YB new stock pitches (Fri, Sep 12)

Wix.com Ltd. (WIX) represents a core business trading at a reasonable price with a free call option on Base44, which was acquired for $80 million but is now estimated to be worth approximately $1 billion. The investment thesis centers on Base44's potential in the no-code development space, with tracking data suggesting it could reach the same ARR by December 2025 as Lovable achieved by August 2024, while rumors indicate Lovable is attracting $4 billion valuation offers. The investor acknowledges uncertainty about whether no-code development is overhyped but believes it's worth the bet, particularly as they view the current market penalization of SaaS companies like Wix as extreme compared to peers. The position was built starting below $130 per share and has become the investor's largest holding, with the belief that the market may begin recognizing Wix's AI benefits through Base44, one of the fastest-growing companies in the space.

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Celestica Inc. (CLS) is a contract manufacturer focused primarily on data center hardware components as well as aerospace, defense, and industrial parts that reported impressive quarterly results in an uncertain macroeconomic environment driven by strong demand for networking switches, with 400-gigabyte switch demand remaining persistently strong while ramping 800-gigabyte switches provided additional upside. White box solutions in the networking industry are gaining market share against branded vendors due to their lower total cost of ownership and more flexible designs, and the company is expected to see estimate upgrades throughout the year as it continues winning new deals while existing hyperscaler programs ramp faster than anticipated, providing further earnings upside.

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Mandarin Oriental International Limited (MDO.L) is an iconic hotel brand controlled 88% by Jardine Matheson, currently transitioning to an asset-lite model under new CEO Laurent Kleitman who previously led Christian Dior perfumes. In H1 2025, the company reported strong performance with revenue per available room (revpar) up 11% and management fees up 14% to $41 million, while EBITDA increased 11% to $12 million. The company operates 44 hotels (10 owned, 34 under management agreements) with a robust pipeline of 30 hotels and 19 residences expected to open at 3-5 hotels per year until 2033, driving high single-digit to low double-digit growth in the management business. The key asset is the One Causeway Bay development in Hong Kong, a 24-floor skyscraper with 500,000 square feet of office space and 55,000 square feet of retail, estimated to be worth $1.8-2.1 billion despite previously being marketed for $3.85 billion in 2017. Management values total assets at $4.32 billion, which discounted 15% for real estate volatility gives $3.67 billion versus the current $2.5 billion market cap, representing 43% upside. The management business is valued at $288 million using 12x EBITDA on projected $24 million EBITDA with expected 10% annual growth. Key catalysts include the sale of One Causeway Bay in H2 2026/2027 with proceeds distributed as a special dividend, or a potential buyout by Jardine Matheson as part of their strategic shift from owner-operator to capital allocator, with total upside potential of 40-60%. Risks include geopolitical tensions in China (mitigated by global diversification), an Asian economic slowdown affecting hotel earnings, and the possibility that Jardine Matheson takes no action with their controlling stake.

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