Author: stlplace

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China Stocks

Same stock different prices

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I was thinking about buying some ICBC or BoC shares in Shanghai, but the price difference of the Shanghai and Hongkong (or ADRs in NYSE) kept me from pulling the trigger. Since one Yuan is roughly worth one HKD, why would I pay premium for the A shares if I can get H Shares (or the equivalent US ADRs) for a discount?

Unless the Yuan depreciates (relative to HKD and USD) significantly (it’s possible but unlikely), buying A shares does not make sense to me.

ICBC: 601398 (Shanghai) CNY 6.80; 1398 (Hongkong) HKD 4.80

Bank of China: 601988 (Shanghai) CNY 5.80; 3988 (Hongkong) HKD 3.80

China Life: 601628 (Shanghai) CNY 48.00; 2628 (Hongkong) HKD 30.00; LFC (NYSE) USD 57.41

Note one share of LFC (ADR in NYSE) is worth 15 shares of 2628.HK, the price of 2628.HK is the same as LFC, if we consider this units conversion and HKD/USD conversion.

The main reason for the price difference is the supply and demand: Chinese people have lots of free money (in CNY), but they can only invest inside China. The China capital market has grown significantly, but it still could not meet the demand from flood of domestic investors.

Categories
China

Shanghai snapshot II

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Student studying at KFC, I also see students studying at McDonald. Note in China both KFC and McDonald are fashionable gathering places for middle/high school and college students.

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My first Chinese KFC meal in many years, I got headache after eating that 🙁

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Categories
Life

A new beginning

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Last Friday (August 10) we got married at Shanghai Xuhui District marriage license office.

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The place we received the certificate and pledge (swear?) our oath.

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Categories
China Stocks

Do you want to be a CEO ?

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I got to see Michael on CCTV Channel 2 yesterday. He was participating a show as a guest. The show is about the “entrepreneurs born after 1980s” (Michael was born in 1960s).

I noticed he said something interesting about New Oriental “listed in NYSE”: if I could regret, I wish we haven’t done that. On the surface it seems strange, who does not want to get rich? But I think he meant this: being listed in NYSE is a huge responsibility, if he had known all the pitfalls of “listing in the US” (not just Sabane-Oxly), he would re-consider.

But in reality he couldn’t. Because he is not the sole owner of the company. Both VC (refer to Shao’s blog about VC’s timeline) and his colleagues (many are minority stock holders) wanted to cash out. The company could use the IPO proceeds to expand; note the competition has also heated up too. The “listed in NYSE” will also help them build the brand, globally.

Back to Michael’s reponsibility. As soon as he took money from the Wall Street, he was expected to deliver the financial results to meet the street. He and his team did very well in first two Qs, but they missed the lastest Q. I bet he did not get much good sleep lately, because he needs to make sure next Q will come out OK.

Continue reading “Do you want to be a CEO ?”
Categories
China Stocks

ICBC the biggest bank

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Yesterday, ICBC, Industrial and Commerce Bank of China (6001398.SS), went up 0.57 (just one cent shy of 10%), and closed at 6.37 Yuan. With that price, ICBC exceeded Citibank and became the world largest bank (market cap wise), and closes in Microsoft in terms of market cap (bloomberg).

I remember last time ICBC closed in Citibank was 3 or 4 months ago, but this time it has more sustance (I mean fundamental, or earnings). Chinese banks, along with real estate developers, are on the fire lately and people attribute that to:

1) The rise of the Yuan.

2) The continuing growth of domestic economy, along with rising CPI (inflation) and rising property value. The actual bank interest rate is negative if you consider the inflation (4%).

Continue reading “ICBC the biggest bank”
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Stocks

Sold the Heelys HLYS

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I placed a market order before the market open. The last time I did something similar is two years ago when the Ninetowns reported that their customers (Chinese goverment) would no longer pay them for the software. They would get a free version instead.

But HLYS did worse in terms of the stock. It closed at 21.99 yesterday, and opened 13.38 this morning. I lost more than $7 per share (bought it 20.95 about two weeks ago).

It seems I haven’t learned my lessons in 2 years. Seriously I felt lucky this time because the gain in other stocks covered the loss. Actually I did made some money on HLYS too (a while ago), today I gave it all back 🙁

Both the CEOs of NINE and HLYS are on my “CEO Hall of Shame” list now. We should all be careful when we put our hard earned money to the stock market: look for good CEOs, real good CEOs.

BTW, I saw 5 analysts downgrade the HLYS today. This time I agree with the analysts.

Categories
Fun

Beijing Olympics is one year away

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There are many activies to celebrate this special occassions. Here is the logo at google.cn.

beijing08

Categories
Stocks

Heelys went off track

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Heelys reported a decent second quarter, at the same time it warned its second half will be more challenging. “Challenging” is a polite word, “go off track” is more proper in my mind. So I guess I will take my loss tonight when the market opens.

With Heelys report, all my 6 stocks reported earning. Two winners are CROX and MR; two losers are GSIT and HLYS; SBUX and SNCI did ok. I normally don’t bet on earnings these days; the reason I bet on HLYS was I thought the expectation is already low, and “back to school” seems did well. But…the wheels came off.

So, the lesson for me is, don’t bet on earnings. Especially demaged stocks like HLYS and NINE.

Heelys pic

Categories
Fun

Faked iPod Nano

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I found this knock off iPod Nano at Taobao, Mr. Ma Yun’s company. Note his big baby Alibaba is preparing for the IPO in Hongkong later this year.

It appears to me this “grey market iPod” looks very much like the real one; and it has its own market, because fashion-chasing teenagers in China want the iPod feeling without breaking their wallet. The asking price is 460 Yuan, note the real iPod nano is about 1,800 Yuan.

I know some of you (Apple shareholders) will not feel happy. Now you can understand how I felt when I saw people buying or wearing knockoff Crocs, as I’m a CROX shareholder 🙂

Categories
Fun

Who cares Mr. Market the most?

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1) Traders, including the grannies sitting in China stock brokage houses.

2) Hedging fund: people who have short positions, options…all these are closely related to the general market, and can have a wider swing than common stocks.

3) Mutual fund: because they have a large portifolio, they are exposed to the general market condition (weak, strong, swing etc.)

4) Economist and reporters: it’s economist job to predict the economy; and it’s reporters’ job to report the market.

Continue reading “Who cares Mr. Market the most?”