– A less visible and safer bet on China reopening.
– Provider of VAT tax refund services for international travelers, ~70% market share.
– Essentially a small royalty on travelers purchasing luxury goods abroad.
– As China re-opens profits will inflect above pre-COVID.
– Some re-opened regions are spending 3x on like for like basis through GB vs what they were pre-COVID.
– This business has 80% incremental margins from any new revenue, >40% EBITDA margins, and 85% FCF conversion.
– Currently trades <10x 2019 EBITDA, without any credit for dramatically higher luxury goods prices or cost take-outs since then.
– As China reopens, GB could do $1+/share of FCFresulting in a $20+ stock.
Exp. gain: 200% to $20/share.
Full write-up (free guest account required):