Day: May 9, 2007

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Business China

Starbucks Stock and China Plan

Reading Time: 2 minutes

Last Updated on May 13, 2007 by stlplace

I mean the stocks (SBUX), not the latte. I believe the “so-so” same store sales number for the Q1 is the main reason for the recent drop. The stock is still not cheap by looking at PE (37), with projected rev/earning growth at about 20%. But this is Starbucks, normally they don’t go on sale. Near term, I believe SBUX is very much relying on the developed countries (a.k.a, US) for most of its revenue. For instance, in last 6 months I saw they opening up some new stores (some with drive through) in St. Louis and other midwest cities.

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Categories
China

A Consuming Nation in the Making

Reading Time: < 1 minute

Last Updated on May 9, 2007 by stlplace

I watched an interview on China-CBN last night, the guest is a guy from McKinsey, and he is familar with the consumer trend in China. Some interesting points I took down here:

1) China is the No 4. in the world in terms of GDP; I believe China is No. 1 or 2 receipent of foreign investments. But China is about the size of Italy (No. 8 economy in the world?) in terms of consumer spending.

2) The consuming is speeding up as goverment realized this is good for the economy, as the health care and social insurance system undergoing reform, as the young generation and emering middle class realize “life is more than work and saving”, etc. He mentioned 2015 maybe a turning point.

3) Many foreign companies tend to under-estimate or over-estimate the market potential of China from time to time.

China_Trip_Part_1 057 

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