Another investment which made sense to me is a Macau company called Future Bright. Again, I have to thank red's blog for discovering the name.
Good
Future Bright historically delivered high ROIC thanks to its well positioned restaurants. Their square footage is going to increase significantly in the next 3-4 years and the level of sales should not be much worse than in the past. In addition, thanks to the prominent position of the company's food business and well connected CEO, it is highly probable that Future Bright will get some industrial catering business as the eight planned casinos are opening.
Cheap
The current market wide downturn is transitionary.
At 1.11 HKD, it traded below the value of the developing land that was just purchased, its reasonably re-evaluated premium real estate that the company rents out, and excess cash. By my calculations the company is worth no less than 2x that. If the industrial catering goes well, it is worth 4x that.
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