Investment Pitches

Pitch Summary:
Amazon is a two-headed giant, leading the world in both E-commerce and cloud computing with its dominant online retail platform and Amazon Web Services (AWS). Their retail success is backed by a highly efficient logistics network, enabling them to offer fast delivery and a broad selection of products to customers globally. AWS, the backbone of their cloud services, is a market leader, providing essential infrastructure for businesses across industries. Amazon is also leveraging AI to enhance product recommendations, optimize advertising, and improve operational efficiency. With its unmatched scale in both E-commerce and cloud computing, Amazon is well-positioned for sustained growth, continuing to capture new customers and expand its market leadership.

BSD Analysis:
AHIA expresses strong conviction in Amazon's dual-platform dominance across e-commerce and cloud computing, viewing the company as a "two-headed giant" with market-leading positions in both segments. The fund emphasizes Amazon's highly efficient logistics network as a key competitive advantage, enabling fast delivery and broad product selection that drives customer loyalty and market share gains. AHIA highlights AWS as a market-leading cloud infrastructure provider serving businesses across industries, representing a high-margin, rapidly growing segment. The investment thesis incorporates Amazon's AI integration across product recommendations, advertising optimization, and operational efficiency improvements, demonstrating the company's technological advancement. The manager views Amazon's unmatched scale in both e-commerce and cloud computing as sustainable competitive advantages that position the company for continued growth and market leadership expansion. AHIA sees Amazon as well-positioned to capture new customers while deepening relationships with existing clients across both business segments.

Pitch Summary:
Arista Networks is a key player in the infrastructure behind AI and data centers. The company provides high-performance cables and switches that are crucial for the operation of data centers, a growing business driven by the rise of AI. As the need for AI expands, so does the demand for Arista's products. Their Ethernet cables not only improve energy efficiency in data centers but also help lower lifetime operational costs. Arista's solutions make them an essential part of the AI infrastructure, with a product offering that enhances both performance and cost-effectiveness.

BSD Analysis:
AHIA maintains a bullish stance on Arista Networks, positioning the company as a critical infrastructure provider for the rapidly expanding AI and data center markets. The fund emphasizes Arista's high-performance cables and switches as essential components for data center operations, directly benefiting from AI-driven demand growth. AHIA's investment thesis highlights the direct correlation between AI expansion and demand for Arista's products, creating a compelling growth trajectory. The manager notes that Arista's Ethernet cables provide dual benefits of improved energy efficiency and reduced lifetime operational costs, addressing key concerns for data center operators. The fund views Arista as an essential component of AI infrastructure, with products that enhance both performance and cost-effectiveness. AHIA includes Arista among their notable winners for 2024, reflecting strong execution in capturing AI infrastructure demand and market share gains in the growing data center networking market.

Pitch Summary:
JPMorgan is the largest bank in America, with five major business units, each large enough to operate as its own company. From traditional lending to wealth management and investment banking, the company's scale and diverse operations give it a unique edge in the financial industry. JPMorgan's efficiency and deep integration into the U.S. financial system make it a key player in shaping the market. With such a broad client base, JPMorgan can leverage its reach and expertise to maintain a competitive advantage across every sector it serves.

BSD Analysis:
AHIA expresses strong conviction in JPMorgan Chase as America's largest bank, emphasizing the institution's massive scale and diversified business model as key competitive advantages. The fund highlights JPMorgan's five major business units, each substantial enough to operate independently, demonstrating the bank's comprehensive financial services capabilities spanning traditional lending, wealth management, and investment banking. AHIA's thesis centers on JPMorgan's operational efficiency and deep integration within the U.S. financial system, positioning the bank as a market-shaping institution. The investment case emphasizes JPMorgan's broad client base and extensive reach, which enables the bank to maintain competitive advantages across multiple sectors and economic cycles. The manager views JPMorgan as a core holding that benefits from anticipated regulatory changes under the Trump administration, which could reduce compliance costs and allow traditional banks to compete more effectively with non-regulated lenders.

