Liontrust Asia Income Fund

October 2017 portfolio changes

  • Sold Alliance Global. We exited the position in the Phillippines-based conglomerate.  The company unexpectedly decided against paying a dividend for FY17 and instead opted for a share buyback programme.  During the AGM, the company’s management said it remains undecided about whether it would reinstate its annual dividend payment in FY18. Given the stock’s strong return year-to-date, we decided to sell out of the position and switch into other alternatives offering a combination of growth and yield.
  • Bought JNBY. A market leader in China’s fast growing “designer brand” apparel market, JNBY has a market share of around 10%.  The company is engaged in design and distribution and actively uses the WeChat’s social media platform to promote brand awareness and customer loyalty. JNBY has 1.5m online members, with “active members” numbering 260,000 as of June 2017, up 36% year-on-year. It has a multi-brand portfolio, currently comprising five fashion brands targeting middle-upper income levels and different customer segmentation (children & teenagers, men, women) as well as the recently launched JNBY HOME brand which is better suited to the online market given the lower requirement for product differentiation.  Management aims to deliver 18% top-line growth, 20% profit growth, and a 75% dividend payout ratio.  We believe its share price valuation is attractive on a PE of 11.6x next year’s earnings estimate (assuming 20% growth) a dividend yield of 5.4% and net cash on its balance sheet.

Disclaimer:

• This content contains information and analysis that is believed to be accurate at the date of publication but is subject to change without notice. Whilst care has been taken in compiling this content, no representation or warranty, express or implied, is made by Liontrust as to its accuracy or completeness. Some parts/sections of this content may been compiled from external sources. Whilst these sources are believed to be reliable, the information has not been independently verified and therefore no representation is made as to its accuracy or completeness. • It should not be copied, faxed, reproduced, divulged or distributed, in whole or in part, without the express written consent of Liontrust. • Past performance is not a guide to future performance. Do remember that the value of an investment and the income generated from them can fall as well as rise and is not guaranteed, therefore, you may not get back the amount originally invested and potentially risk total loss of capital. The issue of units/shares in Liontrust Funds may be subject to an initial charge, which will have an impact on the realisable value of the investment, particularly in the short term. Investments should always be considered as long term. • Any decision to invest should be always based on the final Prospectus and Key Investor Information Documents (KIIDs) and you should take independent legal advice if necessary. These documents contain important information which should be read before investing in any fund and they can be obtained, free of charge, here.

• Investment in Funds managed by the Asia team involves foreign currencies and may be subject to fluctuations in value due to movements in exchange rates. The Funds' expenses are charged to capital. This has the effect of increasing dividends while constraining capital appreciation.

Friday, November 17, 2017, 8:23 AM