revenue still comes from South Korea.

Here’s the revenue breakdown for the first 6 months of 2026:

Source: NICE (2026)

Are the shares liquid enough?

18 Aug 2026

Share price: KRW 15,350

Market capitalisation: KRW 898 bn (USD 635 mn)

Enterprise value (EV): KRW 756 bn (USD 535 mn)

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

NTM P/E: 9x

Between 2021 and 2023, why did NICE’s total return fall? What drove the subsequent recovery?

The short answer: revenue growth.

Between 2021 and 2023, revenue growth decelerated. It started recovering from 2024 onwards.

We’ll discuss the details later.

Ok.

Under-recognised growth

Going back to the original question: why do you think the under-recognised growth is not as strong as you initially expected?

At first, I thought the core business could grow at mid-single digit (MSD) over the long-term. Now, I believe a more realistic growth rate lies around low-single digit (LSD).

Let me first explain the main driver of revenue growth.

The core business (Information, Digital and Evaluation) makes up ~80% of group revenue. Their revenue is largely driven by change in loan volume. When banks give out more loans, they demand more NICE credit reports.

Data on loan volume is difficult to get. So, let’s use South Korea Household Credit as proxy.

Source: ECOS (2026); Tikr

By and large, NICE’s revenue growth ‘hugs’ growth in household credit.

Revenue growth starts diverging in 2024. That’s mainly because of acquisitions. In February 2024, NICE acquired NICE P&I, a valuation firm. In May 2024, NICE acquired 2 advertising agencies: Eins Media and Well Communications.

Without these acquisitions, revenue would have grown by only +6% in 2024.

As you can see, after the boost from acquisitions, revenue growth started converging back towards household credit growth.

So, if we know how household credit will grow, we’ll roughly know how NICE’s revenue will grow?

Exactly.

Household credit grew +4% YoY in H1’26. For H2’26, growth should be less than +3%. The Financial Services Commission (FSC), South Korea’s financial regulator, targets +3% growth for 2026.2

The FSC also maintained its goal of stabilising the household debt-to-GDP ratio at around 80% by 2030. In Q1’26, this ratio was around 85.3%.3

To achieve this goal, I estimate the FSC will need to slow down household credit growth to low-single digits, between +1% and +2%.

That’s essentially why I believe revenue growth at NICE will likely decelerate to LSD.

Can advertising help accelerate revenue growth? Previously, you said that the new law in 2020 allows NICE to sell its credit data to advertisers.

Advertising looked promising. After all, global peer Experian plc (EXPN LN) earns up to 20% of its revenue from advertising and other services.

Today, advertising contributes ~4% to NICE’s group revenue. If this % increases to 20%, this would mean an incremental KRW 118 bn revenue. This would be a +20% increase from the revenue earned in 2025.

Things look very promising. In H1’26, NICE’s Advertising Agency segment grew revenue by +17% YoY.

However, I am not very confident.

The H1’26 footnotes reveal that most of the growth was driven by the acquisition of J-Bridge in July 2025.4 Without this acquisition, Advertising Agency revenue would have grown by only +1% YoY.

How about Vietnam? In May 2026, the State Bank of Vietnam issued a license for credit information service to NICE.

This is the main reason why I have not passed on NICE. Vietnam has the potential to exceed expectations.

Source: NICE (2026)

Vietnam’s credit market shows strong growth, mid-teens to high-teens. That said, I expect competition to be fierce. NICE is the 4th private credit bureau to enter the market.

NICE will officially begin operations in Vietnam in the first half of 2027.5

Let’s see how it performs.

I propose coming back to NICE after we complete the thesis for CTOS.

It’s easier to make a case for under-recognised growth and capital returns for CTOS. Plus, there’s a takeover catalyst. I suspect the major shareholder is looking to sell the business for 2x today’s price.

Coming up next

Previously, we talked about how working capital trends can help us understand future demand.

When demand is recovering, raw materials grow faster than finished goods. We saw how this is a good leading indicator of revenue growth at SK Hynix.

