Author: stlplace

Categories
China Stocks

Home Inns and Mindray

Reading Time: < 1 minute

MR closed above HMIN the first time since its IPO last Sept. MR closed at 30.89, while HMIN closed at 30.81.

This comparison is mostly for fun. But seriously I do think HMIN is increasing under competitive pressure in China. Here is another hotel chain, Hanting Hotels, founded by Ji Qi, the co-founder of Ctrip and Home Inns. Recently it raised $85 m from VC, this is no small change considering Home Inns raised about similar amount last Oct. through IPO. In last two years Hanting Hotels targeted mostly business travellers who are willing to pay more than CNY 268, but this has changed since early this year, as they entering into the budget hotels arena (head to head against HMIN). In the past HanTing’s profit margin is about 5% higher than HMIN. Of course one can argue that the “budget hotels” pie in China is growing too, so all the players will benefit. I am curious to learn more about this as I’m coming back to China very soon.

On the other hand, it’s far more difficult to enter into the medical device business where Mindray is in, that’s one thing I liked about this business.

Last but not least, Starbucks will raise the price of its beverage by 9 cents starting next week.

Categories
Fun Stocks

My investing Journey II: late 2003

Reading Time: < 1 minute

Today I saw in the news that Opsware (OPSW) is bought out by HP. Interestingly, OPSW is one of the first stocks I bought in my Scottrade account. The reason I bought it is simple: it’s being mentioned in the Kiplinger Personal Finance magazine, and its founder and CEO Marc Andreessen is the developer and the co-founder of Netscape. Opsware is software/solution provider for data centers, it did not turn out to be a blockbuster, but I did get moderate return on this one (in a few months).

Another stock I traded is GE, the well known US conglomerate which makes things from aircraft engines to trains. I bought it at around 29, and sold it at 32 a few months later (same for OPSW). Today it’s at about 40. The GE stock did not do too much in past four years, the great bull market. But it started to move up lately. Some people argue that when large cap stocks (like GE) move up, we are at the last stage of bull market. Let’s see.

Back to Opsware, it’s Mr. Andreessen’s second baby. It’s not as spectacular as the Netscape IPO, but notheless did bring some values to share holders if they are patient to hold it for 4 years (from $5 to $14). It’s interesting to see the “serial entreprenurs” such as Neil Shen, Ji Qi co-founded Ctrip, Home Inns, and working on the next big idea now. But typically if someone hits something really big, it’s hard to create the “second baby” exceeding the first one. Bill Gates and Jeff Bezo both has one baby: Microsoft and Amazon. Steve Jobs is an exception: he co-founded both Apple and Pixar, the animation company created Toy Stories, and Finding Nemo.

Categories
Fun

Weekend random discussions

Reading Time: < 1 minute

1) Walmart and Sam’s club: my friend thinks wal-mart has the lowest price for most things. He is looking for a mattress, and he asked why “Wal-mart does not carry the mattress”? I think the implied meaning is: he can be sure getting a deal if it’s sold in Walmart.

I know many people have similar perceptions about Walmart and Sam’s club: they think the price at Walmart is always lowest. A while ago, I read from a report this is not always the case. But Walmart obviously created a good impression (price advantage) on many consumers.

2) Isn’t Hyundai made in Korea? While at a parking lot, a few guys looked at my Nissan Altima, and their Hyundai Sotana (both are black), they mistook my car also as Hyundai’s. So we started the conversation: oh, your car is Nissan, it’s Japanese. Our car is Hyundai, it’s made in Korea. My reply: well, actually my Nissan Altima is made in the USA, and I believe Hyundai made cars in the USA too. So we got a little discussion about the cost, the union, etc.

Categories
China Stocks

Wang Shi and Vanke

Reading Time: 2 minutes

Among Chinese CEOs, I think Wang Shi is real good. I read his book “Road and Dream” lately. Very impressive. Consider what he and his team has done in last 20 years: from nowhere to No. 1 residential real estate developer in China; more importantly, they create a “Vanke” community, the kind of community Chinese middle class are enjoying.

IMG_3774

He talked many things in that book, some of the things I liked:

1) Don’t seek abnormal profit margin: he said Vanke will only do the project with less than 25% profit margin. More recently he is talking about the bubble in Chinese real estate market. Will other real estate company’ chairman say that? Unlikely.

2) Organization and efficient: as a company grows, it will usually become less efficent. The cost of management rises. If a company does not pay attention to this, eventually its internal cost will exceed the money it could make. In other words, it will no longer be profitabble. How to stay nimble as company growing big is very important.

Wang Shi Vanke

Interestingly, Wang Shi’s wife got into the “stock insider sell” controversy lately. You know what did Wang Shi do? He returned the profit from the stock sell to the company.

From management point of view, Vanke is solid because it already has a team of professional managers. Mr. Wang gave up day to day operations and CEO title to someone else, and is enjoying “mount climbing”, partitipating “Boss town”, giving speeches, etc.

