Month: February 2007

Categories
China Stocks

The Trend of World Assets

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Last Updated on February 11, 2007 by stlplace

This is an interesting statistics of the world assets by geography, courtesy of My Money Blog. I remember from Jeremy Siegal’s recent book “The Future for Investors”, one trend is the emerging middle class in developing countries (Brazil, China, India etc.) are going to buy assets from the “baby boomers” in the developed economies. In other words, maybe 20 years from now, 5% of Microsoft will be owned by Chinese and Indians. This also reminded me one more number, the saving rate in China is 50%, and the US saving rate last year is -2%. Note the interest rate in China is quite low, and investment options are not plenty. The Chinese domestic stock market is taking off lately, but I think many people will buy foreign equities if the Yuan (RMB) become a hard currency.

This is even more interesting considering many foreign funds are buying Chinese stocks lately.

Categories
Business Stocks

Dancing with Wall Street

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Last Updated on February 10, 2007 by stlplace

There are many benifits for a company to go public, otherwise why so many Chinese companies came to the Wall Street in recent years. But on the other hand, if a company came to public just for the sake of “listed in NYSE or Nasdaq”, there may be something wrong here. There are many rising stars and fallen heros among Chinese Internet companies in past few years, after Sina, Sohu and Netease came in the dot com era. Some of the notable ones include JOBS, SNDA, and BIDU. In all these cases the CEO of the company seemed worked too hard for Wall Street, and then made big mis-step.

I think for the long term, companies will be better served if CEOs can step back from the impatient Wall Street for a while. Just like in the dance, they should be the leaders, rather than let the Wall Street lead them. That is of course assume they know what they are doing.  

Categories
IPO

Hedge Fund Fortress IPO

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Last Updated on December 12, 2007 by stlplace

This is probablly the hottest IPO this year (so far). It went up 89% on its debut. But I did not jump into it because: 1) I don’t have much cash; 2) Hedge fund is the business I don’t know too much about.

I am not against shorting stocks, trading options and other exotic stuff; but these are the areas I don’t feel comfortable (math, lots of math) and don’t plan to learn it at this time. I am just an old fashioned guy, and my role model is the guy in Omaha. One of his rule is “buy the business you can understand; and the business that generates lots of cash and does not change too much over the years, e.g., Coca Cola and Gillette”.

Interestly, Mr. Duan Yongping, the legendary figure in China electronics industry, is also learning Buffett’s philosophy these days.  

Categories
China Stocks

New Oriental EDU Seconday Offering

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Last Updated on February 9, 2007 by stlplace

The following is from Reuters. I have not seen the final prospectus from SEC web site yet. 

“HONG KONG, Feb 9 (Reuters) – Investors and New Oriental Education & Technology Group Inc. (EDU.N: Quote, Profile , Research), China’s largest education group, and its investors have raised US$334 million after pricing 8.05 million American Depositary Shares at a 1.78 percent discount to its last closing price.

Investors including Tiger Global and the founder of New Oriental sold the shares at US$41.5 apiece.

The shares sold comprised 92 percent of existing shares and 8 percent of new shares, the source said.”

(Update 09Feb07) The prospectus is here. If you look carefully at the “selling shareholders” section, you will find “Tigerstep Developments Limited, a company incorporated in British Virgin Islands, is wholly owned by Bamei Li, mother of Michael Minhong Yu”. Yu’s mom is probablly the richest grandma in China 🙂 

Categories
Fun

Coffee at McDonald and Starbucks

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Last Updated on February 8, 2007 by stlplace

Call it gourmet coffee, premium coffee, or designer coffee, whichever way you want to call it. But I have seen the “Gourmet Coffee” bulletin board put up by McDonald to make fun of Starbucks’ price. I also noticed Starbucks is adding “drive through” windows and open new locations like crazy lately. All these, according to Todd Sullivan’s value play blog, is kind of related…

Separately, a short time ago I heard KFC and McDonald are creating “drive through” stores in China. So are we in “car and caffeine driven society” now?

