A global dairy giant acquired a 4% stake and the two companies subsequently entered into a joint venture to produce and distribute yoghurt in China, in which the Chinese company gained an 80% stake. Ongoing collaboration with the global company on R&D and improvements to the supply chains of its baby formula and pasteurised milk business, additional partnership with a Danish dairy company, plus its entry into the baby food market, has helped its stock price rise 45.76% from early 2012 to August 2017. This typifies the disciplined, efficient, growing and sustainable companies that we seek in Emerging Markets. The stock appeared expensive at first, because the company was investing for future growth rather than focusing on short-term gains.
These case studies are examples of companies we have either held or engaged with.
Source: Hermes Investment Management