Pitch Summary:
GE Vernova is the largest global energy supplier, generating about 30% of the world's electricity. With a diverse portfolio that includes gas, wind, nuclear, and hydro, the company has unmatched market reach. Recently, GE Vernova has streamlined its operations to become more efficient and profitable, earning market praise and driving its stock upward. As the world moves toward clean energy, GE Vernova's significant market share and diverse energy generation capabilities make it a key player in powering the transition to a greener future.

BSD Analysis:
AHIA maintains a bullish position on GE Vernova, highlighting the company's massive 30% global electricity generation market share as a fundamental competitive advantage. The fund emphasizes Vernova's diversified energy portfolio spanning gas, wind, nuclear, and hydro technologies, providing exposure to both traditional and renewable energy markets. AHIA's investment thesis is supported by the company's recent operational improvements, including streamlined operations that have enhanced efficiency and profitability, earning positive market recognition. The manager views GE Vernova as a key beneficiary of the global clean energy transition, with its diverse capabilities positioning the company to capture opportunities across multiple energy technologies. The fund notes that GE Vernova was among their biggest winners in 2024, reflecting strong operational execution and market positioning. AHIA sees the company as uniquely positioned to power the future energy mix while maintaining profitability across economic cycles.

Pitch Summary:
Goldman Sachs is the premier investment bank in the U.S., offering services in mergers and acquisitions (M&A) advisory, underwriting, and trading. The company's strong reputation makes it the go-to choice for high-stakes deals. With the new administration and an expected uptick in M&A activity, Goldman is well positioned to leverage its extensive network and expertise to lead even more deals. Beyond business growth, Goldman plays a key role in facilitating market efficiency and economic development through its advisory services, helping companies and economies thrive.

BSD Analysis:
AHIA expresses strong conviction in Goldman Sachs as the premier U.S. investment bank, emphasizing the firm's dominant market position and reputation for handling high-stakes transactions. The fund's bullish thesis centers on anticipated regulatory changes under the Trump administration, which they expect will drive increased M&A activity and benefit Goldman's core advisory business. AHIA has significantly increased their Goldman Sachs position in anticipation of a more business-friendly regulatory environment that could reduce compliance costs and enhance profitability. The investment case highlights Goldman's extensive network and expertise as competitive advantages that position the firm to capture market share in an improving deal environment. The manager views Goldman's role in facilitating market efficiency and economic development as adding societal value beyond financial returns. The fund's increased weighting in the financial sector reflects their confidence in deregulation benefits for traditional banking institutions.

Pitch Summary:
Microsoft is at the forefront of AI, integrating it across all its business lines. One standout is their "Co-Pilot" subscription, an AI tool that enhances productivity within Microsoft Word, PowerPoint, and more. Their Azure cloud platform is among the best in enterprise computing and continues to drive significant growth. Beyond business, Microsoft is leading the way in sustainability, as they've already achieved carbon-negative status and aim to remove their entire carbon footprint by 2050, making a powerful impact on the planet. With innovation and leadership in AI, Microsoft is well-positioned to shape the future of both technology and environmental responsibility.

BSD Analysis:
AHIA maintains a bullish outlook on Microsoft, emphasizing the company's comprehensive AI integration across all business segments as a key competitive advantage. The fund highlights Microsoft's Co-Pilot subscription service as a standout product that enhances productivity within the Office suite, demonstrating practical AI monetization. AHIA views Azure as a best-in-class enterprise cloud platform driving significant growth, positioning Microsoft strongly in the expanding cloud computing market. The investment thesis extends beyond financial metrics to include Microsoft's environmental leadership, noting their carbon-negative achievement and ambitious 2050 carbon footprint removal goal. The manager sees Microsoft as uniquely positioned to lead both technological innovation and environmental responsibility. The company's partnership with Constellation Energy for clean nuclear power from Three Mile Island further reinforces their commitment to sustainable operations while meeting growing energy demands from AI workloads.

