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How H.E.R.O. Innovators en-Japan, Chroma ATE, Innodisk, cultivate “sapere vedere” to develop the deep insights required to solving customers’ problems

H.E.R.O. HeartWare: Weekly Asia Tech News – 11 June (Issue 5)

When asked for his secret, Leonardo da Vinci would characteristically respond with the phrase he conceived and adopted as his personal motto: Sapere vedere. The phrase combines the Latin “sapere”, which means knowing how, and “vedere”, which means to see. Sapere vedere is knowing how to see. People with sapere vedere look forward as well as inward; they are capable of believing and seeing what others don’t. Knowing how to see, is crucial to living a life of significance. H.E.R.O. Innovators cultivate sapere vedere to develop the deep insights required to understanding and solving customers’ problems.

This week, Michikatsu Ochi, founder and chairman of en-Japan (TSE: 4849, market cap US$2.3bn), the pioneer in the field of Internet-based job advertising, shared how he looked inward and forward to pursue an unconventional entrepreneurial approach in disrupting then the incumbent giant rival Recruit Holdings by building its websites with a focus on users (job hunters) over its clients (companies looking to recruit staff). The superior quality of information on its sites produced with the user in mind and the attention to the detail has resulted in improved response rates to listed ads. Having created a positive cycle to increase membership (leveraging selling power, job listings, and market share), each time a heavy demand period comes around, the company can effectively use promotional spending to further improve its market position. Due to the difficult and tight hiring environment in Japan, without a certain number of applicants, companies cannot find suitable hires. en-japan provides companies with enough applicants, leading to higher prices in a positive feedback loop.

Leo Huang 黃欽明, Chairman & CEO of Chroma ATE 致茂電子 (TSEC: 2360, market cap US$2.2bn), one of the global leaders in automatic test equipment, including the global #1 leader in power electronics test solutions, shared Chroma’s competitive edge is its “insight into the customer’s next-step development and design solutions that will be provided to customers as early as possible before the customer goes into mass production.” Randy Chien 簡川勝, Chairman & President/CEO of Innodisk 宜鼎國際 (GTSM: 5289, market cap US$385m) one of the few memory module manufacturers in the world focused on non-consumer storage products such as industrial control, enterprise and aerospace defense applications, shared Innodisk’s competitive edge comes from the “power to understand the requirements of specialized markets and help accelerated the launching of our customers’ products. The industrial control market emphasizes customer service and customization, and the market is difficult to enter.”

This week in H.E.R.O. HeartWare: Weekly Asia Tech News (Click to Download PDF) with brief highlights of the inspiring entrepreneurial stories of tech leaders in Asia whom we have been monitoring over the past decade in our broader watchlist of around 200 listed Asian tech companies and our focused portfolio of 40 HERO Innovators, we have:

(1) Michikatsu Ochi 越智通勝, founder and chairman, and Takatsuga Suzuki 鈴木孝二, CEO of en-Japan (TSE: 4849, market cap US$2.3bn), the pioneer in the field of Internet-based job advertising with the launch of the first job information website in Japan in 1995;
(2) Leo Huang 黃欽明, Chairman & CEO of Chroma ATE 致茂電子 (TSEC: 2360, market cap US$2.2bn), one of the global leaders in automatic test equipment, including the global #1 leader in power electronics test solutions;
(3) Randy Chien 簡川勝, Chairman & President/CEO of Innodisk 宜鼎國際 (GTSM: 5289, market cap US$385m) one of the few memory module manufacturers in the world focused on non-consumer storage products such as industrial control, enterprise and aerospace defense applications;
(4) Tony Klim, CEO of Bravura Solutions (ASX: BVS, market cap US$546m), a leading provider of software solutions for the wealth management, life insurance, and funds administration industries with more than 350 direct and indirect blue-chip clients entrusting over A$2.8 trillion in assets to its platform systems.

We now live in an exponential world, and as the Baupost chief and super value investor Seth Klarman warns, disruption is accelerating “exponentially”. We believe tech-focused innovators are the most relevant investment trend and opportunity over the next decade. Yet we do not want to chase the highly popular megacap tech stocks, or fall for the “Next-Big-Thing” trap by chasing to invest in fads, me-too imitators, cash-burning start-up tech companies. We see a distinct opportunity in underappreciated Asian SMID-cap tech stocks with unique scalable business models run by high-integrity entrepreneurs with a higher purpose in solving high-value problems.

H.E.R.O. stands for “Honorable. Exponential. Resilient. Organization.” and is operationalized into a unique, systematic 4-step investment process to identify the winners at the ARCHEA Asia H.E.R.O. Innovators Fund, the only Asian SMID-cap tech-focused fund in the industry. The H.E.R.O. HeartWare Weekly highlights interesting tech news and listed Asian emerging tech innovators with unique and scalable wide-moat business models to keep yourself well-informed about disruptive forces and innovation, new technologies and new business models coming up, and the companies that ride on and benefit from them in some of the most promising areas of the economy in Asia as part of our thought leadership for our ARCHEA Asia HERO Innovators Fund to add value to our clients and the community.

