NagaCorp (3918.HK) in Kathmandu Capital 2024 Q2

Recovery in Tourism and Strategic Positioning in Cambodia

Apr 15, 2025

Summary

Investment rationale: Positioned to benefit from the recovery in tourism and strategic international ties.
Market positioning: Regional monopoly with potential for rerating as debt is paid down.
Risks and challenges: Market's low expectations and geopolitical uncertainties.
Recent performance: Traffic at Naga 1 and 2 trending towards pre-COVID levels.
Future outlook: Potential 100%+ share price upside by 2029 as tourism recovers and business evolves.

In Kathmandu Capital's 2024 Q2 letter, NagaCorp (3918.HK, Financial) was highlighted as a deep value gem, benefiting from the recovery in tourism and strategic international ties. The fund conducted extensive due diligence, confirming that traffic at Naga 1 and 2 is trending towards pre-COVID levels, supported by a significant increase in Chinese tourism and Phnom Penh airport arrivals. The company is expected to benefit from Cambodia's strengthening international ties and foreign direct investments, which bode well for its long-term prospects.

"We believe the regional monopoly is on track for a rerating once it pays down its July 2024 debt overhang. Additionally, as tourism recovers and Nagacorp evolves into a more organic business in the post-junket world, we foresee a 100%+ share price upside by 2029 for investors patient enough to wait." — Vincent Lo, Kathmandu Capital, 2024 Q2 Fund Letter

Read full letter at gurufocus Kathmandu Capital 2024 Q2 page.

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