Company Reports

In January 2016, ACE acquired Chubb in a deal valued at about $28 billion and assumed its name. From a long-term perspective, we were most enthusiastic about the fact that the combination created a moaty international insurer with exposure across most insurance lines for the first time, marking Chubb as potentially the most attractive long-term core holding in the space from a fundamental point of view.

Postal Savings Bank of China boasts a strong retail deposit base with market share of 9.5% in China. Its strong deposit base was supported by its inherent advantage in the rural banking market because of its long-term operations in postal savings and remittance outlets. It operates the largest branch network, covering all cities and nearly 99% of counties. The strong deposit base does not come without costs. PSBC must pay agency fees to its parent for deposits absorbed through agency outlets that were owned by its parent, which contribute over 60% of total deposits, making its overall funding costs higher than those of the moaty Chinese banks.

Vodafone is a telecommunications conglomerate in more than 20 countries around the world. Its most important markets are Germany and the United Kingdom. Vodafone has historically been a mobile player, but in the last decade it carried out several deals to solidify its fixed-line presence, acquiring two cable networks in Germany: Kabel Deutschland (2013) and Liberty Global Germany (2019). As of 2024, Vodafone is seeing headwinds in Germany due to regulatory changes in the housing market: in the past, thousands of rental contracts came in with Vodafone as a preset broadband and TV provider. The new regulation allows tenants to choose and many are moving to other operators, with Deutsche Telekom being the main beneficiary.

Unlike many other sportswear brands that diversify across multiple categories, Asics concentrates heavily on performance running, generating approximately 50% of its revenue from this segment. This specialization has enabled Asics to establish a strong brand image among runners, facilitating its growth from a local Japanese brand to a global leader in the running shoe industry. This success is highlighted by Asics' command of more than 10% of the global performance running market, a notable achievement given its modest 1.4% share of the broader global sportswear market.

Pro Medicus’ strategy revolves around renewing existing contracts and winning new clients for its main product, Visage 7, while increasing its price point. The company won six out of six major public tenders it competed for in fiscal 2021, which often involved on-site pilot tests. While this likely highlights Visage 7’s current superior speed, scalability, and resilience, continued investment in research and development is imperative for the firm to remain at the forefront of innovation and consistently win contracts. Most of the firm’s expenses are allocated to over 40 software engineers with the main R&D center located in Berlin. The company also recently extended its R&D capability in New York in collaboration with NYU Langone Health in 2021. Its R&D efforts mostly revolve around software enhancements, program extensions, and research in artificial intelligence to assist in diagnoses.

For the first time in more than two decades, almost all of Public Service Enterprise Group's earnings are from its regulated transmission and distribution businesses in New Jersey, giving it a risk profile similar to most US utilities.

Through continued research, development, and marketing, we expect General Mills’ portfolio of strong brands to maintain an intangible edge. This investment helps products sell well, driving traffic that entrenches the company's relationships with retailers. In many categories, General Mills has not only the top brand but also several leading brands that together create a dominant companywide share. For example, top brand Cheerios holds about 11% of the US ready-to-eat cereal market, contributing to the company’s leading nearly one-third market share in calendar year 2023, according to Euromonitor.

Equinix is the largest third-party data center provider in the world. We expect the firm to continue to benefit from major secular trends, such as increasing data usage, a greater need for connected data applications and computing, an increasing push to cloud computing, and advancing artificial intelligence capabilities.

Digital Realty is transforming from a wholesale provider of data center space to a few very large customers into a more diversified co-location business offering space, power, and connectivity to many different customers. Its new identity will allow it to benefit from major secular trends such as increasing data usage and an increasing push toward cloud computing and artificial intelligence.

Sodexo Group is the second-largest food servicer globally, also providing facility management services to clients. Food services is its largest division, contributing 64% of group revenue. Sodexo spun off its benefits and rewards business, Pluxee, in February 2024 to focus on food services. In the move, Sodexo also announced it will be more selective in facility management.

BOC Aviation’s role as an aircraft leasing firm is mainly to provide liquidity to global airlines, either through operating leases or financing arrangements, in their access to aircraft. Rather than lock up their capital in fixed assets, airlines increasingly opt to lease aircraft. Based on data from Ascend Analytics and BOC Aviation, the proportion of the global airline fleet on operating leases has risen to 52% in 2023 from 23% in 1990. We expect BOC Aviation’s market share to be stable, so its volume of leases should at least track global commercial fleet growth of about a 2.9% compound annual growth rate through 2033, based on Oliver Wyman data.

EVgo is a leading owner-operator of fast-charging direct current stations in the United States.

Carnival remains the largest company in the cruise industry, with nine global brands and 92 ships at the end of fiscal 2023. The global cruise market has historically been underpenetrated, offering cruise companies a long-term demand opportunity. Additionally, the ability to reposition and redeploy ships to faster-growing and underrepresented regions like Asia-Pacific had helped balance the supply in high-capacity regions like the Caribbean and Mediterranean before the pandemic, a factor that the firm can again choose to utilize to help optimize forward pricing. Although European demand and occupancy is converging on normalized levels, we believe there is still support for improving economic performance at Carnival.

Carnival remains the largest company in the cruise industry, with nine global brands and 92 ships at the end of fiscal 2023. The global cruise market has historically been underpenetrated, offering cruise companies a long-term demand opportunity. Additionally, the ability to reposition and redeploy ships to faster-growing and underrepresented regions like Asia-Pacific helped balance the supply in high-capacity regions like the Caribbean and Mediterranean prior to the pandemic, a factor that the firm can again choose to utilize to help optimize forward pricing. Although the European demand and occupancy profiles are converging on normalized levels, we believe there is still support for improving economic performance at Carnival.

Liberty targets a broader customer base compared with conventional banks, including nonconforming borrowers who cannot meet the traditional standard lending criteria of Authorized Deposit-Taking Institutions, or ADIs. To compensate for the additional risks, either because of the loan type or borrower profile, Liberty charges higher interest rates.

Compass Group is the largest food service firm globally and also provides support services to clients. Food services, its largest division, contributes 85% of group revenue. Compass exited nine countries in 2023 to focus on its most profitable markets.

Roblox operates an online video game platform that lets gamers create, develop, and monetize games for other players. The firm offers developers a hybrid of a game engine, publishing platform, online hosting and services, marketplace with payment processing, and social network. Roblox is highly accessible as there is no entry cost to try out Roblox or the vast majority of user-developed games. Thus, to drive booking growth and keep the Roblox model churning along, the new user must purchase and spend Robux, the platform’s tender.

Founded in 1956, Fair Isaac Corporation, or FICO, established itself as the industry leader in credit scores, which turned out to be a very lucrative business. Credit scores are used for more than just individual lending decisions; they are benchmarks used by investors, lenders, and the industry overall.

We view Nike as the leader of the athletic apparel market and believe it will recover from its recent problems, such as a lack of product innovation, soft demand for sportswear, and a CEO change. Our wide moat rating is based on its intangible brand asset, as we believe it will maintain premium pricing and generate economic profits for at least 20 years. Nike, the largest athletic footwear brand in all major categories and in most markets, dominates areas like running and basketball with popular shoe styles. While it does face significant competition, we believe it has proven over a long period that it can maintain share and pricing.

BeiGene is an emerging Chinese biotechnology company with a global leading position in hematologic cancers thanks to its core drug Brukinsa. Since its approval in 2019, Brukinsa’s stronger efficacy and superior safety profile have allowed BeiGene to gain market share from existing drugs. In the next five years, we expect Brukinsa to continue contributing more than 50% of BeiGene’s total revenue.