Some of the HERO Innovators in the focused portfolio include the largest online-to-offline pet insurance company in Japan with over 60% domestic share of the growing pet insurance market with over 636,000 policies in force generating over 98% sticky recurring revenue income & cashflow (Japanese households own 20m pets and only 1.3m or 6.3% were insured vs 22% of the 15m pets were insured in UK), and is a tech innovator with services that include allowing insurance claims to be made via LINE in just three minutes, an industry first, enabled by its powerful database & analytical prowess of more than 10 million insurance claims tied to illnesses and accident that allow the company to propose preventive measures by examining how animals become sick and how accidents occur. This highly profitable online pet insurance with a healthy net-cash balance sheet founded by an inspiring and down-to-earth entrepreneur with an agricultural economics background who started his career at a top insurance company is an archetypal H.E.R.O. Innovator.

Hope you find the weekly report to be useful and insightful. Please give us your candid feedback and harshest criticisms so that we can improve further to serve you better. Besides the BATTSS (Baidu, Alibaba, Tencent, TSMC, Softbank, Samsung), do also tell us which Asian tech entrepreneurs & CEOs whom you admire and respect and why – we will endeavor to do up profiles of them for sharing with the community. Please email kb@heroinnovator.com on your thoughts, thank you very much. Have a beautiful week ahead.

Warm regards,
KB

The ARCHEA Asia H.E.R.O. Innovators Fund (www.heroinnovator.com) is the only Asian SMID-cap tech-focused fund in the industry. H.E.R.O. stands for “Honorable. Exponential. Resilient. Organization.” and is operationalized into a unique, systematic 4-step investment process to identify the winners. The investment objective seeks to capture long-term investment returns created by disruptive forces and innovation by focusing on high-quality and liquid listed equities in the Asia-Pacific region that ride on and benefit from them. Through our cross-sector and in-depth fundamental research process, the Fund aim to provide access to companies whom we believe are run by high-integrity, honorable and far-sighted owner-operators with a higher sense of purpose in solving High-Value Problems for their target customers and society, and have unique, scalable and wide-moat business models with sustainable competitive advantages and innovative products, services, and processes to create, expand and service their total addressable market, including the resiliency and balance sheet strength to maintain or grow profitability, pricing power and market positions through up/downturns in the economy.

The ARCHEA H.E.R.O. Innovators Tech Fund is a UCITS V fund domiciled in Luxembourg, and is available to both retail and accredited investors in Europe (including Switzerland, Germany, France, Denmark, Belgium, Luxembourg) and qualified offshore investors worldwide. UCITS stands for the Undertakings for the Collective Investment of Transferable Securities and is a regulatory framework of the European Commission that creates a harmonized regime throughout Europe for the management and sale of mutual funds. UCITS funds can be registered in Europe and sold to investors worldwide using unified regulatory and investor protection requirements. The ARCHEA Asia HERO Innovators Fund is now in the pre-launch stage, subject to regulatory approval. We will also be registering the funds under MAS CISNET for distribution in Singapore. Our target fund launch date for the Founders’ Series is in September 2018.

Together with my highly experienced business partner Mr. Loo Cheng Guan, we are progressing in our partnership with our Swiss partner Dr. Alain Würgler’s Bellatrix Asset Management to launch the HERO Innovators Fund under their UCITS V umbrella fund structure domiciled in Luxembourg for distribution to retail & qualified investors in Europe, and qualified non-Europe investors worldwide. We have secured capital commitments from several institutional and high net-worth investors. Once we have gotten our ticker code and approval from the regulator for our UCITS fund, interested long-term partners can simply buy or sell units in the fund, just like the buying or selling of listed shares, by approaching any bank of your choice with the ticker code and wire the funds into an independent custodian bank. As a strictly regulated UCITS fund, there is daily liquidity to buy or sell, and we have zero exit fees. If you are interested to participate in the exponential growth of the H.E.R.O. Innovators who are solving real-world high-value problems and have helped create what the world around you looks like today and tomorrow, please contact KB by email or whatsapp.

How to Know If We are Right for Each Other? 

You are an intelligent high net-worth investor, business owner, family office, institutional investor, allocator, or financial advisor who want to:

  • You want to learn and be well-informed about disruptive forces and innovation, new technologies and new business models coming up, and the companies that ride on and benefit from them in some of the most promising areas of the economy, and feel more confident in your knowledge in how these innovators are indispensable in the well-being of your daily life.
  • Yet, you do not wish to follow the crowd like everyone else to herd in the highly popular mega-cap tech stocks.
  • And you definitely do not want to fall for the Next-Big-Thing trap by investing in fads, me-too imitators, cash-burning tech companies, or even in seemingly cutting-edge technologies without the ability to monetize and generate recurring revenue with a sustainable and scalable business model, and you want to know how to distinguish between the true innovators and the swarming imitators.
  • You want to be proud of the entrepreneurs and owner-operators running the companies whom you invest in to generate sustainable returns, that they are honorable, high-integrity, far-sighted, and have a higher sense of purpose in solving High-Value Problems for their target customers and society, and have unique, scalable and wide-moat business models with sustainable competitive advantages and innovative products, services, and processes to grow profitably through up/downturns in the economy.

Ready to find out more about H.E.R.O.?

To make an appointment with KB to find out more about the H.E.R.O. investment and business model innovation framework, investment strategy & process, please click here or email kb@heroinnovator.com or whatsapp +65 9695 1860.

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About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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