Author: stlplace

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Stocks

Buffett visits China

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He came to say a big “thank you” to PetroChina, because he made lots of money from its stock. Also he came to Dalian, to celebrate the opening of his first company in China (a metalworking tool plant). The plant is a part of IMG group, a subsidiary of Berkshire Hathway. I would think IMG has lots of business in China these days, as China manufacturing industry is quite hot lately.

Buffett in China pic

Interestingly China stock market took his warning (regarding Chinese market), and hold a sell off today. So, in Buffett we trust 🙂

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China Stocks

Speculating on Longtop Financial

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Last night (Oct 24 10 PM, Shanghai time) I bought some Longtop (NYSE:LFT) shares at its IPO debut. I think this is more like “gold rush”, not something a rational investor would usually do. After I bought it at opening ($27), the stock gapped down as low as $23.25 (see the pattern here?). But it reversed its trend in late afternoon and closed at $32.40, which is up 85% from the offering price of $17.50. Its Q2 2007 earning is $0.12, and year 2006 earning is $0.22.

Keep in mind for a growth company like LFT, PE ratio is not as good indicator as revenue growth. Here is what I saw from its prospectus (recent developments):

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China IPO

Longtop Financial Tech IPO

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I didn’t pay much attention to Chinese IPOs listed in US lately. This spring (March) I got into XFML, which is a big mess. Recently I traded WX (Wuxi Pharma Tech), which I think is the best Chinese IPO this year so far. But I am not a biotech/pharma guy, and I felt WX valuation was not cheap shortly after IPO, so I decided to sell it.

Today I happened to read that Longtop Financial Tech (LFT, 东南融通), an IT and software provider for financial services in Xiameng, China, will be listed in NYSE this week. You can read its prospectus here and listen to its roadshow at IPOHome. I have not got into the financial details, but from my preliminary analysis, this is a solid company in a fast growth industry (financial services in China).

From IPOHome, it will be priced between $14 to 16, and will debut this week. Note Goldman Sachs (Asia) will be the underwriter.

IMG_5086
(Customers line up for ATM machines, China Merchants Bank, Shanghai, 2007)

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Stocks

Citic Securities tied up with Bear Stern

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Yesterday (Monday Oct 22 Beijing time) I was wondering why the Citic Securities 600030 stock did not trade in Shanghai: the official reason is CS expected to announce some news. I thought about the Bear Stern (NYSE: BSC) thing, and my guess was right. Here is the news this morning (Oct 23), in Chinese and in English (Bloomberg).

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Life

Sweet osmanthus in the air

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I don’t know if you notice this is 桂花 sweet osmanthus season again. On my way to work, I can smell it. Such as this one (on Changning Rd. near China Merchants Bank). I liked 桂花 because in my primary school, we used to have one or two trees, and we can smell it during the fall season. Of course the dried 桂花 is an important ingredient to make “Jiu Niang Yuan Zi” too.

IMG_5496

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China Stocks

A daunting task for QDII & China Invest Co.

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No. I’m not kidding. Big money (billions of dollars) usually is a good thing, but not easy if one wants to beat market return in a certain time. You can ask Charlie Munger (Berkshire’s vice chairman) and he will tell you Berkshire is going to make a (market+2%) annual return from now on, according to the Q&A of his latest annual conference. For reference, Berkshire (BRK.A) has beat S&P 500 by 10% compound-anually for last 40 years.

Now Mr. Lou Jiwei, head of China Invest Co., will manage a $200 b fund. He can buy half of Exxon Mobile or GE using that money. Or, if Warren agrees, Lou can buy the whole Berkshire.

QDIIs, China AMC, China South, and Havest will each have $3 to $4 billions. Today I heard Shanghai Intl Fund Management Co. 上投摩根 attracted CNY 100 b ($13.5 b) subscription for its QDII focus on Asia pacific. They are both having the problem of “starting big”. A problem nice to have, nonetheless it IS a problem. One thing for sure is QDII can not expect to get the return of their sister funds investing in domestic A share, many of which already got +100% year to date (YTD).

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Stocks

Shanghai Composite Index reached 6000

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Today is Oct 15, 2007. Shanghai Composites Index continued to defy the gravity, amid the central bank (People’s Bank of China) raised bank reserve rate by 0.5 again in the weekend. The composite index closed above 6000 (Sina) for the first time.

Interestingly, history shows the CPC congress is bad for the stock market. Here is one article goes into the details of stock market performance during past CPC conferences. Today marks the opening of 17th CPC congress.

I’m not going to predict the market, either from historical perspective or futuristic view. As a famous investor once said, if history can be used to predict the (future) stock market, all the librarians (assume they read history books in the library) will be rich 🙂

librarian pic

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Stocks

China banks are still busy

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The following is picture I took at China Construction Bank in Shanghai (April 15, 2007)

IMG_4877

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Stocks

SAP buys Business Objects

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Week in review 10/07 to 10/13

China Mingsheng Bank buys a stake in a US bank.

China pork price is under control for now, how about housing? And stocks?

Oracle placed a hostile $6.7 billion bid for BEA Systems, according to Bloomberg. Enterprise software arena will have one fewer importnant player.

SAP buys Business Objects (From Reuters), SAP, the world largest business software maker, agrees to buy Business Objects, the leading (French) business intelligence softare maker. If you have not heard of Business Objects, a few years ago it acquired Crystal Reports, the well known reporting software. This leaves Canada’s Cognos the only major BI software maker.

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Stocks

New fairy tale

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(Update Oct 14) I saw this “UBS analyst conference call” from trader168, it talked about “UBS analyst followed the momentum, not the fundamental analysis”. Some food for thought amid all the craziness in the China A share market, and its ripple effect on Hongkong and US markets.

(Original) The performance of recent Haigui stocks are spectacular, here are today’s closing prices of 3 big boys recently came back from Hongkong.

China Shenhua Coal, 中國神華: 1088.HK (54.00 HKD), 601088.SS (92.12 Yuan)

COSL, China Oilfield Service Ltd, 中海油服: 2883.HK (19.72 HKD), 601808.SS (51.65 Yuan)

China Construction Bank: 0939.HK (7.27 HKD), 601039.SS (10.06 Yuan)

For reference, one HKD is slightly less than one Yuan (CNY). Interestingly, Shenhua in Chinese also means fairy tale 🙂