Categories
Fun

Bill Miller’s childhood story

Reading Time: 2 minutes

From CNNMoney, the full article is here:

I was nine years old, and I walked in to see my father reading the financial pages of the newspaper. And they didn’t look like the sports pages or the comics or whatever.

So I asked him what they were. And he said they were financial pages.

And I said, “What does that mean?” And he said, “Well, these are stocks.”

I said, “What’s a stock?” And he said, “Well, look at this thing. See this thing? This represents a company.” And he said, “And see this ‘+ .25’?”

And I said, “Yeah.” He said, “Well, that means that if you own this company, one share of it, which cost you like ten dollars, then if you owned it yesterday, then today you have 25 cents more than you had yesterday.”

Continue reading “Bill Miller’s childhood story”
Categories
Fun

Week in review 07-15 to 07-21

Reading Time: < 1 minute

1) StrengthTrader listed the greatest investors of all time (in Chinese). Among them I am familar with Buffett, Fisher and Lynch. I think Bill Miller is the Peter Lynch in current Mutual Fund world.

2) Alibaba is hiring, they are adding 2,000 people by the end of 2007. Meanwhile, Ali’s little bro Ninetowns is shrinking, they are laying off people after recent acquisition.

3) Save $10 off Crocs through CrocFans.com.

4) Investor Trip Starbucks experience. My comment: it’s about experience, not just about coffee (i.e., coffee buyers at McDonald and Dunkin Donuts are different groups).

5) Sun’s Financial Diary’s “Pay ourselves first”. I remember seeing one of the guest on CNBC “Millionare Inside” said similar things. Well, Sun has made significant progress on this aspect too. Very good job.

Categories
Fun Stocks

IS Dow 14000 relevant?

Reading Time: < 1 minute

Yesterday Dow Industrial closed above 14,000 the first time in history. Many people, bulls, bears, analysts, CEOs, ordinary workers,…all get excited about this. Many US workers have 401k plan, and I bet some of that is invested stocks (indirectly through Mutual Fund).

But Dow Industrial is NOT a good indicator of the overall stock market. I read it first in Ken Fisher’s latest book “The Only Three questions that count“, this was also confirmed by Mark Faber (CNBC) and trader Mike. Here are the reasons:

1) The 30 stocks of Dow Industrial made up a tiny fraction of overall US stock market. It does contain stocks from different industries, but it’s not as diversified as S&P 500.

Continue reading “IS Dow 14000 relevant?”
Categories
Fun Stocks

Some interesting numbers

Reading Time: < 1 minute

Heelys sold 5.1 million pairs of its walk/skate shoes in the US during 2006. Note in the US there are about 36 million kids between age of 6 to 14, Heelys’ core customer. In other words, every one out of 7 kids in the US got a pair of Heelys, which sells from $49.99. The question for Heelys is: how far can this go? Can they sell to the other 6 kids? Or can they make the existing customers come back?

As of last quarter, Home Inns (China) has 145 hotels in operation, with average 120 rooms per hotel (total about 18,000 rooms). Home Inns got about 268,000 members, which account for more than 40% of its sales (hotel stay). To make it simple, about 7,200 (= 18,000 * 40%) is reserved for the members. A quarter has 90 days, so there is 7,200 * 90 = 648,000 room nights. So on average each member stayed 2.5 (= 648,000/268,000) nights in Home Inns last quarter.

Categories
China Stocks

E-House China: the brand

Reading Time: 2 minutes

From the F1 Prospectus:

“…Mr. Zhou has over 14 years of experience in China’s real estate industry. Mr. Zhou has been the chairman and president of Shanghai Real Estate Consultant & Sales (Group) Co., Ltd. since 2003. From 1997 to 2003, he served as a director and the general manager of Shanghai Real Estate Exchange Co., Ltd., and as the deputy general manager of Shanghai Jinfeng Investments Co., Ltd., a company listed on the Shanghai Stock Exchange…”

What is Jinfeng Investment Co. exactly? Well, it’s the owner of Jinfeng Yiju (easy housing), here is its web site www.ehousee.com. While it’s not as popular as the leading China real estate web site soufun.com, Jinfeng Yiju (its web site and stores) are quite popular in Shanghai and a few neighbouring cities. I have looked for houses using their web site, and they give decent results. They have retail stores (offices) too.

On the other hand, the E-House China has only a corp web site at www.ehousechina.com. So much for the “e”. But I did see their offices in a few places. They have a big listings in the Hongqiao office.

jinfeng yiju pic

So what am I trying to get? It seems odd to me initially that two companies shares similar names or trademarks. I guess the people at Jinfeng probablly just let Mr. Zhou use their name because they are “friends”.

E-house China logo

Categories
China Fun Stocks

I want to be a translator

Reading Time: < 1 minute

Pacific Epoch is a boutique investment research firm based in Hongkong (and Shanghai?). I read its China financial news from time to time, and liked its content.

It also provide services and reports to institutional investors. This is the price tag for translating a Chinese article, $5000 (to see a bigger pic, click below).

pEpoch

Man, I want to be that lucky translator 🙂