Max Hu of ZZ Capital international presented his investment thesis on Boeing (US: BA) at Asian Investing Summit 2023. Max also discussed his macro outlook.
Thesis summary:
Boeing is a leading global company that sells airplanes, rotorcraft, rockets, satellites, telecommunications equipment, and missiles worldwide. The company generated revenue of $66 billion in 2022 (~40% Commercial Aviation, ~35% Defense & Space, and ~25% Aviation Services).
Boeing shares recently traded at a price-to-book multiple of 1.8x. The stock price has declined by ~40% since 2017 and has underperformed over the last five years, likely due to bad US-China relations, 737 MAX-related news, and covid.
Max believes that the stagnating stock price provides an attractive entry point for long-term investors. The shares could benefit either if (1) China-US relations improve and Boeing receives new orders from China, or (2) China-US relations deteriorate further, in which case dual-use aviation and military assets could become highly valuable.
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About the instructor:
Max Hu serves as the executive director for ZZ Capital international. ZZ Capital International is the Hong Kong-based oversea investing platform for the ZEG, a leading Chinese privately-owned investment group with an AUM over 150 billion USD. Previously, Max was Head of Asset Management for JT Asset Management. He was also the co-founder and fund manager of Tyee Capital Group. He managed Tyee Capital’s global opportunity fund, an equity-based, long-biased multi-strategy fund with a focus on extraordinary businesses. Max’s investment approach is contrarian, long-term, and concentrated. His investments have been focused on easy to understand, wide-moat companies with solid long-term growth prospects. He has worked at Deutsche Asset Management and is a CFA Charterholder. Max graduated from Tsinghua University in China with a degree in physics and mathematics. He has done Ph.D. research in Financial Economics at ETH Zurich and holds a Masters’s degree from University Heidelberg.
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