Hong Kong-based Value Partners (Trades, Portfolio) has a two-decade history of investing in companies based in China and the Asian region – and finding success. In recent years, it has been producing double-digit returns for its clients – 13.5% last year, 11.2% in 2013 and 14% in 2012.
Value Partners (Trades, Portfolio)’ most noteworthy second-quarter transaction was its reduction, by nearly two-thirds, of its stake in Chongqing Changan Automobile Co. Ltd. (SZSE:200625, Financial), a Chinese automobile manufacturer. Value Partners (Trades, Portfolio) sold 33,885,131 shares for an average price of HK$22.07 (about $2.85 in U.S. currency) per share. The sale had an impact of -6.42% on Value Partners (Trades, Portfolio)’ portfolio.
Chongqing Changan has a market cap of $58.52 billion and an enterprise value of $107.23 billion. It has a P/E of 6.7, a P/B of 2.1 and a P/S of 1.0.
Value Partners (Trades, Portfolio) reduced its stake in Luye Pharma Group Ltd. (HKSE:02186, Financial), a Chinese pharmaceutical company, by more than 25%. Value Partners (Trades, Portfolio) sold 24,754,000 shares and received an average price of HK$9.09 (approximately $1.17 in American money) per share. The deal had an impact of -2.67% on Value Partners (Trades, Portfolio)’ portfolio.
Luye Pharma Group has a market cap of $24.08 billion and an enterprise value of $22.53 billion. It has a P/E of 30.6, a P/B of 4.3 and a P/S of 5.8.
Value Partners (Trades, Portfolio) sold nearly 85% of its stake in SSY Group Ltd. (HKSE:02005, Financial), a Chinese pharmaceutical manufacturer. Value Partners (Trades, Portfolio) sold 62,360,000 shares for an average price of HK$3.31 (roughly 42 cents in U.S. dollars) per share. The transaction had a -2.39% impact on Value Partners (Trades, Portfolio)’ portfolio.
SSY Group has a market cap of $5.88 billion and an enterprise value of $6.43 billion. It has a P/E of 9.7, a P/B of 2.0 and a P/S of 2.8.
Value Partners (Trades, Portfolio) reduced its stake in Ping An Insurance (Group) Co. of China (HKSE:02318, Financial), a Chinese holding company that deals primarily in insurance, banking and financial services, by nearly one-third. Value Partners (Trades, Portfolio) sold 5,209,000 shares for an average price of HK$54.73 (about $7.06 in American currency) per share. The deal had a -2.22% impact on Value Partners (Trades, Portfolio)’ portfolio.
Ping An Insurance has a market cap of $738.52 billion and an enterprise value of $574.88 billion. It has a P/E of 10.3, a P/B of 1.7 and a P/S of 1.0. Matthews China Fund (Trades, Portfolio) and Matthews Pacific Tiger Fund (Trades, Portfolio) have shares of Ping An Insurance in their portfolios.
Value Partners (Trades, Portfolio) sold 11,482,000 shares – more than three-quarters of its stake – in China Gas Holdings Ltd. (HKSE:00384), a Chinese natural gas provider, for an average price of HK$13.38 (approximately $1.73 in U.S. money) per share. The sale had a -1.52% impact on Value Partners (Trades, Portfolio)’ portfolio.
China Gas Holdings has a market cap of $56.82 billion and an enterprise value of $75.36 billion. It has a P/E of 17.3, a P/B of 3.1 and a P/S of 1.9.
Value Partners (Trades, Portfolio) also reduced its stakes in Industrial And Commercial Bank Of China (HKSE:01398), China Merchants Property Development (HKSE:200024), Elec. & Eltek International Co. Ltd. (HKSE:01151), AmorePacific Corp. (XKRX:090430) and China Taiping Insurance Holdings Co. Ltd. (HKSE:00966).
Value Partners (Trades, Portfolio) sold 13 stakes in its portfolio in the second quarter. Its largest divestiture was the sale of a 7,745,000-share stake in Taiwan Semiconductor Manufacturing Co. Ltd. (TPE:2330), a Hong Kong-based insurance comglomerate, for an average price of NT$145.01 (roughly $4.44 in American dollars). The transaction had a -2.89% impact on Value Partners (Trades, Portfolio)’ portfolio.
