Mid-year portfolio review 2022

It’s been difficult six months to try to find somewhere to hide, I have taken some hits but managed to navigate the downturn decently well.

My portfolio detracted -11% in the first half of 2022 vs -20% for my main benchmark MSCI World Total Return, both denominated in USD. Never fun to be down, but after a very weak 2021 I’m of course pleased to finally stay ahead of the index. I have talked a lot about the US market and the USD in the past. Being underweight the US market has for a very long time been a big mistake. This is probably the first half year in a long time when its been positive. The USD itself feels like one of the main macro factors to mention for this period as many compare their returns in their local currencies, which of course comes out favorably if one compares returns in a currency that lost a lot to the dollar. The USD is just insanely strong right now, this has been a big detractor for some of my investments denominated in Swedish Krona, Polish Zloty and Euro.

Returns for first half 2022

Below is the returns for my holdings during 2022 and the ending weights (not including dividends). For example Swedish Match has been a larger position but has been sold down over the past months and Modern Dental has been increased after it already fell. My position sizing and buying/selling has had a major positive contribution to the outcome.

Returns since inception

Quick comment on each holding

There is a lot to say about this half year in terms of Macro etc, but I will try to keep it as brief as possible with some thoughts on all my holdings. I hate to be so non-humble but my “everything is a bubble post” from January this year was timed almost perfectly for the start of the downturn. Ok bragging over, press more and read all thoughts on my holdings:

Swedish Match

Obviously saved my bacon in terms of return this year. Given my dedicated post to the buy-out by PMI in my previous post, no further comments needed here.

PAX Global

The stock crashed last year on the FBI raid of their warehouse in the US. That seems to have been a big nothing hamburger as no further information has come out, independent investigations have been made that found nothing. The company has kept delivering but the stock price has not recovered probably due to the general market downturn. The year end results saw a big jump in revenue and a smaller jump in operating income. So in such a market the multiple has compressed with the rest of the market and the stock has more or less traded flat. Early this year I added to the stock and as the rest of the portfolio fell the position size has got very large.

Not part of the return above is a 15% jump in share price since the company released a positive profit alert just after the half year cut-off. The company guided for a more than 30% YoY increase in Net Profit for H1 2022. That means at least 18% increase in Net Profit on the previous half year which was the previously largest profit (also boosted by a one-off gain). So it’s a huge result to come out with in this environment, again the market is not buying into the PAX story. I do not understand why this stock is not trading north of 10 HKD.

LiveChat Software

Very long term investing usually becomes great when you are lucky enough to tag along on the ride of high performing teams. From everything I can see about LiveChat, they seem to be on the most high performing teams in Poland. When I first bought LiveChat at 33 PLN per share it really was cheap, EV/EBITDA below 10. Today at 100 PLN it is at EV/EBITDA 15, sure its not super cheap but even if it goes down to 10 again, it’s still a double for me. You can’t fight that the fundamentals in the long run. I just hope the team keep innovating and building a bigger and better tech company. As long as the team seems to be awesome I’m along for the ride. I trimmed some last year at 128 PLN and added shares in March at 87 PLN.

Modern Dental Group

What a wild ride this stock has been, this is how I tried to manage it:

Date Name Shares Price
2018-12-14 Modern Dental Group 36000 1.29
2020-03-23 Modern Dental Group -24000 1.14
2021-03-30 Modern Dental Group 24000 1.84
2021-05-18 Modern Dental Group -10200 5.18
2021-06-15 Modern Dental Group -7800 9.4
2021-01-06 Modern Dental Group 7000 5.09
2022-03-14 Modern Dental Group 11000 3.04

The total of all those purchases and sales is that I’m long as many shares as the first purchase. At the same time I locked in profits so I almost own the shares for free. Today it’s trading just above 3 HKD. This wild ride has mostly been multiple expansion and compression, the fundamentals have not been swinging that wildly. Company wise I keep being impressed that this is something else than the average low quality poorly managed small cap you usually find listed in Hong Kong. Probably the next report will be weak, with shutdowns in China both affecting China sales and factory production. But I see a lot of positives long term mainly on the clear aligner side. Clear aligners are becoming a commoditized product (not good for ALGN) and what matters is distribution. Modern Dental has distribution which they now can leverage, I think this could be a real hit product long term. Overall dental products are not cyclical and a company of this sort should not trade a single digit P/E, but it still does!


