Fun fact: When I first set foot in Hong Kong in 1967, the Mass Transit Railway (MTR) was nonexistent. Fast forward to today, it’s widely considered one of the best metro systems in the world. I can personally vouch for its remarkable efficiency—in a swift 15-minute journey, I was whisked away from one end of the city to the other.
As the saying goes, “The more things change the more they stay the same”. It certainly felt that way when I visited Hong Kong last month. From the looks of it, the city is ever-changing—its skyline is often adorned with cranes and scaffolding, with new buildings popping up regularly. On the political front, changes are palpable, too. I would be amiss to dismiss the impact of the new National Security Law over the past three years. Still, having witnessed the tumult of the Hong Kong Riots in 1967 and now looking at the current state of the city, one constant emerges—the resilience of its people. Their enduring ability to adapt, reinvent and thrive amid change remains a steadfast characteristic of this ever-evolving city. Returning to Hong Kong for the first time in four long years, it does feel like the city has changed, yet there remains a comforting air of familiarity.
On the investing front, Hong Kong continues to present lucrative opportunities. One of our portfolio companies, EC Healthcare, is a top-tier non-hospital medical provider in Hong Kong. The company came to prominence with its aesthetic medical business, which offers non-surgical beauty treatments, underscoring the adaptability and forward-thinking nature of the people of Hong Kong.
That being said, identifying investment opportunities is often more challenging than it may seem, especially when applying our rigorous selection standards for potential portfolio companies. At Mobius Capital Partners, we opt only for stocks that have a minimum return on capital of 20%; a debt-to-equity ratio below 50%; an earnings growth rate of at least 10%; and a daily liquidity of no less than USD1 million. On top of all that, we also evaluate risks through the lens of ESG+C (Environmental, Social, Governance, and Corporate Culture). As I mentioned in a recent fireside chat at the Greenwich Economic Forum, out of the entire spectrum of stocks listed in Hong Kong, merely one—EC Healthcare—satisfied these rigorous criteria.
Watch the fireside chat: https://bit.ly/43uTnJX
As China continues to assimilate Hong Kong into its broader socioeconomic fabric, it’s inevitable that more changes are afoot. I certainly hope that no matter what changes come its way, Hong Kong just keeps on growing and transforming for the better.