About Nordic Asia

Nordic Asia is a Swedish investment company focused on long-term and strategic equity investments in market-leading Chinese companies with exposure to the domestic consumer market in China. By applying an investment model and processes for long-term ownership combined with a local investment organization in Shanghai, investment experience and a broad business network, Nordic Asia aims to identify and own a concentrated investment portfolio of around 20 companies. Nordic Asia's objective is to generate an annual return of 15% or more with a low correlation to the Swedish stock market over time. Nordic Asia invests only in listed companies with a market capitalisation of at least USD 1 billion that are trading on the Shanghai, Shenzhen, Hong Kong or US stock exchanges.

Nordic Asia currently has a management team based in Stockholm and access to an investment organisation on site in Shanghai. The company is managed according to a Nordic investment company structure with high standards of quality, transparency, documentation and decentralized ownership, where Nordic Asia offers Nordic investors a focused exposure to the growing domestic consumer market.

Local market presence

Local analysts

Nordic Asia has access to three local analysts in Shanghai who conduct company analysis, participate in conference calls and visit the companies.

Market Access

By operating on a local level, we can closely follow both macro and corporate events in real time.

Multiple partners

Through our partners, we have access to a number of analyst houses that provide us with high quality market and company coverage.

Investment strategy

Nordic Asia's investment concept is based on identifying market-leading companies with exposure to the growing consumer market in China. The growing middle class is expected to be an increasingly important pillar of the Chinese consumer market in the future and over the next decade this income class is expected to more than double, representing an increase of approximately 400 million new people in the middle class. Nordic Asia focuses on value creation by investing in portfolio companies which will generate long-term earning growth. This investment model is based on solid and fundamental company analysis and a good understanding of the market positions of the portfolio companies in the markets in which they operate. To apply the investment model, the Nordic Asia has built a dedicated investment organization with a local market presence in China together with strong operational experience and a well-established business network based in Shanghai.

Strategic themes

Nordic Asia's strategic portfolio composition is based on user behavior and needs of the modern Chinese millennial generation according to the following three themes:

Technology shift towards 5G

Nordic Asia believes that today's smartphones are a medium that enables digital consumers to quickly connect to portals, discover, research and consume products and services. The company's current core investment portfolio focus is based on the ongoing shift from 4G to 5G, with improved performance and new application opportunities. Nordic Asia intends to own companies that are both suppliers and manufacturers of next-generation smartphones.

Examples of portfolio companies:

 

 Xiaomi       

Local brands

In recent years, Nordic Asia has identified a clear trend that local brands in China are increasingly taking market share from foreign competitors. This can mainly be attributed to the improved quality of the customer experience of products and services. It can also be explained by the fact that local entrepreneurs and companies are more nimble in their industries and possess greater flexibility in developing new products, entering new sales channels and addressing the needs of new customer categories and niche verticals. Local brands have historically had a advantage over foreign brands in terms of price-to-performance as product quality improves.

Examples of portfolio companies:

 

          

Trading platforms

The modern consumer today consumes products and services through dominant platforms such as Alibaba, China Duty Free Group, WeChat, JD.com, Douyin and Alipay. On these platforms, brands and merchants are building online stores and creating marketing campaigns to both increase interaction with target audiences and drive targeted traffic to their sales channels both online and offline. Nordic Asia intends to invest in market-leading commerce platforms that lead the transition from individual commerce patterns to more connected commerce platforms, as well as to own companies with proximity to consumers through a combination of sales channels.

Examples of portfolio companies:

    

Selection process and decision making

For the selection of portfolio companies, Nordic Asia has established a clear screening process: from an investment universe of over 1 500 companies, a screening per sector and an internal watch-list of about 200 companies, divided into about 20 companies per sector. A further selection of 60 companies from the same watch list is then added to Nordic Asia's short list. The short-listed companies are continuously monitored, after which a target list is created and an internal analysis schedule is created to carry out a deeper analysis of the companies. A new target company is then selected.

Finally, once the internal analysis has been compiled, the target company is brought to Nordic Asia's internal investment committee for presentation to the investment team, after which an investment decision is made. The final investment decision is made and executed by the company's CEO.

Active monitoring and evaluation of the portfolio companies

After an investment decision has been made, a lead analyst is appointed to cover the portfolio company and meet continuously with the portfolio company, the portfolio company's industry experts, as well as continuously update the internal financial models with new relevant market information.

An evaluation is made continuously of the new active portfolio companies in relation to potential new target companies brought to the Investment Committee. If a portfolio company’s performance deviates significantly from Nordic Asia's analysis of the portfolio company's potential or at the time, a new target company offers a more attractive risk-adjusted return potential, Nordic Asia's current ownership position in the portfolio company shall be evaluated by the Investment Committee.

Interview with CEO Yining Wang

Current partners


Hong Kong Office
Nordic Asia Investment Group 1987 AB
Level 28, The Lee Garden Two, 28 Yun Ping Road, Causeway Bay, Hong Kong
Stockholm Office

Nordic Asia Investment Group 1987 AB

Sankt Eriksgatan 63 B, 5tr

112 34 Stockholm

www.nordicasiagroup.com

Shanghai Office

Nordic Asia Huaxia Bank Building

1207 256 Pudong S Rd,

Lu Jia Zui, Pudong, Shanghai