Asian Fund Pivots to Samsung Bet After Riding Pop Mart Rally

Yahoo

7 hours ago

(Bloomberg) -- A peer-beating Asian equity fund is turning its sights on Samsung Electronics Co. after adding Pop Mart International Group Ltd. before the latter's share price surge.
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The $1.6 billion Ninety One Global Strategy Fund - Asian Equity Fund bought Pop Mart shares in March 2024 after its quantitative model identified the Labubu maker's earnings potential amid China's economic malaise, said London-based co-manager Charlie Linton. He recently turned overweight on Samsung, saying many investors have 'mispriced' the company because it's lagging rivals like SK Hynix Inc. in the high-bandwidth memory chip market.
The fund's screening often highlights stocks that are 'discarded' by investors making decisions based on geographic and sector-driven trends, he said. It has returned 15% this year, outperforming 94% of peers, according to data compiled by Bloomberg.
Linton's team relies on a model that screens stocks in the region using a blend of factors — quality, value, operational performance and technical momentum — and picks shares that are expected to withstand market volatility, he said. The fund viewed Pop Mart as undervalued given the popularity of its characters and intellectual property products. Its shares have soared roughly 600% over the past year.
While Samsung's shares have trailed those of SK Hynix, which supplies HBM to Nvidia Corp, the firm's next-generation DRAM chip could help the stock catch up with peers once production takes off, Linton said. Samsung shares are up 20% this year, while SK Hynix's have jumped 60%.
'Currently everyone is underweight' Samsung, said Linton, who also owns SK Hynix shares. 'We've taken a bit more positive view, partly because the valuation looks very attractive.'
Chinese equities make up almost a third of the fund. Linton owns shares of Naura Technology Group Co., which he sees as a proxy to China's rising semiconductor prowess thanks to its localization efforts and growth that's outpaced domestic counterparts.
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