Author: stlplace

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China

Reality Check on HMIN

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HMIN     
# of ADRs 32,283,906/2

Price (27Dec06) $35    
Market Cap (USD) $1,129,936,710/2    Note Google Finance has incorrect number
     
Rev (RMB)       Q1          Q2               Q3             Q4 
2005       109,405,488 (1st half)  77,733,825   98,722,199 
2006 110,671,567 138,386,977 160,352,229 170,000,000 
YoY                                                106%          72% 

Est 2006 Rev: $73,343,136 (assume 1 USD = 7.9 CNY )

Market Cap/Sales: 7.5 (it’s not totally out of whack 🙂

Note: # of ADRs is outstanding shares expressed in ADR , note one ADR = two ordinary shares   

Categories
China Stocks

Bubble in some China Stocks

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I am not good at predicting the top or bottom of stocks, so take it for what it worth…

First is the LFC, China Life Insurance, which went from 100 to 140 in a few days mainly due to the “back to China” IPO in Shanghai Stock Exchange. Note GSH and other China blue chip ADRs traded in NYSE also got a ride at the same time.

If you would argue blue chips are “safe”, here is the more speculative ones, FFHL, the little known Fuwei Film Holding from Shandong Province, went from 8.50 to 17 in a week. You could argue the stock was priced a bit low and I saw an article mentioned this. But this quick run-up of stock price reminds me of EFUT, another little known Chinese IT company.

I have neither of the above stocks. But today’s HMIN (home inns) 8% run-up after yesterday’s 6% up made me nervous: I did have positions in HMIN. I still believe this is a very good company but I decided to take some money off the table this morning. Just as you would expected (and this is one of Major’s rules): stock went up after I sold it @ 36.88, it passed 38 today.  

(29Dec06)PS, on second thought, I jumped into conclusion too fast on FFHL. I think it’s a better company than EFUT. Please read the article I mentioned and its S1 for more info.

Categories
Master Series

Peter Lynch One Up on Wall Street

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I heard about Peter Lynch and his book more than two years ago; I ordered his book from Amazon last week because I wanted to learn more about stocks and investing. I just got to Chapter 5 now, but I found his book to be educational and interesting: his humor can be felt in many places of the book. This is a much fun book than Ben Graham’s Intelligent Investing. By the way, both Ben and Peter are considered as the gurus of investment, Ben is the mentor of Warren Buffett, Peter managed Fidelity fund and had a sterling record. Peter is not a big fan of Business School although he graduate from Wharton, here is what said about B-school: Some Wharton courses were not rewarding, but even if they’d all been worthless, the experience would have been worth it, because I met Carolyn (his wife) on the campus.

Seriously, he proposed the three questions “mirror test” for investing in stocks:

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Categories
Business China

Internet Disruptions Due to Taiwan Earthquake

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It seems to me the Internet connection from China to the outside world was down, because I could not get to some of the sites from baidu news. I attached the official email from iTalkBB, my IP phone provider at the end of this post. For me it’s just some inconvenience, but how much effect it would have on the business depending on the Internet connection between China and the US? Oh well, maybe they will have a backup plan. Here is another article about the Internet outage.

From a smaller scale, I don’t know the effect on people trading Chinese domestic stocks (A shares) from the US, vice versa. In this case, a good connection means money 🙂 

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Categories
Stocks

A Good Personal Finance Blog

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I found out the Sun’s Financial Diary when I was doing Google search on LFC. The author is a China born Engineer currently working in the States. I liked this blog because it has lots of good stuff about personal finance, the author even put up the real number for his income, tax and investment, such as this one and this one, fascinating, although I won’t do it myself.

The most important “take away” I got is “patience” and “planning ahead”.

Categories
China Stocks

LFC Shanghai IPO

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It’s priced at RMB 18.88 per share, and it will go out of gate on Jan 9, 2007 in Shanghai.

