Home Inns Mindray New Oriental

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These days you need some faith to hold those relatively new Chinese IPOs. I only have Mindray (MR) at this time, but I have traded HMIN and EDU before. All three stocks dropped a lot from it highs in a week. I just want to summerize my observation after spending 2 days in Shanghai, this is in no ways a comprehensive study.

Home Inns: it faces more competition. I went to Jinjiang Inn on Sunday with a friend, we need to book a room for another friend. It’s fairly easy. Maybe this is not a busy season. But I remember one or two years ago it’s not easy to book a room one day in advance. Also Marriot (the American hotel giant) bought a Chinese economy hotel chain “Xingyu Star” and renamed it as “Wan Jia Wan Hao”. It plans to open 300 hotels in a few years.

Mindray: this one is more difficult to measure. The crack down on corruption in hospital and pharmaceutical industry is still on. Long term it’s a good thing for strong players like Mindray, short term it will have some negative effect. The good thing for MR is its international market makes up about 50% of the revenue. So they are not as dependent on Chinese economy or regulatory environment as the other two.  

New Oriental: again the competition. I saw some ads for English training. I believe the english learning market is big but everyone got a nich, for instance, New Oriental specialized test preparation, wallstreet english specialized in business english. In other words, the pie is big, but so many people want to get a slice of it. So…

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