MLN – December 2018 monthly update

1
Monthly Update
December 2018
MLN NAV
$
0.94
SHARE PRICE
$
0.89
DISCOUNT
1
4.4
%
as at 30 November 2018
A word from the Manager
Market Environment and Portfolio
Performance - November
While market volatility remained elevated in November,
markets stemmed October’s steep declines and ended
the month broadly flat. In the US, the S&P 500 Index
gained 1.4%, while European stocks (Stoxx 600 Index) and
emerging markets (MSCI EM Index) fell 1.8% and 0.2%
respectively. The strong New Zealand dollar (+5% against
the USD) weighed on portfolio returns during the month.
Portfolio gross performance was -0.6% in November,
marginally ahead of our global benchmark which fell
by 1.2%.
2018 Market Review
2018 has been a significantly more volatile year in markets
than 2017. While the US market has posted gains (partly
driven by President Trump’s tax cuts), share markets in most
other geographies are down year-to-date. While the year
started strongly and saw the S&P 500 gain 7% in January
alone, significant market declines in both February and
October have pared gains for the S&P 500 to 3% for the
year. European markets are down 8%, emerging markets
have fallen 14%, and the Japanese and UK markets are
down 7% and 9% respectively.
The drivers of this elevated volatility include rising inflation
and interest rates, the escalating US-China trade war, and a
slowdown in economic growth in parts of the world. These
factors have caused investors to question if economic
growth and corporate profit growth may have peaked
for the cycle. Despite heightened economic uncertainty,
corporate earnings growth has been solid – particularly in
the US market.
While growth sensitive sectors like Technology and
Consumer Discretionary performed strongly in the first
nine months of the year, recent market declines have
driven outperformance by defensive sectors like Utilities,
Healthcare and Consumer Staples. Year-to-date the Utilities
and Healthcare sectors have now outperformed the
broader US market.
For the calendar year to date, Marlin has delivered gross
performance of 7.0%, compared with our global benchmark
which is down 1.6% for the same 11 month period.
Portfolio Company Developments -
November
Our two Chinese technology companies, Tencent Holdings
and Alibaba, reported results during the month and were
the two top contributors to portfolio performance.
Alibaba’s results showed continued growth in the number
of users on its core Taobao and TMall ecommerce
platforms. Core commerce revenues grew 55% compared
to last year and earnings on its marketplaces increased
27%. While Alibaba’s continued investments in its cloud
computing business (the largest in China), video streaming,
logistics and off-line retail are likely to see earnings growth
slow over the next few years, we still see a long runway for
growth from these nascent markets.
Tencent, the Chinese video game and social media giant,
reported third quarter revenues that grew 24% on the
prior year. While Tencent’s business has been impacted
by a temporary halt on new video game approvals, its
mobile gaming revenues held up well as existing game
titles continued to monetise well. More importantly,
strong growth in Tencent’s newer business lines including
advertising and digital payments contributed to solid
operating results, and now account for the majority of
Tencent’s revenues.
Adidas grew revenues 8% and earnings 19% in the third-
quarter. Strong revenue growth and share gains in the
US and Chinese markets helped offset weaker growth
in its European home market. Improved merchandise
pricing, a higher proportion of online sales, and strong
cost control by CEO Kasper Rorsted saw continued margin
improvement. We believe the company’s solid execution
puts it on track to meet its long term financial aspirations
– which are to grow earnings at over 20% per annum from
2015 to 2020.
1
Share Price Discount to NAV (including warrant price on a pro-rated basis)
WARRANT PRICE
$
0.05

