Month: March 2008

Categories
Saint Louis

Cardinals opening day

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Last Updated on April 1, 2008 by stlplace

Let’s take a break from the bad economy and stock market news, from China to US. Today is MLB opening day, St. Louis Cardinals will face Colorado Rockies at Busch Stadium.

After living in St. Louis for more than 7 years (and in the show me state for more than 10), I started to appreciate the joy, the saddness,…Cardinals brings to the town. I believe St. Louis would not be as good without Cardinals: talking about the sports and the spirit of a city.

Cardinals St. Louis

Go Cards, Pujos, Carpenter, Wainwright and La Russa…and best wishes to Edmonds, Rolen and Eckstein in the new home!

Categories
Shanghai Composite

Show me the money: Chinese A share

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Last Updated on April 3, 2008 by stlplace

There are lots of talk about Chinese A shares market these days, both because of the big drop lately, and because of the in-action of the goverment. You can read the two Chinese articles (one supports inaction, another cries for goverment action), if you know Chinese. I don’t want to get into the debate of “moral hazard”, which is also a heated topic in the US right now. I am trying to explain why the Chinese A shares are still expensive, from value investing point of view.

Let me use two blue chip stocks as example, the 600030 (Citic Securities) and 600036 (China Merchants Bank). Both released 2007 results and declared the dividend. I rounded some of the numbers for simplicity (without distorting the results).

600030: dividend payout ratio (dividend/earning per share) 0.50/4.00 = 12.5%, the company pays 12.5% of the earnings to the shareholders, leave the rest for re-investing.

dividend policy pic
(source: www.iamgold.com)

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Categories
401k and Personal Finance Life Tips

Gas saving tips

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Last Updated on March 28, 2008 by stlplace

Finally St. Louis gas price is exceeding $3 a gallon. Today marks the first day my gas bill exceeded $40 ($3.179 * 13.105 gallons = $41.66).

I am not complaining, as I know people around the world are paying a much higher price for gas, or paying a higher percentage of their disposal income for gas. But I still want to do something to contain the gas cost, before sending my pay check directly to the Exxon-Mobile and the likes.

1) In the past, I tried to fill up gas at the proper time: there are two gas stations near my home, whenever I saw one gas station raised the price (the other has not), I will rush to the other one (usually it’s the Shell).

2) Also, I used the gas rebate credit cards, they are Citi Dividend (5% rebate in the past, this has been changed lately); Chase Freedom (3% rebate); and AAA MBNA card (5% rebate subject to the up limit of 2% of the monthly balance).

3) Last week, I tried another approach. I paid pretty dollars for car maitenance: engine tune up (replace spark plug and wires); fuel injection cleaning; replace engine gasket. Hopefully my investment will pay off over time (from saving in gas).

Categories
China

Hangzhou Bay bridge to open

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Last Updated on March 28, 2008 by stlplace

It’s official, the Hangzhou Bay bridge, which connects Ningbo (my hometown) and Shanghai (to be more precise, connects Ci Xi to Jiang Xing 南起浙江宁波慈溪市，北至浙江嘉兴海盐县), will open on this May, according to Ningbo goverment offical. Chinese news from Xinhuanet here.

Hangzhou bay bridge Ningbo Shanghai
(source: sohu)

At this time this is the longest sea crossing bridge in the world (36 km, or 22.5 miles). A new Hangzhou Bay railway bridge is also under planning (Chinese).

Dream come true

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Categories
Shanghai Composite

Turning point or new beginning: why the drop?

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Last Updated on March 28, 2008 by stlplace

The Shanghai composites index hit a new YTD low last night (US time), with the help from PetroChina (PTR, 601857.SS) nearly 9% loss. Note PTR has 20% weight on the Shanghai index. Fundamentally, the Chinese public companies will have tough comparison this year. Last year with the effect of new accounting method (does this sounds familar, hint, Enron) last year, and a bull market, the companies were able to book record profit (unrealized investment gains). This year, with the recent stock market drop, if companies have not ring the register on the stocks, the unrealized investment gain will be unrealzied loss.

Back to Zhu Ping’s 拐点还是新起点. Why the drop?

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Categories
gadgets

Why China Mobile CHL is a buy: III

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Last Updated on April 2, 2008 by stlplace

There were some big news in the US wireless arena last week. Verizon and AT&T won the auction of some new wireless spectrum, Google did not win the spectrum (see the details at NYTimes). Do you know how much Verizon paid for the new spectrum? $9.6 billion. Imagine a similar scenario in China, how much does the 3G license cost in China? As far as China Mobile (and China Unicom and Telecom) is concerned, it’s null, zero, no cost.

