Barron's Streetwise Sep 25, 2026
With Andrew Lapping, Chief Investment Officer at Ranmore Fund Management
Ranmore Fund Management's biggest allocations are in Asia, and within Asia in China and Hong Kong. Andrew Lapping said he can buy founder-run Chinese companies with net cash without paying the 25 times earnings investors might expect for businesses like that.
US investors are pouring money into AI. Asked whether the stocks he likes would take investors away from AI, Lapping said "Very much so," and described a portfolio built in markets that local investors have given up on, from Hong Kong to the Philippines.
"And you've got to think when the locals hate the stock market, that's when you should go looking."
Andrew Lapping, chief investment officer at Ranmore Fund Management, on Barron's Streetwise, in part of a recent conversation the show played after its interview with London Business School professor Alex Edmans. His fund owns Philippine and Indonesian banks, TravelSky and Haier Smart Home, and he put its weighting to China at "probably 16% of funds."
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Key Takeaways
Founder-run Chinese companies with net cash are cheap because Chinese investors have soured on their own market
The founder often still owns half the shares and takes money out through big dividends
A company with debt of 4 times EBITDA is either not generating cash or is buying other companies, Lapping said
Pernod Ricard, Diageo and Constellation Brands once traded at 25 times earnings and now sell at 7–8% free cash flow yields
Philippine banks earning 12–14% returns on equity trade for less than book value
Haier spends 3–4% of revenue on research and development and does not buy back stock; he held up Whirlpool as the opposite case
China's risks are real, from intense competition to the VIE ownership structure and the question of Taiwan
The US is about 70% of the MSCI World Index but, by his estimate, only 20–25% of world GDP
1. Away From AI, Into Asia
The host asked whether the stocks Lapping likes would take investors away from AI. He started with where Ranmore has the most money: Asia, and within it China and Hong Kong.
The businesses he wants are run by their founders
"Some guy started a business 30 years ago in his garage, he still owns half the shares. So that's true alignment with other shareholders, and you're getting an entrepreneur." — Andrew Lapping
These companies pay big dividends, he said, because that is how the founders take money out. They are strong in their markets, they are growing and they carry net cash on their balance sheets.
Chinese investors' dislike of their own market keeps them cheap
The usual objection is that everyone wants a company like that, so it will cost 25 times earnings. Lapping said that is not the case in China.
"Luckily in China, people don't love stocks because the Chinese stock market, as I'm sure you know, has been incredibly poor for a long time." — Andrew Lapping
