stlplaceIt’s that season again. I saw people carrying around Moon cake bags, presumtably many got it from Danwei. That’s one good thing working in China, you got a lot freebies during holidays, that’s different from west. Can not imagine that companies in the US will give away Turkey coupon during Thanksgiving.
Anyway I like the holiday logos created by Google, and followed by Baidu. Here they are.
Happy Mid Autumn Festival/Zhong Qiu Kuai Le 🙂
Last Saturday when I was reading the Shanghai Business Review magazine in a Starbucks (Hongqiao Parkson), I was a little surprised to learn there are 570,000 foreign expatraites living or working in Shanghai. Hangzhou, the scenic city near Shanghai, has 8,000.
I remember in year 2003 or so, the ShanghaiExpat web site just got started by a guy. The site was very simple. Four years later, the site has grown up and last weekend there was an “Expat Exhibit” in the Shanghai Exhibit Center (I didn’t go there). Similarly, I was fascinated to read how Craig started NingboGuide.com:
First a little update about the Typhoon Wilpa. Shanghai did not take the direct hit, or use my now retired boss words “we dodged another bullet”, he was referring to his condo at Florida during Hurricane season. More importantly, Shanghai suffered minimal human loss because of comprehensive preparation before the storm. More than 290,000 people moved out of vulnerable area. Unlike in the past, human lives are more treasured in China nowadays compared to properties. How is this related to Crocs?
Well, recently there are lots of accicent reports regarding Crocs wearing kids got hurt taking escalators. I read an earlier report and wrote a post about it. But now it seems more and more parents are worrying about the “safety of crocs”. I think they are shooting at the wrong target. I believe the escalator safety is a problem we have ignored from time to time, and now with the kidding wearing Crocs, this problem becomes more obvious.
These days I got more oppertunities to ride escalators because I work at Cloud 9. There is a huge escalator which takes one from the 1st floor to 4th floor. When I took it the first time, I was a bit shaky, because of its height. I don’t have kids, but I think if I ever take my niece there, I will probablly hold her instead of let her ride on her own.
I sold Wuxi Pharma Tech (WX) this morning, at $28.81. Not surprisingly the stock continued up after I sold it. I bought it a month ago at $21.80 so I’m happy. The stock is a bit expensive at current price ($30), considering its PE (about 100), profit margin, and its 2007 est. revenue. Another thing to consider is competition. It’s definitely more difficult than open economy hotels (Home Inns, HMIN), but I think it’s still doable (exp. and connections with big pharmas in the west).
Separately, Beijing Bank did IPO today in Shanghai, under tick symbol 601169. It started at 23.00, went as high as 25, and closed at 22.68. At current price, its year 2007 PE is more than 50. Crazy!
I was looking for a secular growth stock in China. By secular growth I mean the business grows continously without the normal business cycle. One benifit of secular growth is it usually does not go up or down a lot as economy cycle does. A side benifit of this is we (investors) can sleep better in the night 🙂
The opposite of “secular” is “cyclical”. For example, we normal think the following industries are “cyclical”:
1) Oil, metals and other commodities;
2) Real estate (we have seen the downturn in the US housing market lately);
It is said the largest typhoon in a decade, will hit Zhejiang province and Shanghai on tomorrow evening.
Heavy rain already came today.
Week in review 09/09 to 09/15
1) One dollar is 7.50 Yuan. This is the rate I got from China Construction Bank ATM today, using my BoA debit card.
2) The China People’s Bank raised interest rate (by 0.27%) again in the weekend.
3) Moon cake coupon: there are many “moon cake coupon” flippers these days, as mid-autumn festival is approaching. Basically they buy the moon cake coupon from people who got it from Danwei, and resell it to make a profit. The catch is most moon cake coupons will expire on Sept. 25, just like the stock options expires on the 3rd Friday of each month in the US market 🙂
4) Lots of books about stocks, investing in the book store: from Warren Buffett to Peter Lynch, and many “experts” I never heard of.
Chinese stocks are becoming more and more expensive. From different statistics, average PE of the market is in 40s. This is not cheap compared to around PE 18 of US S&P 500. There are many reasons for that, and I’m not jumping into it. But I want to share an interesting phenomena here: these days the fund managers, and individual investors are looking for valuation safe haven, or in Chinese terms, 价值洼地.
What does that mean? Lately because some of the blue chips are so hot, they got PE of more than 50. For instance, Vanke (000002), is traded at 32 Yuan, the est. year 2007 earning is 0.60 Yuan, so the PE for 2007 is about 53. Note this is No. 1 weighted stock in Shenzhen Index (about 16%), and its market cap (more than 200 b Yuan, or $30 b) is more than top 4 US home builders combined. (Vanke is No. 1 builder in China and it has about 1% market share). China Merchants Bank (600036) has similar problems. By the way, I believe those are two best managed companies in China.
I remember seeing a book written by John Bogle (the founder of Vanguard) where he suggested “individual investors should buy mutual fund not stock”. I agree with some of his arguments, such as diversification. And I believe that’s also the fact in the US: where pension fund and university endowment fund invested in stocks, mostly through mutual funds. But I don’t agree with his conclusion.
Come back to China. Since the inception of Chinese stock market, invididual stock investors, or Gu Ming 股民 have been an important force. Some made money, more lost money in this process. New blood filled in when old guys got wiped out.
The saga of applying the US visa. Warning: for entertainment purpose only. I am not providing any advice for visa application.
Last Friday I went to the US consulate Shanghai for the worker visa, with my wife applying H-4. Ten years have passed since I first applied the student visa. A lot things have changed: namely Internet and call center. These technologies have been integrated into the visa application process, such as the calling card (issued by China Citic Bank) and the appointment system. Here is how it works: the applicant buys the calling card from the bank, call the 400 number (like 800 # in the US), talk to the representative and schedule the appointment. We got our appointment that way. But when we reached the West Nanjing Rd. at 12:45 PM, wait for our 1:15 PM appointment, we found a long line already being formed. Later we learned the appointment system is used for the consulate to estimate how many people will show up, in reality the applicants still show up in early morning or afternoon, waiting the line. Because most everyone (except me, and few others) is so eager to visit US 🙂