Our downside protection comes from:
Focus on healthcare companies in China with high sustainability and predictability in growth;
Deep industry knowledge by specializing in one sector;
Extended Due Diligence on company, key shareholders, and key management members;
Buying in at a discount;
Continuous enhancement activities to create value while mitigating risks.
We strive to generate healthy returns (20-30%
annually) through a company's organic growth, and our value creation programs.
In the subsectors where Harmony has rich expertise and industrial resources,
we can quickly add value to the companies through benchmarking, comparative
analysis, and most notably, by introducing strategic opportunities. Harmony has
developed a proprietary system for analyzing the value creation potential,
receptiveness of the board, and execution capability of a company, which are
the three key elements in our successful investments.
Constructive Activism means making deep-value investments in companies, accompanied by developing and implementing comprehensive value enhancement plans in an approachable fashion.
We seek to create value in the following aspects of a company:
1. Corporate Governance and Shareholder Structure
2. Strategy Development and Execution
3. M&A and Strategic Alliance
4. Financial and Operational Efficiency and Investor Relations.
Harmony invests in
small to medium cap healthcare companies which are often overlooked and
discounted by mainstream institutional investors. The Harmony team typically
performs years of due diligence on the subsector and companies, and then
purchase more than 5% of the company's shares. By working with the board and
management team for a typical holding period of 3-5 years, Harmony seeks to
grow the company from a regional player into a national or even global leader.
We typically assign a team of three managers to each investment as strategic consultants, meaning we hold shares of 8-10 stocks at a time.