Pitch Summary:
Nvidia has been the stock to watch this year, and it's easy to see why. The company leads the semiconductor industry, providing the "brains" behind AI. Have you ever used ChatGPT? It's powered by Nvidia's chips. Nvidia is miles ahead of its competition and plans to release a new chip model every year, each far superior to the last. Beyond AI, their chips are also key in self-driving cars, gaming, and computing. Plus, Nvidia's technology is being used in groundbreaking areas like drug research, helping accelerate medical advancements for the betterment of society. With their products serving quickly growing markets, Nvidia is well positioned for the long term.

BSD Analysis:
AHIA expresses strong conviction in NVIDIA's dominant position in the artificial intelligence semiconductor market, emphasizing the company's technological leadership and competitive moat. The fund highlights NVIDIA's role as the foundational infrastructure powering major AI applications like ChatGPT, demonstrating the practical application and market adoption of their technology. AHIA's thesis is built on NVIDIA's aggressive innovation cycle, with plans to release superior chip models annually, maintaining their competitive advantage. The investment case extends beyond AI to include diversified applications in autonomous vehicles, gaming, and computing, providing multiple growth vectors. The manager particularly notes NVIDIA's contribution to drug research and medical advancements, adding a societal benefit dimension to the investment. AHIA views NVIDIA as the largest gainer in their 2024 portfolio, reflecting the company's exceptional performance in rapidly expanding markets with strong long-term positioning.

Pitch Summary:
Constellation Energy is the largest producer of nuclear energy in the U.S., controlling about 30% of the country's total capacity. While they're also involved in wind and gas, nuclear power is their core business. Recently, they made headlines with the Three Mile Island deal, providing clean energy to Microsoft which has high demand for reliable power. With nuclear capacity expected to grow 4% and demand skyrocketing, Constellation is positioned to see solid profitability in the coming decade.

BSD Analysis:
AHIA maintains a bullish position on Constellation Energy, highlighting the company's dominant 30% market share in U.S. nuclear power generation. The fund emphasizes nuclear power as Constellation's core competency while acknowledging their diversified portfolio including wind and gas assets. The high-profile Three Mile Island partnership with Microsoft represents a significant catalyst, demonstrating strong demand for reliable clean energy from major technology companies. AHIA's thesis is supported by favorable industry dynamics, including expected 4% nuclear capacity growth and skyrocketing energy demand driven by AI and data center expansion. The manager views Constellation as well-positioned to capitalize on the growing need for reliable, carbon-free baseload power. However, the fund acknowledges potential regulatory risks from the incoming Trump administration regarding the Inflation Reduction Act, which provides crucial tax incentives that have made nuclear power profitable.

Pitch Summary:
Garmin is a market leader in GPS devices and navigation systems. They are also bringing these products to multiple markets, including fitness & outdoor (watches), automotive, marine, and even aviation. The company's products are highly reliable and promote health and fitness, benefiting its users and society. As the company enhances its technology it will continue to reach more markets. If you need advice on a Garmin device for your boat, reach out to Andy – he'd be happy to discuss.

BSD Analysis:
AHIA expresses strong confidence in Garmin's diversified GPS and navigation technology platform across multiple high-growth markets. The fund emphasizes Garmin's market leadership position and the company's successful expansion into fitness, outdoor, automotive, marine, and aviation segments. The investment thesis highlights the reliability and quality of Garmin's products, particularly noting their health and fitness benefits which align with societal trends. AHIA views Garmin's technological advancement as a key driver for continued market expansion and penetration. The fund's bullish outlook is supported by Garmin's impressive 62.9% stock price appreciation in 2024, which surprised analysts with strong earnings performance. The manager's personal endorsement and expertise with Garmin's marine products suggests deep familiarity with the company's product quality and market positioning.

Pitch Summary:
Apple is the global leader in consumer electronics, known for their iPhones, iPads, Mac computers and other services. They're constantly innovating, and next up is "Apple Intelligence" – AI features designed to make their devices even smarter, improving productivity, connectivity, and entertainment. We invest in Apple due to its ability to maintain market leadership through innovation and its ability to protect their "ecosystem" of Apple products and services.

