Goldlion Holdings: Manufacturer and Retailer of Men’s Apparel in China

Deepinder Bhatia presented his in-depth investment thesis on Goldlion Holdings (Hong Kong: 533) at Asian Investing Summit 2016.

Goldlion Holdings: Family-owned manufacturer and retailer of men’s apparel in China. Aside from the apparel business, Goldlion owns cash and investment properties that equal ~110% of the recent market capitalization. A profitable, cash generative, well branded, 45 year-old apparel business is therefore available for “free.” Steady growth in licensing revenue, property rentals, and booming e-commerce sales are catalysts for share price recovery. Based on Deepinder’s 2016 forecasts, Goldlion trades at 7x P/E, 0.8x P/B, 7.3% dividend yield, and 14.6% FCF yield. Deepinder’s fair value price reflects 61% potential appreciation (10% WACC, 0% terminal growth after 2019).

About the instructor:

Deepinder Bhatia is the Founding Partner and Portfolio Manager of Bayard Asset Management LLC based in Princeton, NJ. Launched in April 2011, BAM manages a concentrated, long-biased, value oriented, global equity fund. At purchase the majority of Bayard’s holdings have limited sell side coverage, net cash balance sheets, trade at less than 10 P/E, less than book value and more than 5% dividend yield. From 2004 to 2010, Deepinder was an Investment Manager and Partner at Ironbound Capital, a global equity long-short hedge fund with peak assets of about US$1 billion. Deepinder joined the buy-side in 1994 as an Investment Analyst specializing in Asian equities at Merrill Lynch Investment Managers (now BlackRock). At MLIM he was part of the Pacific Group which managed around US$5 billion in Asian equities via mutual funds, separate accounts and hedge funds.His education includes an MSc in Economics from the London School of Economics (1994), MBA from The Wharton School of the University of Pennsylvania (1992) and a Bachelor in Commerce from Bombay University (1987). He has qualified as a CFA Charterholder from the CFA Institute (2000), and as a Chartered Accountant from The Institute of Chartered Accountants of India (1988). Deepinder volunteers on various non-profit investment committees in Princeton town, is a member of the Board of Trustees of the Princeton Day School and is a Founder Charter-Member of The Indus Entrepreneurs (TiE Philadelphia). Deepinder and his family have lived in Princeton, New Jersey since 1994.

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