As a general comment on all my Hong Kong holdings, they have experienced serious multiple compression. It’s not very strange since China is almost a year ahead the US in the this bear market. Basically fundamentals have to deteriorate for the market to find even lower stock price levels, as the HK stocks are trading at the lower band of their valuation multiples. This is also the case with Vinda. The company is currently trading at EV/EBITDA of about 8 and P/E 14 and let me just quickly illustrate what kind of quality you get for that price and 18-fold increase in revenue and net profit in the past 17 years.

Yes this is China exposure, but this is the right type of China exposure to take. Swedish majority owned in an industry which the regulator and the politicians will never touch. The only big risk is the total sanction of China risk, which you just have to live with if you invest in China.


A few years ago I would never have dreamt that China would kept its border closed as long as it seems intent to do. This somewhat involuntarily has become my exposure to that re-opening. More short term the funding risk of Naga3 is what keeps me up at night. But knowing that 50% of cash flow came from non-Chinese or Cambodia local Chinese I have decided to stick around, believing that Naga can muddle through until that day China finally opens up to the rest of the world. But there is of course not much upside if China never opens up again.

Greatview Aseptic

A failure from my side to put so much money into this company. Jardine group are incredibly poor stewards of capital, I will never invest with them again. I’m just looking for exit points in this and Dairy Farm. My belief is that the dividend was pulled because the management and some VC funds are planning a LBO of the company. This was also the real reason for pulling the dividend. I have increased my position short term in anticipation of such an event, if I’m wrong I will have to capitulate out of this stock at a probably large loss at a later point in time. Short term fundamentally the company is hurting, they are last in the supply chain to get paid more when inflation rises. First the supermarket raise their price (which happens with a lag) then the milk producers can get paid, then they can pay Greatview. That was also a mistake in my analysis to not realize this and at least further reduce my position given how sure I was of inflation re-emerging. It will be interesting to see if I get bought out this year or not.


This became a complicated trade, not really what I should spend my time on, since I have zero edge in these large companies. Another position I’m looking at exiting to add to actually interesting stocks, not sure if now is the right time though as I believe large caps will lead the rise when things turn around for China investors.

Essex Biotech

Multiple compression just like my other companies. I discussed with the company about the central procurement, it could actually be a net positive for Essex. I have reduced my position in Essex during end of last year and beginning of this as I had a big bet on a bounce (which happened). Fundamentally everything is going well and I see no reason to sell further, rather add back what I sold.


Inflation in Poland is high, I analyzed exchanges in general as a good investment to protect against inflation. So far the stock market has not rewarded me, but the valuation of Polish stocks is also at record lows. So again it seems I bought into a decent idea in the wrong market where the Beta exposure is killing me. I’m not letting go of this just yet, I want to see if GPW has pricing power as I hoped to increase prices as inflation bites.


Both pleased and displeased with this holding. Fundamentally it has done well, but the largest upside regarding its cardiotracer has not seen any traction. So just like the Polish stock market I have followed the market downwards. I’m not looking at adding here and slightly regret that the company has such a large weight in the portfolio (4.6%).

Dairy Farm

Like I said when commenting Greatview, I’m just looking for an exit here. When/if China opens this will probably jump some 30% but it has been a failed investment nonetheless these almost past 5 years and its time to move on.

Agnico Eagles Mines

This was my gold proxy exposure and unfortunately I became hostage of corporate action merger with this entity. My gold position has not played out as a imagined, inflation hedge and all that. I started to reduce my position in March this year and will most likely sell the rest if/when gold bounces of these recent lows.

AK Medical

Terrible performance last year, less terrible this year but still bad. I was wrong on how bad central procurement would affect this company. On the other hand the market seems to have been wrong on how large market share AK Medical will get from the CP. It seems to be in the range of 20% of the Chinese market. I had estimated around 10% so from that perspective there is clear upside. I will hold on to this disaster of an investment for a while here since I really like the underlying product and exposure to what old people in China will need.