BSD Analysis:
AHIA maintains a bullish stance on Apple, emphasizing the company's dominant position in consumer electronics and its strategic move into artificial intelligence. The fund highlights Apple's upcoming "Apple Intelligence" features as a key catalyst for enhanced device functionality across productivity, connectivity, and entertainment. The investment thesis centers on Apple's proven ability to maintain market leadership through continuous innovation and its protective ecosystem strategy. However, the manager acknowledges potential headwinds from tariff policies under the Trump administration, noting that Apple's significant Asian manufacturing exposure could subject the company to substantial tariffs. This risk factor could impact product pricing, particularly for devices like the iPhone currently selling for $999. Despite these concerns, AHIA's conviction in Apple's long-term competitive advantages and innovation capabilities supports their continued investment in the technology giant.

Pitch Summary:
Zegona Communications has acquired Vodafone Spain through a leveraged buyout, aiming to unlock significant value via strategic asset sales and operational improvements. The company plans to monetize its fiber network by forming joint ventures with major Spanish telecom operators and selling stakes to infrastructure investors, which could lead to substantial deleveraging. Zegona's management, with a proven track record in the telecom sector, has already implemented cost-cutting measures and aims to enhance Vodafone Spain's profitability. The complex capital structure, including redeemable preference shares, offers a unique opportunity for significant equity appreciation.

BSD Analysis:
Zegona's acquisition of Vodafone Spain is strategically positioned to capitalize on the ongoing consolidation in the Spanish telecom market, which has seen a reduction in major operators, enhancing pricing power and reducing competitive pressures. The management's plan to monetize the fiber network through joint ventures with MasOrange and Telefonica is expected to generate proceeds of approximately €2 billion, facilitating the redemption of preference shares and reducing leverage. The company's focus on operational efficiencies, such as workforce reductions and renegotiation of tower leases, is projected to yield €320 million in annual cost savings. Despite the complex capital structure, the potential for a multi-bagger return is supported by the low acquisition multiple and the anticipated improvements in Vodafone Spain's financial performance. However, execution risks remain, particularly in achieving the projected asset sales and operational targets, which are critical for realizing the investment thesis.

Pitch Summary:
VusionGroup is making significant strides in penetrating the U.S. market, with 250 Walmart locations currently equipped with new ESLs, a number expected to reach 500 by the end of the year and 2,300 by 2026. Additionally, the company has announced new partnerships with prominent U.S. retailers, including Ace Hardware and Hy-Vee grocery stores. We anticipate further partnerships with additional U.S. retailers and project >30% topline growth through 2027.

BSD Analysis:
The manager highlights VusionGroup's successful U.S. market penetration strategy, particularly the significant Walmart partnership expansion. The company currently has ESLs deployed in 250 Walmart locations with aggressive expansion targets to 500 locations by year-end and 2,300 by 2026. This represents substantial scale in the world's largest retailer. Beyond Walmart, VusionGroup has secured partnerships with other major U.S. retailers including Ace Hardware and Hy-Vee grocery stores, demonstrating broad market acceptance of their electronic shelf label technology. The manager projects over 30% revenue growth through 2027, driven by continued U.S. market expansion and additional retailer partnerships. The investment thesis appears centered on VusionGroup's ability to capitalize on the digitalization trend in physical retail through their IoT solutions and electronic shelf label technology.

