5G
WILL CHANGE YOUR LIFE
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WILL CHANGE YOUR LIFE
Traditional ("old") infrastructure | Digital ("new") infrastructure | |
---|---|---|
Business model | Project return boosted by leveraging | Self sustained model capturing additional revenue |
Company balance sheet | High gearing; longer build-up phase | Low gearing or cash rich; shorter build-up phase |
Asset growth | Limited by capacity & utilization affected by disruptive technology | Faster speed generates new consumer/commercial demand |
Project return boosted by leveraging
Self sustained model capturing additional revenue
High gearing; longer build-up phase
Low gearing or cash rich; shorter build-up phase
Limited by capacity & utilization affected by disruptive technology
Faster speed generates new consumer / commercial demand
supportive government policies
shorter construction cycle + simple business model with good and secured order book, providing strong cash flow
next few years will be building phase for 5G infrastructure
companies related to telecom infrastructure provide both income and growth perspective, offer better risk adjusted return in current volatile investment environment
Source: HIS Global Insight, ITF: GWI; National Statistics; McKinsey Global Institute Analysis as of Oct 2017
Source: Analysys Mason. Jan 2019
5G
will go beyond 2025
Source: Analysys Mason. Jan 2019
Source: Nomura Research Institute: Japan’s Asset Management Business, Japanese retail, 2017/2018
5G development in world will likely be China centric, by US Department of Defense Innovation Board “China has taken lead in 5G development through a series of aggressive investment and spectrum-allocation initiatives”
this is a new theme and requires strong analytical skill focusing on free cash flow, earnings momentum and balance sheet strength
only investors with experience through various business cycles (e.g. dot-com bubbles) can surf through coming 5G cycle
close to hot spot but with international exposure
Focus on 5G infrastructure companies across Asia ex Japan region. This is the sector that benefits from supportive government policies and is recession-proof
Proprietary fundamental analysis with emphasis on free cash flow, earnings momentum and balance sheet strength
Selective combination of a basket of value and growth stocks to achieve a target dividend yield of 5% p.a.
The above represents how the portfolio management team generally applies their investment process under normal market conditions
Daily P&L monitoring of market, sectors and stocks
Company visits to reduce risk of negative earnings shock
Monitored in monthly quantitative report of portfolio characteristics
The above represents how the portfolio management team generally applies their investment process under normal market conditions