Taiwan Semiconductor Manufacturing has a market cap of $3.41 trillion and an enterprise value of $3.06 trillion. It has a P/E of 11.2, a P/B of 3.2 and a P/S of 4.0. Matthews Pacific Tiger Fund (Trades, Portfolio) has shares of Taiwan Semiconductor Manufacturing in its portfolio.
Value Partners (Trades, Portfolio) sold its 23,822,000-share stake in China Unicom (Hong Kong) Ltd. (HKSE:00762), a Chinese telecommunications company, for an average price of HK$1.73 (about 22 cents in U.S. currency) per share. The deal had a -2.67% impact on Value Partners (Trades, Portfolio)’ portfolio.
China Unicom has a market cap of $244.26 billion and an enterprise value of $396.33 billion. It has a P/E of 16.2, a P/B of 0.9 and a P/S of 0.7.
Value Partners (Trades, Portfolio) divested itself of its 2,351,500-share stake in China Mobile Ltd. (HKSE:00941), a Beijing-based telecommunication company, for an average price of HK$13.52 (approximately $1.74 in American money). The transaction had a -2.3% impact on Value Partners (Trades, Portfolio)’ portfolio.
China Mobile has a market cap of $1.88 trillion and an enterprise value of $1.81 trillion. It has a P/E of 13.7, a P/B of 1.7 and a P/S of 2.3. Causeway International Value (Trades, Portfolio), Matthews China Fund (Trades, Portfolio) and Signature Select Canadian Fund (Trades, Portfolio) have shares of China Mobile in their portfolios.
Value Partners (Trades, Portfolio) sold its 28,605,000-share stake in TCL Communication Technology Holdings Ltd. (HKSE:02618), a Chinese electronics company, for an average price of HK$1.17 (roughly 15 cents in U.S. dollars) per share. The transaction had a -2.23% impact on Value Partners (Trades, Portfolio)’ portfolio.
TCL Communication Technology Holdings has a market cap of $7.23 billion and an enterprise value of $9.31 billion. It has a P/E of 16, a P/B of 1.8 and a P/S of 0.5.
Value Partners (Trades, Portfolio) also sold its stakes in Techtronic Industries. Co. Ltd. (HKSE:00669), Tencent Holdings Ltd. (HKSE:00700) and seven other companies.
New buys and adds
Value Partners (Trades, Portfolio) acquired a 12,709,000-share stake in Zhuzhou CSR Times Electric Co. Ltd. (HKSE:03898), a Chinese railway equipment manufacturing company, for an average price of HK$53.12 (about $6.85 in American currency). The deal had a 4.73% impact on Value Partners (Trades, Portfolio)’ portfolio.
Zhuzhou CSR Times Electric has a market cap of $67.59 billion and an enterprise value of $64.51 billion. It has a P/E of 22.5, a P/B of 4.6 and a P/S of 4.3.
Value Partners (Trades, Portfolio) bought a 37,782,000-share stake in China State Construction International Holdings Ltd. (HKSE:03311), a Hong Kong-based construction contractor, for an average price of HK$13.71 (approximately $1.77 in U.S. money). The transaction had a 3.38% impact on Value Partners (Trades, Portfolio)’ portfolio.
China State Construction International Holdings has a market cap of $43.57 billion and an enterprise value of $51.1 billion. It has a P/E of 12.4, a P/B of 2.1 and a P/S of 1.3. Matthews China Fund (Trades, Portfolio) has shares of China State Construction International Holdings in its portfolio.
Value Partners (Trades, Portfolio)’ largest addition to an existing stake was its purchase of 82,814,000 shares of CSPC Pharmaceutical Group Ltd. (HKSE:01093), a Chinese pharmaceutical company, for an average price of HK$7.05 (roughly 91 centers in American dollars) per share. The acquisition had a 4.06% impact on Value Partners (Trades, Portfolio)’ portfolio.
CSPC Pharmaceutical Group has a market cap of $41.06 billion and an enterprise value of $40.89 billion. It has a P/E of 32.6, a P/B of 4.9 and a P/S of 3.8.
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