Pitch Summary:
Kaspi faced significant pressure during the quarter as headline risks from short reports by Culper Research spooked investors unfamiliar with the company, resulting in a single-day share drop of up to 22% following the report's release. The short report primarily raised concerns about secondary sanction risks, alleging that some Kaspi e-commerce sellers originated from Russia and that its banking services allow Russian citizens to open accounts. However, a closer analysis of the regulatory framework reveals that these claims are unfounded. There are no laws prohibiting Russian individuals from selling goods internationally, provided the products are not classified as critical resources subject to sanctions. Likewise, Russian citizens are legally permitted to open bank accounts abroad, as long as the bank does not facilitate money laundering. Kaspi, which primarily accepts deposits in Kazakhstani Tenge, has significantly less exposure to Russian accounts than many other domestic and foreign banks. Despite the noise from the short report, Kaspi remains our top investment idea, and we have taken advantage of the temporary market dislocation to increase our position in the company. Additionally, we anticipate further re-rating as one of the largest overhangs—future growth potential—nears resolution, driven by Kaspi's recent announcement of its acquisition of a 65.4% stake in Hepsiburada, Turkey's second-largest e-commerce platform. While the deal represents a significant premium over Hepsiburada's public market valuation, it strategically positions Kaspi in a market with a population over four times larger than Kazakhstan's and a considerably higher GDP per capita. Against this backdrop, the Turkish government's efforts to create a more level playing field for e-commerce players—including restrictions on the advertising spend of Trendyol, the Alibaba-backed leader in Turkish e-commerce—are likely to benefit Hepsiburada.

BSD Analysis:
The manager views Kaspi.KZ as their top investment idea despite recent short-seller pressure that drove shares down 22% in a single day. The short report raised unfounded concerns about secondary sanction risks related to Russian customers, which the manager debunked through regulatory analysis. Kaspi's exposure to Russian accounts is actually lower than many domestic and foreign banks, as it primarily accepts deposits in Kazakhstani Tenge. The manager used the temporary dislocation to increase their position size. The investment thesis strengthened with Kaspi's acquisition of 65.4% of Hepsiburada, Turkey's second-largest e-commerce platform. This strategic move provides access to a market four times larger than Kazakhstan with higher GDP per capita. Turkish government restrictions on market leader Trendyol's advertising should benefit Hepsiburada's competitive position. The manager expects significant re-rating as growth concerns resolve through this expansion.

Pitch Summary:
We have initiated a small position in Gigacloud. GCT specializes in cross-border e-commerce and logistics for furniture and bulky items, positioning itself as a leading B2B marketplace with a global footprint. Although the company is publicly listed and headquartered in the United States, it strategically capitalizes on the manufacturing capabilities of Asia and Southeast Asia to source high-quality, low-cost furniture and bulky items at just 20-25% of their retail price. On the surface, GCT might seem like another "too good to be true" Chinese business. This perception has been further amplified by allegations from two short sellers, Grizzly Reports and Culper Research, who claimed that GCT is a fraudulent enterprise and much less profitable than reported. However, third-party data, proprietary research, and due diligence confirm that GCT is a legitimate and highly profitable operation. In fact, it is a hidden category leader with a significant cost advantage and formidable barriers to entry that are expected to strengthen over time. Unlike most e-commerce giants, GCT faces virtually no direct competition, aside from a couple small startups. Companies like Alibaba B2B focus on different categories, while Temu, Shein, and Amazon concentrate on smaller, easy-to-transport consumer products, deliberately avoiding the bulky item segment due to its inherent logistical complexities—bulky items occupy significant space, are more difficult to manage, and present challenges for inventory control and on-time delivery. This is why you rarely see an Amazon Prime tag on furniture listings. GCT has not only mastered the complexities of the bulky item segment but also holds a significant cost advantage, with warehousing costs being a fraction of those at competing facilities thanks to its scale. This scale has also enabled GCT to outsource furniture shipping to companies like FedEx at rates 90%+ lower than standard shipping fees. Beyond the substantial upfront costs of building a logistics infrastructure, GCT has cultivated strong customer relationships through a network of over 200 product managers who oversee supplier partnerships in Asia and buyer relationships across Eastern markets. These relationships are highly sticky, driven by GCT's compelling value proposition as a scaled player: low flat-rate shipping costs, reliable on-time delivery, and seamless end-to-end supply chain management—all without requiring buyers to assume inventory risks. Importantly, the barriers to entry are set to grow even stronger as GCT's online marketplace continues to scale, leveraging and amplifying its network effects. Furthermore, the company's strategic expansion into Europe and adjacent markets, coupled with consistent market share gains, positions it to potentially double its current revenue and total addressable market within the next three years. Despite achieving a remarkable 5-year CAGR of 84% and delivering triple-digit ROTC, GCT currently trades at just 4.8x EV/EBIT, reflecting a significant "Chinese discount." We project at least 99% upside over the next three years, even under conservative assumptions of substantially slower growth and the an EV/EBIT multiple well below what investors would typically assign to a business of this caliber. As the market moves beyond its biases and begins to fully appreciate GCT's exceptional fundamentals, we anticipate a significant re-rating of the stock. Should the market fail to recognize its value, GCT is well-positioned to address its undervaluation through share buybacks, supported by a debt-free balance sheet, and $260 million in cash.

