Author: stlplace

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Stocks

Waiting for Longtop Financial earning

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longtop finance logo

(Update 2) Just listened to its CC, CEO Mr. Lian said fiscal 2009 (Apr 1 2008 to March 31 2009) revenue forecast is 80 m. Note they said fiscal 2008 revenue would be 58 m. I felt they are being conservative on the numbers here. The CEO was very bullish on the IT spending of Chinese banks, insurance companies and financial subsidiary of large companies. FENet will contribute 10 m revenue in fiscal 2009. Not too bad.

Just a little book keeping: CFO Derek said the fiscal 2008 earning will be 68 cents; outstanding shares will be 53 m by March 31 2008.

(Update) Just as I was writing, it reported its quarter. The number of this quarter looked OK. But the outlook for next quarter and the year were so so (45.7% YoY revenue growth).

I would be very interested to hear what CEO Mr. Lian has to say.

(Original) LFT is going to report momentarily. I still have all the shares bought since its late Oct. IPO (yes, under water now), and here are my impressions from reading its prospectus last night.

1) The revenue growth will be OK. They forecast a low 40s growth YoY.

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Fun Stocks

Chipotle Mexican Grill: 2nd visit

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We went to the Chipotle yesterday. This is my second visit (see my first visit exp here), and my wife’s first. It did not turn out to be a disaster, but it is obvious that my wife did not like Mexican food 🙁

On the other hand, the stock of Chipotle (NYSE: CMG) continued to do well in past 6 months, although they should have same “rising wheat and meat cost” issues as experienced by Panera, or (to a lesser extent), Starbucks. I think the main reason is, the consumers (black, white, Asian and hispanic) crave for the spicy Mexican food. Not the sandwich or latte from Panera or Starbucks.

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Stocks

Old horses in China Online Game

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(Update Nov 20) Grus had a good post on trader818 explaining the online games and its competitive nature. So I can shut up.

(Original) I have traded the three old horsemen among Chinese online game companies 2 years ago(unfortunately, lost money on all three): Shanda (SNDA), NetEase (NTES) and the9 (NCTY). I paid attention to them from time to time, and I think recent developments in those 3 companies are interesting, especially from business point of view.

First, the good news from Shanda. Two years ago SNDA stock is in a downward trend, because its main revenue source: lineage II was getting old. Since then SNDA did a few things: it sold Sina stock and took a big gain; it changed its business model from making money from subscription to making money from selling stuffs used in game; it also acted more like a VC, I mean it bought some popular game in its early stage, then leverage its distribution network to make money.

NetEase, the old game (westward series) are really getting old, the new in-house games are not taking the slack from westward. Other effects such as web search is too little too late. In my mind, Mr. Ding Lei was very lucky in the past, in terms get into the right field in the right time (email service, mobile value added service, and online game). Will he be lucky all the time?

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China Stocks

China to tax stock real estate gains?

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There are conflicting news about this hot topic. The initial news, according to Hexun, the Chinese tax bureau is going to collect tax on the gains made from stocks and real estate for people earn more than 120,000 Yuan per year. Note in China 120,000 Yuan is the threshold for people to file personal income tax.

personal income tax(source: xazr.com)

But according to Xinhua and Netease, the Chinese tax bureau is not ready to collect capital gain tax from stock sales yet.

My take: the personal income tax and especially the filing of personal income tax (for person earn over 120,000) are still fairly new. The Chinese stock market is also fairly new (compared to western markets). It IS good for China to align the tax system, encourage investing (in stocks) while keep the fairness of society (people from different income level). But keep this balance and how to accurately calculating taxes will NOT be easy for the goverment, and brokage firms.

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Fun Stocks

Do not touch the stocks

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I usually have a weekly call with my parents. My mom knows I investing in stocks. On today’s call she suggested I touch less on stocks. I think this sums up the sentiment of Chinese stock market very well. After recent drop of the A share market, people are weary of what the goverment will do (further) to cool down the market.

do not touch sign (source: online-sign.com)

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China Stocks

Starbucks, Panera

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Yesterday morning when I went to Panera (St. Louis) Bread to get morning bagel, I noticed they raised the price from 89 cents to 95 cents. I can fully understand the pressure they are facing: the rising wheat, diary, and energy cost.

Today Starbucks came out with earning, and understandablely a disappointing outlook (bloomberg).

SBUX and PNRA are hit on two sides: the rising costs of raw materials; and shrinking pockets of US consumers.

Long term, I do believe Starbucks will do very well in China, and other emerging markets; but right now, the sales from China is just too small to overcome the difficulty in the US…So I will NOT try to be hero at this time.

Categories
Stocks

Homework

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I resumed my homework on stocks today. By homework I mean the research I did on stocks, basically I copied the financial numbers, such as revenue, earning, company own forecast to a Google spreadsheet, and do some simple calculation such as growth rate, price sales ratio (market cap divide by the revenue). This is very rudimentary but notheless it does give me a feeling whether the stock is expensive or not. On reflecting the mistakes on CROX, I think one reason is I did not keep the speadsheet up to date 🙁

Actually on my spreadsheet for CROX (last updated on July 26), I had a few lines like: “sell some before Q1 earning”, “sell some before Q2 earning”? I did sell some on early May (before Q1 earning), but I did not cash out any before Nov. 1 melt down. I am not saying “had I did the homework, things would be different”. In stock market there are no “had I”, or “would be”. But one thing I can make sure is sit tight, and do the home work.

Now back to the homework for Mindray (NYSE:MR) and Longtop (NYSE:LFT).

Categories
401k and Personal Finance

New 401k plan

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No I haven not changed my employer or anything, but my company was acquired by a global 50 company this year, and from next year we will have new 401k plan. Currently my 401k is in Vanguard and I am happy with them so far. One advantage with Vanguard is they have the lowest fees in the industry. If all other things are equal (in the long run, I do believe the performance of most large cap stock funds tend to converge), lower fee means better performance for investors.

nest egg pic

(Picture from Money Magazine)

That being said, I also found some interesting things about my new 401k plan: the new funds categories by the investment regions; and the company stock.

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China Stocks

Currency wars

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Early August 2007, when I was in Shanghai, the US stock market underwent a crisis from the sub-prime mortgage. At that time the focus was on BearStern and its two hedge funds. In China, and in overseas Chinese financial community, the book named Currency Wars authored by Mr. Song Hongbing was very popular. So I bought one in Shanghai. The heart of this book is (in my own words): we are inceasingly live in a world that controlled by international bankers. In a way, ordinary people (like you and me) are very much like their (bankers) slaves.

Currency wars logo (picture from Amazon China)

As I am reading the book about Fed history (Wiki: US Fed reserve), and listening to Ben Berneke (the Fed chairman) speech this morning, I think this is very interesting: is Ben Berneke, an Econ professor from Princeton, look like the representative of the bad guys (a.k.a., the bankers)?

Here are some comments about the book at douban.

Categories
China Stocks

Is the Chinese bull market over?

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(Update Nov. 17) Shuipi of ChinaTimes(水皮华夏时报) wrote this interesting piece on his newspaper.

(Original) It looks like it, from the highs at 6,200 in early Oct to 5,200 now. But wait a minute, recently the US stock market suffered big loss because of the sub-prime meltdown, and weakening of the dollar. How could the mess in the US drag down the Chinese stock market?

Well, one can say we are in a global economy now, the ripple effect of US sub-prime meltdown means the US business and consumer will watch their wallet more carefully, which is bad for Chinese exporters. We all know the Chinese economy depends a lot on exporting to the US.

China Mobile logo

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