Thriving in China’s Storm: 3-Year Milestone

Dear partners and friends,

Everest was founded on 17th Aug 2021, and it began compiling its track record on 17th Mar 2022. Today marks the 3-year anniversary of our track record. We've managed to preserve capital despite the historic turbulence. On this special occasion, I would like to share some reflections.

Three years ago, when I started Everest, I promised to deliver something unconventional. Frankly, however, I never imagined the environment would be so challenging and the outcome would be unconventional to this degree – we’ve survived long enough to share these three-year reflections. It's akin to someone calmly paddling a kayak amidst the Titanic's sinking while asking: "Need a lift? This one happens to be waterproof."

How did Everest survive one of history's worst market downturns in China? I believe three core philosophies were the key:

1. Trusted Partnership: Alignment of Interests

   
   

   We believe interest alignment forms the foundation of enduring partnerships. We reject Wall Street’s traditional 2%/20% fee model, opting instead for a budget-based management fee, 3-year performance fee (only above an 8% hurdle), and significant personal capital commitment. We uphold our fiduciary duty through proactive communication and transparency, including regular shareholder letters (typically exceeding 30 pages), biannual shareholder meetings, detailed investment memos. At our partnership's core lies mutual trust - a daily commitment that explains why our partners have stood steadfastly with Everest through turbulence.

2. Long-Term Perspective: Owners' Mindset and Contrarian Approach

   
   

   We invest as permanent owners, not temporary renters. We believe outsized returns come from deploying capital when others retreat and capitalizing on market dislocations. As China’s equity market experiences its most prolonged downturn in history (MSCI China All Shares here, select “Full History” in term). While others flee - creating inefficiencies and opportunities - we see China’s $10Tn+ equity market, stripped of hype, offering world-class companies with asymmetric risk/reward potential. Our owners' mindset and contrarian approach help us look beyond market cycles - where others see short-term volatilities, we see long-term opportunities.

   
   

3. Fundamental-Driven: Only The Best Opportunties

   
   

   Covering 100 stocks indicates weak conviction. Instead, we focus on 5-10 deeply researched companies. We believe that only a handful of businesses in the world warrant 1,000+ hours of research, and we study them with extraordinary depth. Our target companies must demonstrate: World-class founders with durable moat; Strong cash generation history; High returns on equity (ROE); And solid balance sheets. We believe these high-quality businesses, acquired at attractive prices, can grow and compound in value over the long term, and we can sleep well at night.

   
   

While today's milestone represents an important step, it's far from victory. We are constantly striving for perfection, aiming to become the best and most trusted investors. To our partners, families and friends - thank you for your unwavering support. We look forward to continuing this journey together.

Best,

Min

P.S. Peers call me “the last optimist in China.” I prefer “stubborn gardener”—because deep roots weather any storm.