Today its US ADR LFC closed at $138.42. Note each ADR represents 40 shares of A share (in Shanghai). Consider today’s USD CNY conversion rate, 1 USD = 7.825 CNY.

138.42*7.825/40 = CNY 27.08

Assume this 138 price holds, from 18.88 to 27.08, it will have 50% jump on Jan 9, 2007. And its PE ratio will be in 90s. I feel this will very much like the New York Mercantile (NMX) recent IPO, i.e., it will jump to the target price as soon as it started trading. Ordinary investors won’t have much chances to make money on this one.

Yahoo finance has an interesting aritcle on LFC (in Chinese).

Categories
China Stocks

New Trend in the China Stock Market

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I did not realized the China Life Insurance (LFC) is going IPO in Shanghai Stock Exchange (A shares) until a few days ago. I did a little research on the web and found out there are quite a few big cap Chinese ADRs are going this route: Guangshen Railway (GSH) and Aluminum China (ACH) are another two. Here is an article I found on the web: besides those US ADRs, we have a few Hongkong listed companies such as Bank of China, China Industrial and Commercial Bank, PingAn Insurance, Air China, DaTang, etc.

So far the best performing stock is LFC; GSH also got a jump in past few days. Should have done research on this earlier: stock market is not like pursuing girl friends, besides being focused one should also be vigilant on new things.

Who is going to be the next one on the “back to China IPO”? I don’t know. But I believe the trend will continue, and one of the safe way to bet on this is investing through ETFs such as FXI. Sun’s Financial Diary has a very good analysis on this.

Categories
Saint Louis

BB’s Jazz Blues and Soup

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Went to the BB’s Jazz, Blues and Soup at 700 South Broadway, which is quite a blast. This is my first time to a Jazz bar, although I have listened to the Jazz on NPR in the Sunday evenings for a long time. I thought about going to New Orleans, which is the birth place of the Jazz, but never made the trip. I heard St. Louis has the Jazz and Blues traditions especially in the 50s, the scene I saw at BB’s confirmed this. There are quite a good turn out at the bar. Although I may not be the best person to comment on the music, I enjoy it very much. Life is more than work, computer, stock and other cold hard stuffs. Music and friends should be a big part of it, especially in the holiday season.

Categories
Fun Stocks

Heelys Sold Out in Sports Authority?

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I went to the SA store at Brentwood, and I saw they emptied half of the shelf which was originally for Heelys (they put on some Under Armour socks instead). Is that a sign they are sold out? I don’t know. But one thing I do know SA usually have all the available shoes on the shelf, in other words, a customer can try the shoes without asking help from the associates. This is opposite to specialty stores such as Journeys: in Journeys a customer would tell the size he/she wants, and the associates will go back to the warehouse and bring up the shoes. I guess that’s one reason Journeys’ shoes are fully priced.

There are some negative comments on Heelys, both the shoes and the stock. Barron had this article on the weekend paper. It mentioned two things: Heelys is not only faddish but aimed at a notoriously fickle customer (kids); there is also product-liability risk (kids got hurt when skating on Heelys). While these are both legitimate concerns, here is a parent’s comment I saw from fatwallet “Kids crack their heads riding bikes, skateboards, and scooters. Kids crack their heads on the playground. Heelys get your kids to turn off the TV and be active and there are health benefits to that.”

While the stock could take a hit from the Barron article, I believe ultimately it’s the sales and profit number that will matter. Interestingly, when I was about to leave the SA store, I saw a guy bought not one, but two Heelys shoes for his kids. Maybe they are really sold out?

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Categories
Business China

eBay’s New Strategy in China

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eBay’s China effort took a big hit today, or use eBay’s own term, they are adopting a “new strategy” in the China C2C market: they are going to team up with Tom Online on the online auction site. Whatever the term they use, the real story is they were losing market share ever since they acquired the eachnet, and put it under eBay China umbrella. There are many external factors to their failure:

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