BSD Analysis:
The manager presents a compelling contrarian case for Gigacloud Technology, a cross-border B2B e-commerce platform specializing in bulky furniture items. Despite short-seller attacks questioning the company's legitimacy, the manager's due diligence confirms GCT as a profitable category leader with substantial competitive moats. The company benefits from minimal direct competition as major e-commerce players avoid the logistically complex bulky items segment. GCT's scale advantages include warehousing costs significantly below competitors and shipping rates 90%+ lower than standard fees through partnerships with FedEx. The business model features sticky customer relationships via 200+ product managers and strong network effects. With 84% 5-year revenue CAGR and triple-digit ROTC, the company trades at only 4.8x EV/EBIT due to Chinese discount bias. The manager projects 99% upside over three years as the market recognizes the quality of this hidden gem.

Pitch Summary:
During the quarter, Nagacorp reported a decline in gross gaming revenue, particularly in the premium and referred VIP segments, as it continues its transition into a mass-market gaming hub. The company also "ripped off the bandage" by recognizing additional impairment on its Vladivostok project in Russia—a necessary move, in our view. Although the stock continues to trade at a significant discount to its Macau peers, we expect the valuation gap to narrow as the new international airport facilitates more direct flights and boosts tourism, driving increased business for Nagacorp next year. That said, we are mindful that this quarter's underperformance occurred despite an overall improvement in Cambodia's visitation numbers. As a result, if the Chinese economy and tourism remain subdued, we will reassess our position and consider reducing our exposure, reallocating our capital to cash or other opportunities.

BSD Analysis:
The manager maintains a cautiously optimistic stance on NagaCorp despite recent headwinds. The company is transitioning from VIP gaming to mass-market operations, which pressured Q3 revenues. Management took a prudent approach by writing down the Russian Vladivostok project, clearing potential future impairments. The investment thesis centers on valuation arbitrage versus Macau peers and infrastructure catalysts. The new international airport in Cambodia should drive tourism growth and benefit NagaCorp's operations. However, the manager acknowledges execution risk if Chinese economic weakness persists, given the importance of Chinese tourism to Cambodia's gaming sector. The position appears sized appropriately given these uncertainties.

Pitch Summary:
Getting expensive capital to make risky loans; the Chairman and the CEO pledged 30% of the shares as collateral; insiders cashing out; extremely risky loan book; COO has no corporate experience; key merchants quietly failing; declining active customers; sketchy enrollment practices;

BSD Analysis:
Sezzle operates a BNPL platform. Shorts highlight subprime exposure, rising default rates, and competitive disadvantages against larger rivals like Affirm and Afterpay. Regulatory tightening on consumer lending practices poses structural risks. With small scale and reliance on capital markets, Sezzle faces liquidity challenges. Investors question whether the company can achieve profitability without diluting shareholders.

Pitch Summary:
Halyk Bank is the #1 bank in Kazakhstan and trades for 2.8x earnings / 0.9x book value. In Q3, Halyk Bank reported a 38% ROE (we assume lower on a normalized basis). The company just paid a second dividend for the year of $0.75 per share, which on top of a $2.25 dividend paid in June means we received $3 in dividends (and there is no dividend withholding tax in Kazakhstan) on a stock that traded at $15 at the start of the year (and the year prior we first bought Halyk at $13.4 and received a $2.25 dividend a few weeks later). Next year we anticipate at least a $3.20 dividend (this is mostly locked in, as the payout next year will be calculated as a percentage of this year's earnings) on top of mid-teens local currency earnings growth. Halyk has performed well through many economic cycles and is conservatively capitalized with a 19% CET1 ratio.

