Time Watch Investments: Leading Manufacturer, Brand Owner, and Retailer of Watches in China

James Choa presented his in-depth investment thesis on Time Watch Investments (Hong Kong: 2033) at Asian Investing Summit 2014.

Time Watch Investments: Established in 1988, Time Watch is the leading manufacturer, brand owner, and retailer of watches in China. Current price is below the HK$1.23 per share Orchid paid to become the cornerstone investor. Insiders have been actively buying the stock in the market recently. Cash on hand is about 30% of market cap with almost no debt. Attractive valuation at EV/EBIT of <5x, P/E of 8x, P/B of 1.6x and a 5% dividend yield (not including the HK0.02 interim dividend declared but not paid). Founder and controlling shareholder (68%) Michael Tung has been in the watch business since 1980 and has successfully built the Tian Wang brand.

About the instructor:

James Choa is Founder and Managing Director of Valiant Ocean Capital Limited. Valiant Ocean is a Hong Kong-based value-oriented investment firm that focuses on companies with substantial exposure to Asia, and will participate in these opportunities via listed securities – both equities and credits – traded on global exchanges, including but not limited to Hong Kong, Singapore, Australia, Canada, and the United States. Prior to founding Valiant Ocean Capital in 2009, James was a member in the Goldman Sachs Asian Special Situations Group (ASSG), a multi-billion proprietary investment group, based in Hong Kong. Since joining Goldman Sachs in 2006, James was responsible for multi-strategy investments in Asia, covering public equities, PIPEs, private equity, high-yield loans, distressed debts, convertible bonds and value-based investments. Before Goldman Sachs, James was an Associate at the New York private equity firm Ripplewood Holdings, where he was responsible for structuring and executing leveraged buyout transactions in the industrial sector. Subsequent to completing the $550 million investment in Kraton Polymers, a specialty chemical business, James was appointed by Ripplewood to design strategic growth plans and implement operational enhancement strategies at the portfolio company in Houston, Texas. James started his career in New York with BT Wolfensohn (which subsequently merged with Deutsche Bank) where he focused on advising clients in mergers, acquisitions, and corporate reorganizations. James received his MBA with a concentration in Corporate Restructuring & Turnaround Management at the Wharton School, University of Pennsylvania. James also graduated from the Jerome Fisher Program in Management & Technology from the University of Pennsylvania where he received his BSE in Finance and BAS in Systems Engineering. James is a CFA charter holder and a member of the Hong Kong Institute of Directors.