Matthews Emerging Markets Small Companies Fund (Trades, Portfolio), a firm that primarily invests in small companies located in Asia Ex Japan, recently disclosed its portfolio updates for the second quarter of 2023. The firm's investment strategy is centered on identifying smaller companies with sustainable growth potential based on various fundamental characteristics. These include balance sheet information, number of employees, size and stability of cash flow, management’s depth, adaptability and integrity, product lines, marketing strategies, corporate governance, and financial health.
Portfolio Overview
As of the end of Q2 2023, the firm's portfolio contained 69 stocks with a total value of $502 million. The top holdings were NSE:SHRIRAMFIN (6.46%), BOM:541153 (6.00%), and LEGN (5.14%).
Top Trades of the Quarter
The firm's top three trades of the quarter involved Ecopro BM Co Ltd, Elite Material Co Ltd, and Full Truck Alliance Co Ltd.
Ecopro BM Co Ltd (XKRX:247540, Financial)
The firm reduced its investment in Ecopro BM Co Ltd by 40,018 shares, impacting the equity portfolio by 1.63%. The stock traded for an average price of â‚©255,040 during the quarter. As of August 15, 2023, the stock price was â‚©318,000 with a market cap of â‚©23.23 billion. The stock has returned 169.59% over the past year. GuruFocus gives the company a financial strength rating of 6 out of 10 and a profitability rating of 8 out of 10. The company's valuation ratios include a price-earnings ratio of 93.61, a price-book ratio of 22.10, a PEG ratio of 2.20, a EV-to-Ebitda ratio of 76.80, and a price-sales ratio of 4.58.
Elite Material Co Ltd (TPE:2383, Financial)
The firm established a new position in Elite Material Co Ltd, purchasing 731,000 shares and giving the stock a 1.14% weight in the equity portfolio. The stock traded for an average price of NT$195.83 during the quarter. As of August 15, 2023, the stock price was NT$425 with a market cap of NT$4.23 billion. The stock has returned 151.99% over the past year. GuruFocus gives the company a financial strength rating of 5 out of 10 and a profitability rating of 10 out of 10. The company's valuation ratios include a price-earnings ratio of 35.56, a price-book ratio of 6.97, a PEG ratio of 2.40, a EV-to-Ebitda ratio of 19.91, and a price-sales ratio of 4.18.
Full Truck Alliance Co Ltd (YMM, Financial)
During the quarter, the firm bought 790,928 shares of Full Truck Alliance Co Ltd, bringing the total holding to 2,245,425 shares. This trade had a 0.98% impact on the equity portfolio. The stock traded for an average price of $6.47 during the quarter. As of August 15, 2023, the stock price was $6.47 with a market cap of $6.93 billion. The stock has returned -12.26% over the past year. GuruFocus gives the company a financial strength rating of 10 out of 10 and a profitability rating of 1 out of 10. The company's valuation ratios include a price-earnings ratio of 44.32, a price-book ratio of 1.39, a EV-to-Ebitda ratio of 19.14, and a price-sales ratio of 6.47.
In conclusion, Matthews Emerging Markets Small Companies Fund (Trades, Portfolio)'s Q2 2023 portfolio update reveals a strategic focus on companies with strong growth potential and solid fundamentals. The firm's top trades reflect a balanced approach to risk and reward, with investments in companies across various sectors and regions.
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