YB new stock pitches (Wed, Jul 15)

Avation PLC (AVAP.L) is an aircraft leasing company trading at 135p, a 53% discount to its official NAV of £2.83, though Oak Bloke argues the true 'fair value' is £4.20 per share (a 68% discount)—comprising +£1.20/share of true aircraft values (reflecting purchase rights based on recent realized gains and rising aircraft values) plus +20p/share from FY26 buybacks. The bull case rests on strong global travel demand and aircraft delivery backlogs making leasing fleets highly valuable, a growing operating margin of 52.7% in 1H26 (up from 35% a year prior), and a completed refinance to 2031 that eliminates the ~$10m/year IFRS9 debt modification hit. Aggressive buybacks have reduced share count from 66.6m (30/6/25) to 62.3m (31/12/25) to 59.85m today, though 4.2m warrants at 114.5p remain outstanding expiring October 2026. The 13th July 2026 trading update showed static cash balances of $105m in 2H26, $130m of debt paid down in the 11 months to 31/5/26 (~$60m to June 2026), and $9m of buybacks, implying roughly $69m of cash generation—a near-doubling versus $40m in 1H26, potentially higher given deposits on 5 aircraft orders in 2026. The fleet stands at 33 aircraft (same as 1H26), growing to 36 by end of 2026 and 46 by end of 2029. Against the bear case (echoing AI-generated arguments that AVAP deserves its discount due to complexity, leverage, and illiquidity), the author counters that turboprops are less so in 2026 than 2019, that the discount is now far larger than historically, and that rival NYSE:AL was recently acquired for cash at only a 20% discount to NAV—questioning why AVAP's discount is so much wider.

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Samyung Trading (002810.KS) is a Korean holdco trading at 5x EPS with a negative enterprise value, sporting a 342B market cap against 344B of net cash and securities plus another 78B share of JV cash. The crown jewel (~80% of profits) is its 50/50 JV with Essilor Luxottica running Essilor's Korean operations—an exceptionally high-quality (50% ROE), recession-resilient, dominant and growing franchise; at 12x EBIT, Samyung's share of the JV is worth 180% of the market cap, ignoring the JV cash, the profitable chemical business, and the holdco cash worth another market cap (for reference, ESL trades at >20x EV/EBIT). While the business is obviously undervalued (as are many Korean names), the key angle is the incremental capital return story: after running as a traditional cash-hoarding value trap for most of the past decade, Korea's Value-Up reforms are changing the playbook, with Samyung disclosing a corporate value enhancement plan in 2025, hiking its dividend 70%, and declaring itself a 'High Dividend Company'—a status granting favorable dividend taxation to domestic shareholders and tax incentives to the corporation, making reversion to a low-payout model difficult. Samyung qualifies via the alternative test (payout ratio >25% with continued dividend growth) rather than the 40% payout test, but the rules create a built-in ratchet effect forcing transition toward a 40% payout, and management noted on the May 26 call it will keep increasing dividends by double digits; at a 40% payout it becomes an ~8% yielder growing double digits annually. Given the MSCI Korea High Dividend Yield Index yields 2.2%, an 8% yield would be exceptionally high, and the stock is a double if the yield compresses to a peer-normal 4%; additionally, an activist is involved and ESL has a history of consolidating partners.

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Protasco Berhad (PRTASCO.KL), a Malaysian road-maintenance microcap with a ~RM100m market cap at ~RM0.20/share, trades at a fraction of book with a large cash position and hinges on one binary catalyst: the renewal of its core Roadcare concession, which maintains 7,263km of federal roads across Malaysia and whose 10-year concession expired Feb 16, 2026, now running on a one-year interim agreement to Feb 16, 2027 while the government finalizes a new deal. Roadcare is 51%-owned by Protasco, with 28% held by the investment arm of the Royal Malaysian Police Cooperative (funding pensions for ~95,000 police), providing political armor, and operates a decentralized depot network with contractual obligations to secure landslide sites within an hour and restore passage in 24 hours—difficult for a new entrant to replicate. FY2025 screens at ~1.3x P/E on RM70m earnings, but that is flattered by the disposal of the university unit; stripping it out yields normalized earnings of ~RM42m, or ~2.3x P/E—cheap, though only the concession makes money while property, hospitality, and construction have bled every year. Historic payout ran 45-70% of earnings, so 50% of RM42m (~RM21m) implies a >20% yield, and a re-rate to a 10% yield would double the stock, though nothing has been paid since 2018 (dividends were paid and halted twice). The managing director owns 30% and gets paid via dividends (Malaysia has only 2% capital gains taxes). The downside is backstopped by RM250m of property at net book value against the ~RM100m market cap—including freehold land 30 minutes from KL airport (last valued in 2002), a hotel, mall, condos, and academic block, plausibly worth RM200-300m—which is what you own if the concession thesis breaks. This is the author's #4 position, expected to play out October 2026-March 2027.

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