Left goes to Hong Kong to buy a nanocap trading near net cash at ~4x earnings with exposure to a new consumer product enabled by recent developments in AI.

Don’t leave just yet. I know. Everything in Hong Kong is super cheap. China risk. Half of these things are just frauds. I know. Bear with me.

Here are the highlights.

• Non-cyclical industry with moderate barriers to entry and moderate to high pricing power & no customer concentration.

• Has been distributing cash in form of dividend that’s been grown an average of ~20%/year for 3 years with a mid-teens dividend yield and a payout ratio of ~50%

• Is trading for slightly more than the current net cash position.

• LTM gross margins >= 70%, >=30% operating margins with free cash flow margins above 20% for the last 4 years. FCF margins reached a high of >= 50% last year (it’s possible they’ve been underinvesting in capex, but it’s hard to say.)

• Has a new software product that sells for roughly $7,000 USD which leverages recent developments in AI.

• The CEO owns almost 60% of shares outstanding that were predominantly purchased with his own cash just a few years ago.

• Located inside a market segment where you can underwrite positive annual growth for decades to come with extremely high certainty (I.e., >99% certainty of averaging positive annual growth going out 30+ years).

These are fantastical claims (especially that last one), but I’ve got the receipts to back it up. And a lot of you are going to hate me for this, but here’s where I have to paywall the writeup.