When China Evergrande started facing weak demand and cash flow issues, it started delaying payments to suppliers. This showed up in unusually long and rising payable days.

Could we also get useful insights from a detailed analysis of property, plant and equipment?

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 030190 KS, 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.

A quick review

Thursday 6 August, I highlighted the potential for more capital returns at Nexon: 11% FCF Yield, Zero Debt, and a Potential Tencent Takeover.

Good news: Last Thursday 13 August, the Korean video game maker declared a big special dividend. This brings total dividends in 2026 to ~20% yield.

Nexon’s share price jumped > +25%.

But this is not a happy story. I have not bought any shares because I was still completing my thesis. This is a repeat of PayPal (PYPL US).

Sad!

What do I do? I’ll need to make my process even more efficient.

At the same time, as I shared with a reader, a big risk is I turn greedy and take shortcuts. I’ve seen someone blow up like that.

Finally, what’s the potential technical lesson here?

When new management takes over a cash-rich company, watch for changes in the company’s attitude towards cash.

When I shortlisted Nexon, I shared my observation from their 2026 capital markets day:

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”.

Enough talk. Let’s move on to the 3 interesting opportunities.

Genting Malaysia Berhad (GENM MK)

About (14 Aug 2026)

Share price: MYR 1.77

Market capitalisation: MYR 10,032 mn (USD 2,455 mn)

Enterprise value (EV): MYR 21,936 mn (USD 5,369 mn)

Average daily volume (ADV): MYR 3 mn (USD 1 mn)

NTM P/E: 19x

GENM owns a casino monopoly in Malaysia (63% of revenue). It also operates casinos in the US & Bahamas (19%) and the UK (18%).

My initial estimate suggests at least ~ 8% free cash flow yield on EV.

Considering its above-average growth potential, this is an attractive premium of ~ 4% over Malaysia 10y government bond.

Under-recognised growth?

In December 2025, GENM won one of the only three New York full commercial casino licenses.

Because it already has a racino in New York, GENM was able to quickly introduce live table games and commercial slots by April 2026. The other two licensees have to build their casinos from scratch.

GENM will effectively have a casino monopoly in New York City until around 2030. Fitch estimates that by 2028, New York will increase EBITDA by more than 50%.1

However, consensus seems to have not fully recognised this growth potential. Sell-side forecasts EBITDA in 2028 will only be ~ 12% higher.

Privatisation?

In October 2025, parent Genting Berhad (GENT MK), offered MYR 2.35 per share to acquire all remaining shares it did not already own.

Independent advisor Kenanga Group deemed the offer not fair and not reasonable. It did not account for the potential upside of the New York license bid. They assessed fair value between MYR 3.48 and MYR 3.77.2

While GENT successfully increased its stake from approximately 49.3% to 73.8%, it did not receive enough acceptances from shareholders to reach the regulatory thresholds required for delisting (75%) and compulsory acquisition (90%).3

There are signs that GENT may try again later this year.

“It is a time to pause and rethink what can be done next,” CEO Tan said. “We have the capability to advance the plan to the next stage within a year.”4

If there’s another attempt, it can only happen from December 2026.

Malaysia’s law prohibits GENM from making another attempt within 12 months from the date the offer failed (1 December 2025).5

Factors to focus on

1. More details on the growth potential in New York?

2. How much financial headroom does GENT have for another privatisation attempt?

3. Empire Resorts controversy?

4. How big is the potential exposure from RAV Bahamas litigation?

Tuas Limited (TUA AU)

About (14 Aug 2026)

Share price: AUD 2.22

Market capitalisation: AUD 1,217 mn (USD 862 mn)

Enterprise value (EV): AUD 680 mn (USD 482 mn)

Average daily volume (ADV): AUD 8 mn (USD 5 mn)

NTM P/E: 55x

TUA owns Simba Telecom, Singapore’s 4th telco.

Its share price had a good run. Investors were anticipating big gains from its proposed acquisition of M1, Singapore’s third largest telco.

