Clement Loh of Lion Rock Partners presented his in-depth thesis on Airport Corporation of Vietnam (Vietnam: ACV) at Wide-Moat Investing Summit 2019.
Airport Corporation of Vietnam is the near-monopoly operator of airports in one of the world’s fastest-growing aviation markets. ACV not only has exposure to Vietnam’s ascent as a world manufacturing hub but also to a young and growing middle class eager for travel experiences. Aeronautical revenue will be supported by continued international passenger growth and tariff increases, with potential scope to exponentially expand non-aeronautical revenue through revenue-sharing agreements and better concession management. The enterprise recently traded at 15x EBITDA, in line with mature regional peers. Should the company be successful in implementing global standards in airport retailing with the new Terminal 3 in Ho Chi Minh City and the new Long Thanh Airport, we might expect an EBITDA CAGR of 20% over the next seven years, offering compelling upside. The strong moat position as a monopoly operator offers downside protection should management fail to execute.
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About the instructor:
Clement Loh is the Investment Manager of Lion Rock Partners, a private family fund based in Hong Kong. The fund applies the principles of value investing to seek out companies with competitive advantages selling at a reasonable price with a focus on emerging Asian markets and smaller companies. Clement holds a master’s degree in business administration from the University of Toronto and a degree in pharmacy. Prior to entering the investment profession, Clement worked in the pharmaceutical industry and is a non-practicing pharmacist. His interests include economics, strategy, science, education and history.