emerging markets to frontier markets

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Cabot Investors Conference 2013 www.cabot.net Emerging Markets to Frontier Markets Paul Goodwin Analyst, Cabot China & Emerging Markets Report [email protected]

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Emerging Markets to Frontier Markets. Paul Goodwin Analyst, Cabot China & Emerging Markets Report [email protected]. Danger Everywhere You Look. What Are the Dangers?. Examples: Greek liquidity crisis Egyptian revolution China’s investor controls Inflation in Brazil Bureaucracy in India. - PowerPoint PPT Presentation

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Page 1: Emerging Markets to Frontier Markets

Cabot Investors Conference 2013 www.cabot.net

Emerging Markets toFrontier Markets

Paul GoodwinAnalyst,

Cabot China & Emerging Markets [email protected]

Page 2: Emerging Markets to Frontier Markets

Cabot Investors Conference 2013 www.cabot.net

Danger Everywhere You Look

Page 3: Emerging Markets to Frontier Markets

Cabot Investors Conference 2013 www.cabot.net

What Are the Dangers?

• Examples:–Greek liquidity crisis–Egyptian revolution–China’s investor controls– Inflation in Brazil–Bureaucracy in India

Page 4: Emerging Markets to Frontier Markets

Cabot Investors Conference 2013 www.cabot.net

The Risks: China Mobile (CHL)

2004-2007

Page 5: Emerging Markets to Frontier Markets

Cabot Investors Conference 2013 www.cabot.net

The Risks: China Mobile (CHL)

2007-Present

Page 6: Emerging Markets to Frontier Markets

Cabot Investors Conference 2013 www.cabot.net

Emerging Markets Leave China

in the Dust: Jan. 2011–Apr. 2013

Page 7: Emerging Markets to Frontier Markets

Cabot Investors Conference 2013 www.cabot.net

Then It All Changes in May

• PGJ = China• EEM = Emerging Markets

Page 8: Emerging Markets to Frontier Markets

Cabot Investors Conference 2013 www.cabot.net

EM Investing Is a Stock-Picker’s Game

• Phoenix New Media (FENG)– Inc. 2007 in Beijing– Internet, mobile and TV–Market cap: $625 million–Revenue: $184 million–Announced Q2 results Monday:

stock up 12%

Page 9: Emerging Markets to Frontier Markets

Cabot Investors Conference 2013 www.cabot.net

• Revenue sources (Q1 2013)–Value added services = 79% of

revenue•Social Networks—24%•Online Games—55%

–Advertising = 6%–eCommerce = 14%

Page 10: Emerging Markets to Frontier Markets

Cabot Investors Conference 2013 www.cabot.net

Page 11: Emerging Markets to Frontier Markets

Cabot Investors Conference 2013 www.cabot.net

• Q1 Earnings Report: May 15–Total revenue up 40.4% y.o.y.–Operating profit up 37.1%

• Q2 Earnings Report: August 14–???

Page 12: Emerging Markets to Frontier Markets

Cabot Investors Conference 2013 www.cabot.net

• Established 1999– Largest eCommerce player in

China–Market cap HKD67 billion ($8.7

billion)–17% owned by Yahoo!– IPO talked about end of 2013

Page 13: Emerging Markets to Frontier Markets

Cabot Investors Conference 2013 www.cabot.net

• Alibaba.com—Global e-commerce• 1688.com—E-commerce for small Chinese

biz• AliExpress—Global consumer marketplace• Taobao.com—C2C shopping destination• Tmall.com—Online brand-name shopping• eTao—Comprehensive shopping search

engine• Alibaba Cloud Computing—Just like Amazon• Alipay—Just like Paypal

Page 14: Emerging Markets to Frontier Markets

Cabot Investors Conference 2013 www.cabot.net

Page 15: Emerging Markets to Frontier Markets

Cabot Investors Conference 2013 www.cabot.net