That all fell apart in May 2026.

IMDA, Singapore’s telco regulator, launched an investigation into Simba Telecom over alleged unauthorised use of spectrum bands. The acquisition fell through. Share price plunged -60% in a day.

Good business, temporary headwinds?

IMDA’s investigation is still ongoing.

We don’t have any precedent to work with. In Singapore, there had been no previous cases of telcos using spectrum that had not been assigned to them.6

But I will be surprised if IMDA revokes Simba’s license.

That would defeat the regulator’s goal of introducing more competition. If there is indeed unauthorised use, I suspect the more likely outcome is a fine.

Under the Telecommunications Act 1999, IMDA can impose a financial penalty of SGD 1 mn or up to 10 per cent of Simba’s annual turnover, whichever is higher.7

This means we could be looking at a fine of up to SGD 17 mn. This will wipe out a year’s profits, but is only 4% of TUA’s cash.

In any case, all these worries overshadow TUA’s good business.

Compared to StarHub Ltd (CC3, STH SP), Singapore’s 2nd largest telco, TUA has much smaller market share.

Source: TUA (2026)

Despite that, TUA’s operating profit margins (OPM) far exceed StarHub’s. In the last twelve months (LTM), it reported 10% OPM vs. StarHub’s 5%.

TUA is the low-cost producer.

Under-recognised growth?

TUA earns almost all its revenue from consumers. It wanted M1 because it’ll give Simba instant access to enterprise customers.

With the deal now scrapped, TUA will have to build its enterprise revenue from scratch. This will take time. But the fact remains that TUA, being the low cost producer, has significant growth potential in enterprise.

M1 earns ~13% of its revenue from enterprise customers, across both mobile and broadband.8

If TUA’s revenue profile eventually converges towards M1’s, I estimate enterprise will contribute an incremental revenue of SGD 25 mn. This will increase total revenue by ~15%.

Factors to focus on

1. Growth potential from broadband and enterprise customers?

2. How much more market share can TUA take?

   1. Reviews indicate Simba’s network still suffers from some dead zones, making some consumers reluctant to switch despite the steep discount to incumbents.

      However, recent reviews suggest Simba is aggressively addressing these coverage gaps. Anecdotally, a family member uses the network and seems satisfied.

3. How much more capex will TUA need?

   1. DBS estimates spectrum constraints combined with higher cybersecurity compliance capex might turn Simba’s free cash flow negative9

CAB Payments Holdings plc (CABP LN)

About (14 Aug 2026)

Share price: GBP 0.81

Market capitalisation: GBP 206 mn (USD 278 mn)

Enterprise value (EV): Not meaningful for a bank

Average daily volume (ADV): GBP 0.2 mn (USD 0.2 mn)

NTM P/E: 9x

CABP specialises in business-to-business (B2B) cross-border payments and foreign exchange (~ 70% of revenue).

Capital returns?

On 6 Aug 2026, CABP announced its first interim dividend at ~40% of adjusted profit after tax during H1’26.

There is potential for more capital returns.

CET1 ratio in H1’26 reached 21.7%. This significantly exceeds CABP’s medium term target of between 16.5% and 17.5%.10

The board has committed to returning remaining surplus above the target CET1 range, through share buybacks and /or special dividends.

Potential sale at a higher price?

On 9 April 2026, StoneX Group Inc. ( US) offered GBP 1.10 per share to acquire CABP.

However, the deal collapsed after Helios refused to back the bid. Helios is a private equity fund holding ~ 45% stake in CABP.

Helios likely saw the SNEX bid as an undervaluation. Yet, having held CABP for nearly a decade, the fund is well past the typical private equity holding period and has a strong incentive to exit.

If a suitor emerges with a better offer, I suspect Helios will be highly motivated to sell.

Factors to focus on

1. Helios offered USD 1.15 per share (~GBP 0.85) to take CABP private. For now, the independent board has rejected this.11

   Is there a risk that CABP is taken private at an unreasonably low valuation?