My only Russia loss. Olvi owned a big brewery in Belarus which is now fully written off. The stock basically dropped with the value of that write-off and has after that gone down a little bit more with the general market downturn. Left is a very high quality brewery with exposure to Finland and the Baltics. This is something I’m looking at adding to when the right moment comes.


My speculative holding has not paid off yet. Although the interest in their products seems high, in the end in these environments we are in now its cash that is king. And very little cash flow has so far come out of all the deals and talk the company has pushed. I’m not impressed but it’s a small holding and it could still a really large product in the future, so that’s OK.

Tethys Oil

Looks to be a loser this year and it did end the first half really weak on a lot of oil selloff in July. But my performance does not include dividends which has been substantial in Tethys with both special share dividend and regular dividend. Accounting for that the stock is flat. I did take profits on the way up so Tethys contributed very positively to my return this half year. Due to the profit taking the position is now very small.

8 thoughts to “Mid-year portfolio review 2022”

  1. Thanks GSP – i’m a regular visitor to your site for new ideas and solid analysis, keep it up!

    PAX Global has caught my eye recentlyand, following my further research (still more to do) seems a really attractive proposition at current levels. However, i can’t reconcile the divergence between earnings and cash flows – is this something you’ve considered? It’s raising some red flags for me, but doesn’t seem to be a cause for concern for most of the analysts covering the stock.

    1. Hi Alex, its a very good question and probably one of the main reasons why the company is trading at such a low valuation. Investors see the company as having poor capital allocation and perhaps to some degree also poor accounts receivables and inventory management. On one hand that is true, but I do believe PAX success is partly built on them having the best devices in the market but also having the cash/capital to provide very favorable payment terms for their providers, basically extending them credit and holding inventory in a way that many competitors wouldn’t. This creates this inefficient capital structure where they need to hold a lot of cash and also built a lot of inventory on back of their very strong growth. If growth slows more of the net income should convert into free cash flow. I think its not ideal but just part of what the PAX investment case looks like, but not a red flag for me. Thank you for challenging me on my case, it makes me think through this things another turn.

      1. Thanks for the thoughtful response, that makes good sense.

        I guess one of the questions that prompts (given there is some uncertainty as to management’s capital allocation ability) is whether this is a business which (in WB’s words) a chimpanzee could run.

        To me, it does feel as though a big part of the bull thesis is their favourable market positioning (relative strength in Latam, India and parts of Africa) and, in principle, PAX could simply ride demographic/political tailwinds to success. At the same time, underinvestment (or poor capital allocation decisions) could allow new competition to erode their market share and margins in those regions.

        What’s your view? How much importance do you attach to PAX’s management quality? And how do you rate management both in terms of honesty and capability?

        1. I try to judge management by its track record and I dont spend time having calls with mgmt trying to understand them as people, its easy to add a lot of other biases then. PAX mgmt track record is of you can say poor capital allocation, but you can also call it defensive, debt free is not as bad when rates are high. Other than that their track record is that they grew to one of the largest players in China POS market, realized how crowded that space got (and still is with poor margins) and pivotet their business to be a purely non-China POS provider. This pivot makes their long term revenue statistics look weak but if you just look an non-China growth its just a straight line up these past 6-7 years. They did that as a small player against large companies like Ingenico, thats also their track record. You have to be your own judge if you are impressed by that and if a monkey could have done that pivot.

  2. I’m with u on Greatview and dairy farm:(
    IMO the jardine group is still quite decent in their capital allocation looking at the massive share buyback for HK Land at these prices. It’s just that it is a much tougher business for Greatview and dairy farm.

    1. Dont really agree, they allowed a full pull of the dividend, thats really strange when payout ratio was so extremely high for many years. Also for Welcome supermarkets, many others companies have done well during covid. Welcome has been in perpetual turnaround that never happens, even Yonghui seems to have gone wrong due to group buying and home delivery.

  3. Thanks GSP, solid performance considering the half it has been- congrats!
    Can I ask why you picked AEM as your preferred gold miner? The assets are incredible, but it always seems to have been one of the most expensive.

    1. I choose Kirkland and then it merged with AEM. I did not want to spend too much time trying to stock pick gold miners I wanted a solid exposure.

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