2
Ashley Gardyne
Senior Portfolio Manager
Fisher Funds Management Limited
TJX Companies, the US-based off-price retailer, reported
a solid set of results during the month. Revenue growth of
12% was ahead of market expectations, driven by a better
than expected 7% increase in same-store sales growth and
highlights strength in US consumer spending. That said, a
tick down in TJX’s profit margins highlight that increasing
freight costs and wages are also impacting profitability
in the retail sector. These cost pressures caused TJX
management to provide slightly cautious guidance for
earnings growth next year.
Sector Split
as at 30 November 2018
Key Details
as at 30 November 2018
FUND TYPE
Listed Investment Company
INVESTS IN
Growing international companies
LISTING DATE
1 November 2007
FINANCIAL YEAR END
30 June
TYPICAL PORTFOLIO SIZE
25-35 stocks
INVESTMENT CRITERIA
Long-term growth
PERFORMANCE
OBJECTIVE
Long-term growth of capital and
dividends
TAX STATUS
Portfolio Investment Entity (PIE)
MANAGER
Fisher Funds Management
Limited
MANAGEMENT
FEE RATE
1.25% of gross asset value
(reduced by 0.10% for every 1% of
underperformance relative to the
change in the NZ 90 Day Bank Bill
Index with a floor of 0.75%)
PERFORMANCE
FEE HURDLE
Changes in the NZ 90 Day Bank
Bill Index + 5%
PERFORMANCE FEE
15% of returns in excess of
benchmark and high water mark
HIGH WATER MARK
$1.00
SHARES ON ISSUE
120m
MARKET CAPITALISATION
$107m
GEARING
None (maximum permitted 20%
of gross asset value)
22
%
INFORMATION
TECHNOLOGY
10
%
INDUSTRIALS
16
%
COMMUNICATION
SERVICES
19
%

HEALTHCARE
Geographical Split
as at 30 November 2018
13
%
WEST EUROPE
73
%
NORTH AMERICA
9
%
FINANCIALS
9
%

ASIA
The Marlin portfolio also holds cash.
2
%

ENERGY
The Marlin portfolio also holds cash.
18
%
CONSUMER
DISCRETIONARY

November’s Biggest Movers in local currency terms
Typically the Marlin portfolio will be invested 90% or more in equities.
TENCENT HOLDINGS
+17
%
ALIBABA GROUP
+13
%
SIGNATURE BANK
+12
%
EDWARDS
LIFESCIENCES
+10
%
5 Largest Portfolio Positions as at 30 November 2018
ALPHABET
7
%
ALIBABA
6
%
PAYPAL
6
%
MASTERCARD
5
%
SIGNATURE BANK
4
%
The remaining portfolio is made up of another 21 stocks and cash.
Nov
2007
Nov
2008
Nov
2009
Nov
2010
Nov
2011
Nov
2012
Nov
2014
Nov
2013
Share Price/Total Shareholder Return
Share PriceTotal Shareholder Return
Nov
2015
$
1.00
$
0.50
$
0.00
$
1.50
Nov
2016
Nov
2017
$
2.50
$
2.00
Nov
2018
Total Shareholder Return to 30 November 2018
Performance to 30 November 2018
1 Month3 Months1 Year3 Years
(annualised)
Since Inception
(annualised)
Company Performance
Total Shareholder Return(4.0%)(5.9%)+16.3%+10.0%+6.5%
Adjusted NAV Return(1.4%)(10.2%)+3.5%+7.2%+6.2%
Portfolio Performance
Gross Performance Return (0.6%)(9.3%)+6.2%+11.1%+9.8%
Benchmark Index^(1.2%)(9.3%)(1.8%)+8.1%+7.1%
3
^Benchmark index: World Small Cap Gross Index until 30 September 2015 & S&P Large Mid Cap/S&P Small Cap Index (50% hedged to NZD) from 1 October 2015
Non-GAAP Financial Information
Marlin uses non-GAAP measures, including adjusted net asset value, adjusted NAV return, gross performance return and total shareholder return. The rationale for using such non-GAAP measures is as follows:
»adjusted net asset value – the underlying value of the investment portfolio adjusted for capital allocation decisions after fees and tax,
»adjusted NAV return – the net return to an investor after fees and tax,
»gross performance return – the Manager’s portfolio performance in terms of stock selection and currency hedging before fees and tax, and
»total shareholder return – the return to an investor who reinvests their dividends, and if in the money, exercises their warrants at warrant maturity date for additional shares.
All references to adjusted net asset value, adjusted NAV return, gross performance return and total shareholder return in this monthly update are to such non-GAAP measures. The calculations applied to non-GAAP
measures are described in the Marlin Non-GAAP Financial Information Policy. A copy of the policy is available at http://marlin.co.nz/about-marlin/marlin-policies/
TJX COMPANIES INC
-11
%