2. Estimate how much more capital returns CABP can make before its CET1 ratio reaches its medium-term target

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 NICE Information Service Co., Ltd. (030190 KS) this week. This was the idea you voted the most interesting in my previous email.

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

At 9x NTM P/E and 10% FCF yield, the market seems to be ignoring its growth potential, especially in advertising and Vietnam.

Subscribe to get the analysis when I publish.

In case you missed it

Last week, I highlighted the opportunity I am seeing in CTOS Digital: 7% FCF Yield, Potential 2x Buyout Target, Insider Buying.

I also highlighted 3 red flags many bulls miss in Shift4 ( US):

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 GENM MK, TUA AU and CABP LN, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References

20% revenue growth over the next 2 years. Only 7x P/E.

What a bargain!

But why are so many investors betting against Shift4 Payments, Inc. ( US)?

27% of float shorted!

FOUR’s 10-K reveals 3 critical questions the bulls missed.

Why is FOUR acquiring its distributors so aggressively?

FOUR paid USD 318 mn to acquire intangible assets in 2022. This was more than 10x in 2021.

My eyes widened. Whenever there are big movements in capitalisation or acquisition of intangible assets, it’s worth investigating.

The bulk of it, USD 276 mn, was spent on residual commission buyouts.

What’s that?

Turns out, Blue Orca has already beaten me to it. I won’t repeat the details of their report, but will simply highlight the key point here.

Oversimplified: FOUR pays its distributors a lump sum today to avoid paying recurring commission expense in the future. FOUR records this lump sum today as an intangible asset: residual commission buyouts.

What’s the financial impact?

Essentially, FOUR transformed cost of sales expense (recurring commission expense) into amortisation expense. This boosts its adjusted EBITDA, a key performance indicator (KPI).

Blue Orca estimated:

On the accounting benefit of these deals alone, Shift4, we estimate, was able to turn what would have been a $5.8 million Adj. EBITDA miss into a $12.5 million Adj. EBITDA beat.1

Why is FOUR capitalising more costs?

Cash paid for intangible assets jumped again, in 2025.

The bulk of it, USD 99 mn, relates to capitalised software development costs. This represents cash paid to software engineers for the development of internal software. Instead of expensing their salaries, FOUR capitalised them as an intangible asset.

Capitalised software development costs are surging.

Source: FOUR 10-K

Capitalisation during the first half of 2026 almost exceeds the amount in the whole of 2024.

Yet, I could not find details of any major internal software projects.

If anyone knows the business reason behind this surge, let me know in the comments.

Why are customer advance payments falling?

FOUR charges customers in advance for “various post-contract license support and service fees”. The company’s accountants call this “deferred revenue”.

Like biologists, accountants are terrible at naming things (Parastratiosphecomyia stratiosphecomyioides is a tiny, wasp-mimicking soldier fly found in Southeast Asia).

Instead of deferred revenue, let’s just call this advance payment from customers or customer advance payments.

Customer advance payments are small. Only 0.20% of total assets.

That makes sense. The bulk of FOUR’s revenue comes not from post-contract license support and service fees, but from payment processing fees charged as a percentage of the customers’ transaction volume.

But it is the trend in customer advance payment that I am more interested in.

Fewer contracts → lower post-contract license support and service fees → falling customer advance payments

Source: FOUR 10-K

This clashes with sell-side forecasts. They expect revenue growth of 23% this year, +14% in 2027 and +12% in 2028.

Of course, mergers and acquisitions (M&A) is part of FOUR’s growth story. But with a BB credit rating2, I wonder how much more M&A capacity they have, without diluting shareholders.

Why not short?

I am not making a short pitch here.

I initially approached this as a potential long, but found important questions missed by many investors and “deep dives” on Substack.

I thought sharing these questions would be helpful. If you have important information that can help change my mind, let me know.

I would be scared to short

27% of float shorted. This suggests many investors believe FOUR is a good short. But this also makes it a less attractive short. Higher risk of short squeeze, higher borrowing costs, etc.

