China Yongda Automobiles Services Holdings Limited $3669.HK
Cheap Chinese Auto Dealer of Luxury Western Brands: Offering Optionality on a Bid in Chinese Equities and Normalization of Auto Volumes in China.
Attached is my Memo on China Yongda. These notes were taken over a two-month due diligence period. As time progressed, my conviction in the idea decreased. Initially, I viewed this as a great business at a great price; however, I now perceive it as a fine business, at a very cheap price. I maintain a small position but see better uses for capital in other names. I've decided to share my notes for free, hoping that they provide value to others. Please note the disclosure at the end of this document. Remember, everything expressed here by myself or Matrice Capital is my opinion, and whatever you choose to do is entirely up to you.
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This is interesting. Have you looked at Zhongsheng and Meidong, their competitors?
I agree this is an asymmetrical opportunity. BMW and Porsche have no interest in having their China distribution networks in distress. Perhaps at some point they try to broker consolidation and/or improved financial terms. One concern is that Chinese corporate executives have only known growth - how do they manage these challenges?