BSD Analysis:
The manager presents an exceptionally compelling value proposition in Halyk Bank, Kazakhstan's leading financial institution trading at remarkably attractive metrics of 2.8x earnings and 0.9x book value. The investment case is anchored by extraordinary dividend yields, with $3 in dividends received on a $15 stock representing a 20% dividend yield, and no withholding tax burden enhancing after-tax returns. The bank's operational performance is impressive with 38% ROE in Q3, though the manager conservatively assumes normalization at lower levels. The dividend sustainability appears strong with next year's $3.20 anticipated payout largely predetermined by the percentage-based calculation from current year earnings, providing visibility into continued high yields. Beyond the attractive current metrics, the bank demonstrates mid-teens local currency earnings growth potential while maintaining conservative capitalization with a robust 19% CET1 ratio, indicating strong balance sheet quality. The bank's proven resilience through multiple economic cycles provides confidence in the sustainability of returns. The combination of deep value metrics, exceptional dividend yields, conservative capitalization, and market-leading position creates an asymmetric risk-reward profile with substantial downside protection.

Pitch Summary:
TBC Bank is tied with Bank of Georgia in being the #1-2 bank in Georgia. TBC also has an Uzbekistan digital bank that is expected to generate 11% of total group profit in 2025 but has the potential to more than 3x its 2025 profit by 2028 – an opportunity that its stock, which trades at barely above book value (1.1x), does not price in. Uzbekistan is a former longtime closed economy that only liberalized and opened to foreign investment under a new leader in 2017, which has since spurred a major wave of growth in a large, 34 million population with only $3,000 GDP per capita (vs. $14,500 in neighboring Kazakhstan). In Q3, TBC's Uzbekistan business reported 99% y/y growth in loans while generating a 28% ROE (on its way to 40%+ per management's targets). Under the leadership of former longtime Tinkoff CEO Oliver Hughes (an incredible management pickup for TBC) and former Kaspi executive Nika Kurdiani, TBC Uzbekistan in just the past few months has rolled out a series of exciting products, ranging from a debit card modeled off Tinkoff Black/Kaspi Gold to a revolving credit card, fully along the timeline they communicated to investors at the start of the year. Kaspi failing to acquire local credit card network Humo and focusing instead on Turkey seems to leave the runway clear for TBC Uz's continued strong growth.

BSD Analysis:
The manager presents a strong bull case for TBC Bank centered on its undervalued Uzbekistan expansion opportunity and dominant Georgian market position. Trading at just 1.1x book value, the market fails to recognize the significant value creation potential from TBC's Uzbekistan digital bank, which is projected to generate 11% of group profits in 2025 with potential to triple by 2028. The Uzbekistan opportunity is particularly compelling given the country's recent economic liberalization since 2017, large 34 million population, and low $3,000 GDP per capita suggesting substantial room for financial services penetration. The business is already demonstrating exceptional growth with 99% year-over-year loan growth and 28% ROE, targeting 40%+ ROE according to management. The leadership team represents a significant competitive advantage, featuring former Tinkoff CEO Oliver Hughes and former Kaspi executive Nika Kurdiani, bringing proven digital banking expertise from successful regional players. Recent product launches including premium debit cards and revolving credit products demonstrate execution capability and market positioning. With Kaspi's focus shifting to Turkey rather than Uzbekistan, TBC faces reduced competitive pressure in this high-growth market, creating a clearer runway for continued expansion.