Finally, there’s also the risk of a potential takeover or sale.

In February 2026, founder Jared Isaacman waived his tax receivable agreement (TRA) rights. In exchange, he received cash and preferred stock.

Without going too much into the technicalities, the TRA is essentially a debt that FOUR has to repay to its pre-IPO owners (Isaacman and Searchlight Capital) when it starts earning taxable profits.

TRA waiver usually happens when the company is preparing to sell itself. Without a waiver, buyers will balk at the high TRA payments.

We saw that with Bumble (BMBL US).

In Nov 2025, Blackstone and BMBL founder Whitney waived all their TRA in return for a significantly smaller cash payment upfront. In Jun 2026, Reuters reported BMBL is exploring a sale.3

Note: Searchlight Capital has not yet waived its TRA rights.

TLDR

FOUR looks like a bargain: 20% revenue growth. 7x P/E.

But 27% of float is shorted.

Unless I can resolve these questions, I prefer to watch on the sidelines:

1. Why is FOUR acquiring its distributors so aggressively?

2. Why is FOUR capitalising more costs?

3. Why are customer advance payments falling?

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.

Right now, that’s NICE Information Service Co., Ltd. (030190 KS).

LKQ Corporation (LKQ US) is the close runner up. Only 1 vote behind NICE.

Haven’t voted yet? Check out my last post: 3 interesting opportunities

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

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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 FOUR 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 CTOS Digital Berhad (CTOS MK). What have you learnt since then?

I recommend shortlisting CTOS for further research.

2 reasons:

1. Under-recognised growth

2. Capital returns

Catalyst?

Within the next 5 years, the single largest shareholder will probably sell CTOS at > MYR 1.35 per share.

Interesting. Remind me again, what does CTOS do?

CTOS is the top credit bureau in Malaysia.

It buys loan repayment data and combines it with other data like bill repayment history to develop a credit score for individuals and companies.

Customers include major banks, insurers, telcos (financial institutions & corporates) as well as SMEs involved in manufacturing, professional services (commercial).

CTOS also sells credit scores directly to consumers (D2C). These are usually people who want to understand why their loan applications were rejected, or how creditworthy they appear to banks.

Finally, CTOS has a growing international segment. They specialise in alternative data credit scoring platforms in Philippines and Indonesia.

Source: CTOS (2026)

Are the shares liquid enough?

11 Aug 2026

Share price: MYR 0.69

Market capitalisation: MYR 1,570 mn (USD 383 mn)

Enterprise value (EV): MYR 1,608 mn (USD 393 mn)

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

NTM P/E: 17x

Starting July 2024, CTOS’ total return started diverging from the Malaysia ETF. What happened?

Guidance downgrades.

During Q4’23 earnings, CEO Erick Hamburger targeted 2024 revenue growth from 30% to 38%. By Q3’24, this was cut to somewhere between 21% and 23%.

Actual revenue growth came in at only 17%.

Disaster.

During Q2’25 earnings, CTOS downgraded its 2025 revenue growth target. Initially, they expected 12-19% growth. But now, they expect only 3-7%.

The shares continued to slide.

The resignation of CEO Hamburger in April 20251 and CFO Chiam in September 20252 did not help.

That’s terrible. Management jumping ship! Why are you even shortlisting this company?

Wait!

It looks terrible, but it’s actually not as bad.

The board wanted a new management to re-accelerate growth. That’s the most probable reason behind the high turnover.

While CTOS explained that CEO Hamburger resigned “to explore new career opportunities”, LinkedIn shows he has not started a new role since he left.3

Under-recognised growth

What has new management done to re-accelerate growth?

The new management ramped up marketing and spending on technology.

Marketing expense was restored to ~17% of revenue, the level last reached in 2022. IT costs increased from 4% of revenue to 5% in 2025. This is the highest level since 2020.

In Q1’26, CTOS finally completed its migration to the cloud. This allows CTOS to offer more accurate, real-time predictive risk models and fraud detection.

