Some reading links:

• OAM 2020 letter: Some notes below.
• Petra Capital Management interview: PDF attached for ease of reference; some notes below.
• Scottish Oriental Smaller Companies Trust: Investor update (Jan 2021).
• Peter Tasker: The Covid bubble – how and when will it pop?
• Rob Mahan: Steppe Cement (Kazakh cement company).
• Harvard EdCast: Finding gratitude in challenging times.

OAM 2020 Letter
Some notes/highlights below (combination of direct excerpts and some paraphrasing):

• The fund has 44% of its assets in Greater China, 23% in the Indian subcontinent and 23% in ASEAN. 3 managers (Value Partners, Overlook, Arisaig) are >40% of the fund’s assets today and >70% of the fund’s exposure to the Greater China region. The fund has allocated money to these managers since its inception 22 years ago. 
• India – valuations are not as compelling as in the rest of Asia, but they think the earnings of the companies they own (primarily in the FMCG, retail and financial sectors) are likely to grow rapidly over the next decade, starting from a relatively low base.
• ASEAN – thinks the biggest bargains in Asia today are in this region, particularly in the small and mid-cap segments. Smaller companies in Asia have underperformed their larger brethren significantly over the past 10 years, probably a result of the growth in index investing.
• As a point of comparison, Microsoft’s market cap of ~US$1.7tn is about the same as the market cap of all ASEAN markets. Microsoft is a wonderful company with US$150bn of sales and has been a beneficiary of “work from home” during Covid-19 but the ASEAN region has a combined GDP of US$3tn and ~10% of the world’s population in one of the world’s most economically dynamic regions. This one example is reflective of the broader bifurcation in the valuation of stock markets globally, and of likely future return prospects. The CAPE of US equities is 34x, double the long-term average. By comparison, the CAPE for HK and Singapore equities is 13x and 11x respectively, both significantly lower than their historical averages.
• He shares Jeremy Grantham’s view that the long US equity bull market is now an epic bubble that will ultimately be recorded as one of the great bubbles in financial history and that value investing and emerging market equities are the places to hide and generate decent returns. 
• Value vs. growth – they are not wedded to a value approach. In the first decade of the fund’s existence, it had a strong value bias. In the past decade, however, this shifted to much more of a growth bias (e.g. they allocated money to several Arisaig cubs which all fall into the growth investing camp). In many cases, what appears to be statistically cheap is cheap for a reason – poor corporate governance, businesses with structural headwinds and so on. However, they do think it is possible with thorough research to exclude these “cheap for a reason” stocks and build portfolios of better than average businesses trading at very low valuations.

Petra Capital Management Interview
Chan Lee and Albert Yong discuss why now is a particularly interesting time to be investing in South Korea, why they consider flexibility one of their most important traits as investors, where they’re spending the most time today looking for new ideas, and what they think the market is missing in Daou Technology and Soulbrain.

Daou Technology – classic example of a Korean holding company trading at a significant discount to the sum of its parts. They estimate the total value of the operating business and its publicly listed and private subsidiaries at ~US$2.6bn vs. a current market cap of ~US$1bn. They have worked in the past with companies to help bring out unrealized value, but in this case it is relatively difficult and they need to be patient. Founder/CEO owns >40% of the company and is focused on investing and growing the business. Still, they think that eventually the market should recognize the value and this will be reflected in the share price.

Soulbrain – producer of specialty chemicals and materials used primarily in the manufacture of semiconductors and of LCD and OLED displays. Samsung is the company’s largest customer. High ROE, ROIC company that is continuing to grow market share, earnings can increase 15-20% annually over the next several years. At the same time, the supply side of the business has become more concentrated as the capital costs to compete grow ever higher, scale is more important, and the complexity of the manufacturing process increases. Should not trade at ~12x forward earnings.