Category: Business

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Business China

Starbucks Stock and China Plan

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I mean the stocks (SBUX), not the latte. I believe the “so-so” same store sales number for the Q1 is the main reason for the recent drop. The stock is still not cheap by looking at PE (37), with projected rev/earning growth at about 20%. But this is Starbucks, normally they don’t go on sale. Near term, I believe SBUX is very much relying on the developed countries (a.k.a, US) for most of its revenue. For instance, in last 6 months I saw they opening up some new stores (some with drive through) in St. Louis and other midwest cities.

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Business

Sold HLYS Wait for CROX

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I sold all the remaining HLYS shares on Monday May 7 (before the Q1 earning announcement). While I enjoyed my Heelys shoes, the stock (HLYS) did not turn out to be as good as I expected. The main reason is I jumped too early (I bought it in on its IPO debut at 35 and 32). By doing this I have more downside than upside. The stock will under pressure short term because of its so-so guidance and the secondary offering.

Long term, I think Crocs (CROX) will be better investment than Heelys (HLYS). I saw more and more Crocs in Shanghai stores. While the sales in China is not significant at this time, as I said before, Crocs has wider appeal than Heelys and Under Armor (UA). Like Starbucks, eventually China market will grow and have meaningful impact to the company.

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Business China

Consumer Series III: non-alcoholic drinks

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I am aware Chinese are drinking more milks, juice and soda these days. Some notable names include: MengNiu (2319.HK), Yi Li (600887.SS), both are diary makers, MengNiu is NBA sponsor, Yi Li is Beijing 2008 Olympics sponsor, and Huiyuan Juice (1886.HK).

IMG_4953 

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Business Stocks

Why Companies Go Public?

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This is a too big question. But I have thought this thing for quite a while, and want to share my thoughts. A few weeks ago I was watching the “Boss Town” program at China-CBN, the host posed this exact question to the founder of Qiao Xing (Nasdaq: XING), Mr. Wu Ruiling: why do you go to Nasdaq considering the overhead of compliance (Sarbane-Oxly etc.)?

Fair question. Mr. Wu shared one reason: when a company grows to a certain stage, it’s better to have more than one boss (owner): other minority owners can contribute to the development of the company.

I think besides “better corporate governance/management”, there are at least two reasons: 1) To raise the money (capital), 2) To raise the company profile. These two reasons fit well with the recent Chinese IPOs in last Fall: New Oriental (EDU), Home Inns (HMIN), and Mindray (MR). Let’s explain one by one.

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Business China

Wedding Related Business

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I read a paper lately and found people in big cities like Shanghai spend a fortune in wedding (about same amount as people in developed countries). Here are some examples: limos and wedding dresses. I took these pictures last month.

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Business China

Consumer New Trend

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(Update Apr 26 morning) Shortly after this report, Wan Jia Wan Hao (Xin Yu Star) stock (600576) gained 5%, the maximum percentage it can go as this is a “ST” stock. What can I say about this crazy market? 

Dong Fang Securities, a Chinese brokerage firm, did a report about the new trend of Chinese consumers. Here is a summary. Some of the highlighted industry: medical, budget hotels, media (advertisement), and jewelry.

You can baidu the report if you are interested. The report listed some public companies (in China) may benifit from this trend.

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Business China

Check into Home Inns HMIN again

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I bought some Home Inns (HMIN) again yesterday. Not surprisingly the stock dropped after I bought it, as things usually happen that way. But my time frame is from couple months to couple years, so I am not worried. The recent weakness of the stock is expected due to the new offerings and lock up expiration. Also I heard some rumors in China (two key managers left the company to join competitors recently, according to 21st century business herald). At the same time, the competition is heating up among budget hotels, as shown in this article from Pacific Epoch.

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Business China

Trains to Raise Speed

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I remember in the old days (15 years ago) it took 8 hours to travel from Shanghai to Ningbo. Now it took less than 4 hours. They are raising the speed again this year, according to the news. The D series train is expected to travel at 200 Km per hour, much faster than 40 Km per hour in my college years. This is just another sign China has been through in last 15 years, on the economy.

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Business China

Online Banking in China

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I started using online banking a few months ago because I want to check out the balance in my account (at the time I was in the US, there are no ATMs I can go check my balance). This is reletively simple at cmbchina, after you install an ActiveX control from the bank. Some open source guys are pretty upset about this but this is reality in China: Microsoft product is the de-facto standard.

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Business China

Chinese Business Newspapers

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Since I came back, I have read some local business newspapers. No more Xin Ming Evening news, my favorite back in 90s. I read newspaper to get information, and more importantly, get some analysis and local perspective. One may ask why don’t I just go to Internet, e.g., baidu, sina, yahoo finance china, etc. My answer is I can not get some of the anlysis from the web, also I am an old fashioned guy. I am sharing my observations for some of the paper I have read. There is an excellent discussion about all this in this Chinese article if you are really curious.

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