We could see the results already.

Revenue growth accelerated to +9% in H1’26, up from just +5% the same period last year.

This was not at the expense of margins (pun very much intended!). The company maintained operating profit margin at ~+20%.

Increased spending on marketing and technology helped re-accelerate growth. That’s obvious.

The key question: how sustainable?

Leading indicators suggest revenue growth will continue improving.

In Q2’26, advance payments from customers increased +91% YoY and +43% QoQ.

Customers took around 75 days to pay their invoices, down from 90 days in Q2’25.

We talked about how when demand starts weakening, customers start delaying payments. The opposite is also true:

When demand starts recovering, customers start paying up.

Yet, the market still hasn’t fully recognised this?

Yes.

The new management targets 10-12% revenue growth over the next 2 years. Sell-side expects only 9%.

Given the leading indicators, I am inclined to believe the new management.

The valuation has not fully reflected the growth potential?

I believe so too.

At today’s share price, I estimate the company is selling at ~ 7% free cash flow yield on enterprise value (EV).

~3% premium over the Malaysia 10y government bond. This looks attractive, given that CTOS can grow revenue at high-single digit over the next few years.

In comparison, global peers like Transunion ( US) and Experian plc (EXPN LN) are trading at ~3% and 4% FCF yield respectively. Both show similar growth potential as CTOS.

Capital returns

What makes you think the capital returns are attractive?

In July 2026, CTOS announced it will sell 10% of JurisTech, an enterprise fintech associate. 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.

The company signalled further capital returns.

CTOS still has 39% stake in JurisTech. The company announced plans to eventually sell this stake. The implied valuation is MYR 195 mn, ~12% of today’s enterprise value.

Potential sale at 2x today’s share price

Creador is the single largest shareholder, with ~21% of CTOS.

The private equity (PE) firm bought the company from its founders in 2014. After bringing CTOS to IPO in 2021, it has sold its stake down to today’s level.

What makes you think it wants to sell?

There are three signs that Creador is looking to sell the entire company:

PE fund near end of life. 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

Given the 10-year standard life of a PE fund, Creador will likely want to exit within the next 5 years.

Selling at today’s share price will mean a significant loss. The best way out is probably to find a strategic buyer (maybe Experian Malaysia?) who is willing and able to pay a premium above MYR 1.35.

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

Creador’s founder became the non-executive chairman. On 1 July 2026, Brahmal Vasudevan took over as CTOS’ non-executive chairman.5

As far as I know, this is the first time Vasudevan has taken on a chairman appointment in his investees. This suggests Creador has become more serious about re-accelerating growth and restoring CTOS’ valuation.

Both pre-requisites for a profitable exit.

Very interesting. Creador bought 1,000,000 more shares in June 2026.6

I saw the new CFO started buying shares. In June 2026, he bought 50,000. Just a few days ago, on 10 August 2026, he bought another 350,000.7

Good signal.

I agree.

Chief executives in other countries, especially the UK, are required to buy and hold shares. Investors often misinterpret their buying as a bullish signal.

In CTOS’ case, this looks like bona fide buying. I am not aware that the new CFO is required to buy and hold shares.

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

Give me a sense of the competitive landscape. Compare CTOS to its peers like Credit Bureau Asia Limited (CBA SP) and Experian plc (EXPN LN).

Give me more details on their growth potential in Philippines and Indonesia too. It’s not material now, but what are the chances it can provide the next leg of growth?

When you model out the free cash flows, remember to use the statutory tax rate of 24%. CTOS’ tax exemption will expire in November 2026.

Coming up next

Shift4 Payments, Inc. ( US).

20% p.a. revenue growth.

But only 7x P/E.

Its moat? Sticky, integrated software and payments ecosystem.

But why are so many investors betting against FOUR? Short interest is sky high at 27%!

What’s the catch?

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 CTOS MK, 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.

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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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.

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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 3659, either long or short. I may change my views, predictions, or personal portfolio positioning at any time without notice.

References