What? You must think this is crazy. How come the goverment gives away the license for free? Well, the No. 1 reason is the goverment is the biggest shareholder of all those big wireless/telecom companies. If they charge a big fee, essentially they are putting money from left pocket to right pocket. So why bother.

Moat analysis
What does CHL got?

Wang Jian Zhou pic
(CEO Wang Jian Zhou at annual report, from iphonebuzz.com)

1) A top 10 Chinese global brand, which consists of 3 sub brands: GoTone/quan qiu tong (white collars), shen zhou xing (everyone) and dong gan di dai (mobile internet), quote in Chinese:

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Categories
Shanghai Composite

Turning point or new beginning: valuation

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Last Updated on March 27, 2008 by stlplace

Zhu Ping (朱平) is the chief investment officer (投资总监) of Guang Fa fund(广发基金), I have a lot of respect for him not because he went to the same graduate school I went (Shanghai Univ. of Finance and Economics); but rather he is an independent thinker, has a good track record managing the funds, has a good sense of value investing. For me the most important of all, I can learn things from him 🙂

The China stock market expericed a major correction lately, after huge run in last two years. There are many dis-heartening stuffs, such as the selling from major institutions, and the proposed huge secondary offerings from Ping’an insurance, and Pu Fa (Pudong dev bank). Recently Zhu Ping wrote about his view on the China market, economy and investing, the title is “拐点还是新起点“(turning point or new beginning). I read it and decided to translate portions into English (in series). He talked about the things in general in bullet one. I will start from bullet 2, “valuation”.

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Categories
China

Top 10 Chinese global brands

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Last Updated on March 23, 2008 by stlplace

Financial Times did a Top 10 Chinese global brands survey recently. And here are the winners. Did you notice anything interesting?

I noticed BoC, Air China, China Mobile, China Telecom, Sinopec, CCB are state owned (majority owned); while Lenovo, Tsingtao beer, Haier and Baidu are public companies. I am a little puzzeled why ICBC and PetroChina did not make it to the list; and I was NOT surprised Baidu tops Sina, Sohu and Netease.

By the way, many of the top 10 brands are Beijing Olympics sponsor, such as BoC, Air China, China Mobile and Lenovo. If you watch NBA on TV, you will see Lenovo and Haier ad. from time to time.

top 10 Chinese global brands
(Full size pic is here).

Categories
gadgets

Why China Mobile CHL is a buy: II

Reading Time: 3 minutes

Last Updated on March 21, 2008 by stlplace

As you may aware, terrible things happened in Lasha (China) a few days ago. It is reported 5 young girls who worked for an apparel shop were killed in the riot (in this particular case, arson set by the thugs). I noticed the last text message one of the girl sent to her father is: Don’t worry about me, dad. 最后一条短信：”不要担心我”. I certainly wish things would turn out differently for the girls. But on the bright side, I think her family at least got some pieces of their girl’s last moment. This reminds me of a related event. On September 11, 2001, some people who buried under world trader center tried to call their family members, or text messaging, and some got saved that way. I’m sure you have heard similar stories about cell phone saving people’s lives too.

So what’s my point? We are increasingly living in a mobile world nowadays. From business point of view, the enablers of this technology can make a fair share of profit, while providing reliable service to the consumers (hopefully mostly for entertainment, not life or death situation).

China Mobile pic

Year 2007 result
China Mobile (CHL) released its year 2007 results on March 19 (PDF file here). Here are the highlights:

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Categories
China IPO

Alibaba update

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Last Updated on March 20, 2008 by stlplace

It was a short while ago (last Nov) Alibaba did its high profile IPO in Hongkong. Now it’s back in the news again. Don’t get me wrong, Jack Ma (Ma Yun), the founder and Chairman of Ali, was always in the news. I remember a few years ago (when the company was private) he said Ali pays 1 millions Yuan everyday, that’s not a small number and people thought Mr. Ma was bragging. Oh, well, bragging or not. Alibaba’s IPO was very successful, and it created a few hundred millionares (stock option holders) in its employee bases, from what I read last Oct.

Fast forward to March 2008. It reported a good quarter but stock continued to drop (see Sramana Mitra at Seekingalpha). And there is a rumor about class action lawsuit coming (news in Chinese).

Alibaba 1688 stock chart
(Alibaba 1688.HK 6 month stock chart, full size pic here).

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