Categories
China Stocks

Second Look at Huiyuan Juice IPO

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Last Updated on February 7, 2007 by stlplace

I noticed this juice thing is getting popular in China, just like the coffee did in recent years. In summer 2004, when I attended a bunch of formal dinners in Ningbo, juice is an option, as is the wine. Juice is also offered in the airplane. One thing I noticed that the orange juice in China is mostly “from concentrated”, probablly due to cost and taste reasons. So the demand and the growth is there. The problem with the company, from I read from FinanceAsia:

“Among the potential concerns, observers say, is the cost of buying juice concentrates and fruit puree, which increased by more than 50% in the first nine months last year. The company buys about 56% of this raw material from abroad, making it vulnerable to swings in international prices, particularly for oranges.”

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Categories
Business China

Chinese Solar Stocks are Hot

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Last Updated on February 7, 2007 by stlplace

First is the SunTech Power (STP), it came to NYSE a little more than a year ago. The stock almost doubled from its debut. The company is founded by Australian Haigui and based on Wuxi, Jiangsu province. This is the largest Chinese solar panel marker and it’s profitable.

Then comes the Canadian Solar (CSIQ). Don’t know why it’s called Canadian. Maybe founded by Canadian Haigui? Anyway the company is based in Suzhou, Jiangsu province.

Just before Xmas 2006 two new players joined the party. Solarfun (SOLF) is based in Qidong, Jiangsu province. The rumor is the founder came from SunTech Power. Trina Solar (TSL), is based in Changzhou, Jiangsu. TSL is hot in last few days (don’t know why, not my specialty).

Last but not least, here comes the JA Solar (JASO). From its prospectus it’s from Hebei. The CEO worked for SunTech Power before founding the company.

Categories
Stocks

Cashback Credit Card is Sweet

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Last Updated on February 7, 2007 by stlplace

But not all of them are equal. I am using the Citibank Dividend and the Discover Cashback card. The Citi card used to give 5% (now 2%) cash back for gas, grocery and 1% for everything else, with an annual limit of $300.

The Discover card is more complicated. It has a “ladder” rate and does 5% promotion every three months. Each year (start from the day card being activated), it gives 0.25% for first $1000, 0.5% for the second $2000, 1% for anything afterwards. Every three months or so, e.g., Jan 1 to March 31, it gives 5% cashback for airlines, trains and buses; and the 5% category could change to restaurant from April to June. Also Discover has more redeem options, in addition to cash, it can be converted to gift cards from various vendors.   

Categories
Business Stocks

Ford Taurus is Back

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Last Updated on February 7, 2007 by stlplace

It’s interesting to hear they decided to bring back the old name, the family sedan saved Ford during its difficult times in 1990s. Ford is in trouble again lately, due to its unattractive products and sky high labor cost. Will this name change save the company? Maybe not. But I think it will help them in some ways.

A little backgound: Ford introduced Ford 500, its new family sedan a while ago, to replace the decade old Taurus. Taurus was a big hit in its early years (1990s), but was increasingly under pressure from CamCord (Toyota Camry and Honda Accord) as it ages. Its brand was more diluted when the rental fleet (Hertz) have all those Taurus.  

Now the key question is: are there any Taurus fans (hint: moms) left?

ford taurus pic

Categories
Business China

Sohu Coming of Age

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Last Updated on February 6, 2007 by stlplace

When I first came to the US in 1997, there is no Chinese web portals. We read Chinese news primarily through BBS. The Chinese language support for the browser was not widely available either. I remember a friend told me something about installing the “Chinese version of DOS” on the PC so that he can read the Chinese. Then comes the RichWin (the Sina), the Sohu and Netease. And the Internet Explorer incorporated the Chinese language support so we don’t need to install NJStar for the PC.

Continue reading “Sohu Coming of Age”