Pitch Summary:
In Q3, Bank of Georgia reported a 37% ROE in Georgia (though this had a benefit from abnormally low cost of risk; normalized ROE for the quarter was in the low 30s). Since our initial purchase in June 2023, the total return in Bank of Georgia stock with dividends reinvested has been 76%, yet the multiple on book value today is only marginally higher (1.1x vs. 1.0x); the growth has almost entirely come from strong growth, dividends/buybacks, and an extremely accretive acquisition of Ameriabank, the #1 bank in Armenia, that immediately boosted book value per share by 20%. Bank of Georgia has an incredible superapp, far better than what we have from the likes of BofA and Chase in the US, and Bank of Georgia's latest NPS was 67, up from 38 at the start of current CEO Archil Gachechiladze's tenure in 2019. Archil calls NPS "a part of our DNA and religion," which like with Kaspi is music to our ears as product-focused investors. After Georgia and Armenia, Bank of Georgia is also now on its hunt for its 3rd market. Longer term, we are very positive on Bank of Georgia and TBC Bank. We wrote about the setup in our Q2 2023 letter: two banks of roughly equal size comprising 80% of the market, both excellently run with very good products, in a fast-growing economy; and each with an exciting story outside of Georgia (Armenia and other future markets for Bank of Georgia, Uzbekistan and other future markets for TBC Bank). In particular we love Archil at Bank of Georgia and the NPS/product culture turnaround he has driven during his tenure there, with associated gains in market share across multiple categories like retail deposits and payments acquiring. Archil's ambition is for Bank of Georgia, a UK plc, to join the FTSE 100, which they are only a double in market cap away from doing so. It's not as far-fetched as it sounds, given that the current P/E is only 3.5x; some potential multiple expansion plus continued earnings growth would eventually get them there.

BSD Analysis:
The manager presents a compelling bull case for Bank of Georgia built on exceptional operational performance and attractive valuation metrics. The bank delivered a 37% ROE in Q3, with normalized ROE in the low 30s, demonstrating superior profitability in its core Georgian market. Since the initial investment in June 2023, the position has generated 76% total returns while trading at only 1.1x book value, indicating value creation through operational excellence rather than multiple expansion. The transformational acquisition of Armenia's leading bank Ameriabank immediately boosted book value per share by 20%, showcasing management's capital allocation skills. CEO Archil Gachechiladze has driven a remarkable product-focused transformation, improving NPS from 38 to 67 and creating a superior digital banking platform that exceeds major US banks' offerings. The bank operates in a duopoly structure with 80% market share alongside TBC Bank in a fast-growing Georgian economy. With expansion opportunities into additional markets beyond Georgia and Armenia, and trading at just 3.5x P/E, the bank offers significant upside potential toward management's FTSE 100 ambitions.

Pitch Summary:
Kaspi continues to perform strongly and is headed toward 25% earnings growth this year, with another ~21% for next year (before incorporating Hepsiburada), which puts the multiple on 2025 earnings at just 8x. Kaspi is now fully focused on turning around its acquired business in Turkey; our visit and broader research revealed both major challenges (the market leader in ecommerce, Trendyol, is a strong company with a large lead) but also substantial low-hanging fruit with regards to product, technology, financial services integration, culture, etc. that we expect Kaspi to firmly grasp. During the quarter, Kaspi was the subject of an entirely false but headline-grabbing short report, which we strongly responded to online and which was later repudiated by Kazakhstan's financial regulator; the report is a likely contributor to an overhang on shares and a hurdle for non-specialist investors to get through, but we expect the impact to fade over time as Kaspi continues to develop its business and post strong results.

BSD Analysis:
The manager maintains a bullish stance on Kaspi despite recent challenges, highlighting compelling valuation metrics with the stock trading at just 8x 2025 earnings despite 25% current year earnings growth and 21% projected growth next year. The investment thesis centers on Kaspi's dominant position in Kazakhstan's fintech ecosystem and the potential turnaround opportunity in Turkey through the Hepsiburada acquisition. While acknowledging competitive challenges from market leader Trendyol, the manager sees substantial operational improvements available through Kaspi's superior technology platform and financial services integration capabilities. The recent false short report created temporary headwinds but was officially repudiated by Kazakhstan's financial regulator, suggesting the negative sentiment is unwarranted. The manager's on-the-ground research and direct engagement with management provides confidence in execution capabilities. The combination of strong underlying business momentum, attractive valuation, and potential Turkish market opportunity creates a compelling risk-adjusted return profile. The manager expects the short report overhang to dissipate as operational results continue to demonstrate the business strength.