Annual Review - 2024
& Outlook for 2025
Happy New Year, everyone! In this article, I’m going to review the 2024 results and the market opportunities for 2025.
My returns for the year 2024 have been +26.62%.
Returns in Recent Years
2020: +56.54%
2021: +260.94%
2022: +41.53%
2023: +5.78%
2024: +26.62%
In summary, Halyk Bank and Chinese Fintech companies have been the biggest contributors to the positive returns, while shipping has been the biggest drag on returns.
I’ve traded much less compared to previous years. I have adjusted the weighting of the different companies in my portfolio, but there have been few sales or additions of new companies.
Stock Sales
I sold my entire position in Enquest PLC, a UK-based oil producer. The UK government’s changes to the tax regime in the Oil & Gas sector were more severe than I anticipated, and I ultimately decided to liquidate the position. The company remains very cheap, but I grew tired of staying invested in a country that is clearly doing everything they can to dismantle its oil sector.
I also held a position in metallurgical coal (Stanmore Resources), but I decided to divest most of it due to falling coal prices.
New Additions
Over the year, I added the Australian company Mitchell Services to my portfolio. I believe it’s an interesting opportunity, trading at low multiples with strong shareholder returns.
Here are some free articles discussing the idea:
Current Portfolio and Opportunities for 2025
Chinese Fintech (e.g., $XYF, $JFIN, $YRD...)
These companies primarily facilitate loans for other entities (mainly banks). While the sector isn’t particularly attractive due to its susceptibility to regulation in a country like China, they trade at ridiculously low multiples.
Not only are they extremely cheap, but they also generally offer strong shareholder returns. For example:
JFIN: Currently trading at $6.53, it paid $0.90 in dividends in 2024 (a 13.7% yield at current prices).
QFIN: Trading at $38.7, it paid $1.20 in dividends in 2024 (a 3.1% yield). Additionally, it has repurchased over 14% of its outstanding shares since June 2023 and has a $450M buyback program for 2025, equivalent to 7.5% of outstanding shares.
XYF: Trading at $8.41, it paid $0.34 in dividends in 2024 (a 4.04% yield). It also conducted a tender offer, repurchasing 2 million shares (4% of outstanding shares), and recently repurchased 6.35 million shares from a major shareholder (13% of shares). Overall, they’ve returned over 20% of their market cap to shareholders through dividends and buybacks in a single year.
Despite most of these stocks rising sharply over the past year, many of these companies still trade at just 2 times earnings. Among the companies I follow, these are likely the cheapest in the entire market and also offer excellent shareholder returns.
Yes, there’s regulatory risk—just as with any other company in China—but at these prices and with these shareholder returns, I believe those risks are overestimated.
Halyk Bank
A Kazakh bank listed on the London Stock Exchange (traded in USD). The stock is incredibly cheap, trading at 3 times earnings, while its profits have grown substantially in recent years (in USD terms). Its dividend policy mandates paying at least 50% of profits as dividends.
Currently, the stock trades at $20 and paid $3 in dividends in 2024. Its 2024 payout was about 55%, allowing its balance sheet to grow despite significant dividend payments. Dividends are paid from the prior year’s earnings, so the dividend from 2024’s net profit has not yet been distributed. Assuming the minimum 50% payout, the dividend for 2024 should be at least $3.30 (a 16% yield).
Hong Kong Stocks
The “eternal promise” of Chinese companies: always cheap, but almost always underperforming the S&P 500. Rather than lumping all “Chinese” companies into one category, I want to focus on certain Hong Kong-based companies that, in my opinion, shouldn’t be trading at such low multiples.
Many people don’t want to invest in China due to regulatory risk. It’s true that the market can overreact to that risk, but it does exist. However, in Hong Kong, there are many stocks where I don’t believe that the same level of “China risk” is justified. Some of these companies barely sell in China; in certain cases, they don’t even produce there, or at least have diversified production across countries like Vietnam or Malaysia, among others.
This last point is very important because, given Trump’s victory in the U.S. elections, it is possible that tougher tariffs against China will be imposed. By having some of their production outside of China, these companies could largely avoid those tariffs.
Examples:
Nameson Holdings: P/E 5, 16% dividend.
Dream International: P/E 4.3, 11% dividend.
Justin Allen: P/E 4.8, 7% dividend.
These are just a few examples—there are many other companies with a similar profile.
Shipping
Since shipping is where I’ve had the highest returns over the years, I’ll make a brief comment. Overall, I’m not optimistic about most shipping segments. Despite the geopolitical situation (the war in Ukraine, the Red Sea crisis), many sectors are experiencing fairly weak rates. Given that in several of these segments the orderbook has increased (tankers, dry bulk, containerships), combined with the potential end of some geopolitical conflicts and a possible trade war under Trump, I believe there is a significant risk that shipping rates—and consequently shipping companies’ profits—could plummet.
It’s true that share prices in many segments have fallen in recent months, such as tankers and dry bulk, but I still believe one must be cautious under these circumstances. In my case, I have reduced my position in shipping, although I still hold a significant position in Tsakos Navigation.
This article is very interesting for more information on the current shipping climate:
That’s all for now. I plan to write more frequently in 2025, so if you’d like to receive these articles for free, don’t forget to subscribe. Thank you for reading!
Hi Nate,
Thank you for this update. I liked it because your investments are out of pattern. It would be even nicer if you post your portfolio with the % of each position. Alternatively, if you don't want to do that, you could publish the 10 top position and the %. Thanks amd happy new year