While investor focus remains on momentum-driven trends and macro headlines, the real story is unfolding elsewhere—across Asia’s misunderstood markets where disciplined stock pickers are finding quality businesses trading well below their intrinsic worth. This update shares how selective positioning in China and Indonesia is uncovering compelling long-term upside, even as broader sentiment turns away.
Fidelity Asian Values maintains its unwavering focus on disciplined value investing—seeking out well-run businesses, bought with a margin of safety. This strategy continues to reward patience and conviction, especially in underappreciated regions like China and Indonesia, where valuations are historically attractive.
China, though weighed down by negative macro narratives and geopolitical tensions, remains a powerhouse of human capital and technological capability. Investors may be sceptical, but the country’s global industrial footprint is expanding. From controlling 70–80% of Africa’s truck market to its 95% command of the global polysilicon supply for solar panels, China is demonstrating its supply chain strength and engineering depth. These are not marginal gains—they’re strategic footholds in key sectors.
The best time to invest in high-quality franchises is often when sentiment is lowest. A prime example is Yihai International, a dominant force in China’s hotpot condiment market and a critical supplier to restaurant giant Haidilao. Despite current consumer weakness, Yihai’s product relevance, operational execution, and growing market share across B2B and B2C channels make it a standout.
In Indonesia, the story is one of steady growth and resilience. With a supportive demographic backdrop and sound fiscal management, the country is nurturing high-quality businesses in niche, defensible markets. Fidelity’s holding in Surya Pertiwi—the leading distributor of TOTO sanitaryware—illustrates this well. With over 3,000 dealers and commanding up to 70% domestic market share in its segment, the company is poised to benefit from increasing affordability and low market penetration. Localised manufacturing and distribution give it a significant edge over international competitors.
While India and Taiwan have surged, Fidelity is approaching them with caution due to elevated valuations. In Taiwan, large-cap exposure to Taiwan Semiconductor Manufacturing (TSMC) offers a stable way to capture structural growth in semiconductors, without overpaying. In India, under-owned financials present pockets of value, especially among quality lenders with strong fundamentals.
Throughout market cycles, Fidelity Asian Values stays anchored to its core principle—investing in intrinsically strong businesses with competent leadership at attractive prices. By avoiding the noise and trusting a time-tested process, the strategy continues to build a resilient, high-conviction portfolio ready to deliver sustainable returns over time.
Fidelity Asian Values seeks to generate long-term capital growth by investing in undervalued, high-quality companies across the Asia ex-Japan region. With a contrarian mindset and a rigorous stock selection process, it targets overlooked businesses poised to outperform as markets realign.