Disclaimer: The information in this update has been prepared as at the date noted on the front page. The information has been prepared as a general summary of the matters covered only, and it is by
necessity brief. The information and opinions are based upon sources which are believed to be reliable, but Marlin Global Limited and its officers and directors make no representation as to its accuracy
or completeness. The update is not intended to constitute professional or investment advice and should not be relied upon in making any investment decisions. Professional financial advice from an
authorised financial adviser should be taken before making an investment. To the extent that the update contains data relating to the historical performance of Marlin Global Limited or its portfolio
companies, please note that fund performance can and will vary and that future results may have no correlation with results historically achieved.
Marlin Global Limited
Private Bag 93502, Takapuna, Auckland 0740
Phone: +64 9 484 0365 | Fax: +64 9 489 7139
Email: enquire@marlin.co.nz | www.marlin.co.nz
4
Computershare Investor Services Limited
Private Bag 92119, Auckland 1142
Phone: +64 9 488 8777 | Fax: +64 9 488 8787
Email: enquiry@computershare.co.nz | www.computershare.com/nz
About
Marlin Global
Marlin is an investment company
listed on the New Zealand Stock
Exchange. The company gives
shareholders an opportunity to
invest in a diversified portfolio of
between 25 and 35 quality growing
international companies (excluding
New Zealand and Australia)
through a single, professionally
managed investment. The aim
of Marlin is to offer investors
competitive returns through capital
growth and dividends.
Capital Management Strategies
Regular Dividends
»Quarterly distribution policy introduced in
August 2010
»Under this policy, 2% of average NAV is targeted
to be paid to shareholders quarterly
»Dividends paid by Marlin may include dividends
received, interest income, investment gains
and/or return of capital
»Shareholders who prefer to have increased
capital rather than a regular income stream have
the opportunity to participate in the company’s
dividend reinvestment plan (DRP)
»Shares issued to DRP participants are at a 3%
discount to market price
»Marlin became a portfolio investment entity on
1 October 2007. As a result, dividends paid to
New Zealand tax resident shareholders have not
been subject to further tax
Share Buyback Programme
»Marlin has a buyback programme in place allowing
it (if it elects to do so) to acquire up to 5.9m of its
shares on market in the year to 31 October 2019
»Shares bought back by the company are held as
treasury stock
» Shares held as treasury stock are available to be
re-issued for the dividend reinvestment plan
Warrants
»On 16 April 2018, a new issue of warrants (MLNWC)
was announced
»The warrants were issued at no cost to eligible
shareholders and in the ratio of one warrant for
every four Marlin shares held
»Exercise Price = $0.83 per warrant, to be adjusted
down for dividends declared during the period up
to the Exercise Date
»Exercise Date = 12 April 2019
»The final Exercise Price will be announced and an
Exercise Form will be posted to warrant holders in
March 2019

Management
Marlin’s portfolio is managed
by Fisher Funds Management
Limited. Ashley Gardyne (Senior
Portfolio Manager), Chris
Waters and Harry Smith (Senior
Investment Analysts) have prime
responsibility for managing
the Marlin portfolio. Together
they have significant combined
experience and are very capable
of researching and investing in
the quality global companies that
Marlin targets. Fisher Funds is
based in Takapuna, Auckland.

Board
The Manager has authority
delegated to it from the
Board to invest according to
the Management Agreement
and other written policies.
The Board of Marlin
comprises independent
directors Alistair Ryan (Chair),
Carol Campbell and Andy
Coupe; and non-independent
director Carmel Fisher.