Category: China

Is the Chinese bull market over?

Post author By stlplace
Post date November 13, 2007
No Comments on Is the Chinese bull market over?

Reading Time: 2 minutes

(Update Nov. 17) Shuipi of ChinaTimes(水皮华夏时报) wrote this interesting piece on his newspaper.

(Original) It looks like it, from the highs at 6,200 in early Oct to 5,200 now. But wait a minute, recently the US stock market suffered big loss because of the sub-prime meltdown, and weakening of the dollar. How could the mess in the US drag down the Chinese stock market?

Well, one can say we are in a global economy now, the ripple effect of US sub-prime meltdown means the US business and consumer will watch their wallet more carefully, which is bad for Chinese exporters. We all know the Chinese economy depends a lot on exporting to the US.

China Mobile logo

Tags apple, China-mobile, Chinese-ADR, EJ, iPhone, LFT, MR, STP, WX

China Stocks

China Merchants Bank opened NY branch

Post author By stlplace
Post date November 10, 2007
No Comments on China Merchants Bank opened NY branch

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Week in review 11/04 to 11/10

1) Shanghai Univ of Finance and Economics, or SUFE, is celebrating its 90 years annaversary. SUFE also launched Shanghai consumer/investor confidence index, similar to Univ of Michigan consumer confidence index.

SUFE logo

Tags baidu, caijing, Finance, Yahoo

China IPO

Alibaba debut in HK

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Alibaba logo

(Update Nov 6) Keso wrote an interesting piece about Ma Yun and Alibaba IPO. DBANotes also has an interesting article about Alibaba IPO. The author Fenng works for Ali.

(Original) The ticker symbol is 1688.HK. It opened at HKD 30.00, a big jump from the IPO price HKD 13.50.

I have not looked at its prospectus, as I am not interested in big name IPO, nor am I an expert in B2B. Andy Yu wrote a good blog about B2B, the business Alibaba is involved in.

On the other hand, I do like the other arm of Alibaba group, the Alimama, or Ali Soft. Alimama is an online ad platform for small business. I think at some point it will challenges Baidu and Google.

Alibaba and Alimama are separate divisions of Alibaba group, the group owned and managed by big mouth Ma Yun.

Tags 1688.HK, alibaba-IPO, alimama, alisoft, Andy-Yu, B2B

China Stocks

Mindray Q3 report

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(Update) I also listened into its conference call, and it confirmed some of my thought: Chinese domestic market becomes more friendly; south America has strongest international growth, while NA has the slowest.

(Original) I went to Panera bread this morning. Here is what I saw: Bagel, 89 cents; coffee, $1.59 to $1.79. These prices haven’t changed from 3 months ago. No time to check out sandwich price (will do it later). By the way, its stock (Nasdaq:PNRA) closed under $40 ($39.28) yesterday! Sounds like a bargain?

Seriously, Mindray (NYSE:MR) had another good quarter. From its earning report, Chinese goverment finally step in and bought lots of diagnostic stuff. I think this was delayed by the anti-corruption movement last year. Also, the numbers from Europe and South America are quite strong. In other words, the US did not have a good number last quarter. Note US is supposed to be the growth driver this year. I am not sure is the purchase is delayed by the sub-prime crisis. Overall, Mindray is on the track. This is a stock one can own and have good sleep in the night.

Tags Giant-Interactive, Mindray, Panera

China Stocks

CROX not so fantastic quarter

Post author By stlplace
Post date November 1, 2007
No Comments on CROX not so fantastic quarter

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Crocs (Nasdaq:CROX) reported a solid quarter yesterday. It also raised its own year 2007 guidance, but the number is not enough to exceed the street’s “sky high” expectation. The stock already got crushed in the after hour and pre-market trading. It’s likely it will suffer for a while. But I think the fundamental of the business is intact. From my observation in China, this thing just got started…let’s see what Olympics can do for this next year.

Another interesting story about Crocs. When I told my wife that I will have big “paper loss” on CROX stock today, she said why didn’t I sell it yesterday. Yeah, I agree I was a bit too optimistic about the stock. She also said the Crocs should sell few shoes as the weather becomes colder. Very much true. I think that’s one reason the company guided conservatively for the Q4 (and 2007 full year) results.

Seasonality is more an issue for international growth because Europe and Japan, the main growth area currently, is usually colder than US in winter. Unfortunately Australia and Brazil can not make up that…

Tags Crocs, CROX, Mindray, MR, Vanke

China Fun

Back to St. Louis

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The AA 0288 flight from PVG to ORD yesterday was very much full. The airline offered $600 coupon if someone is willing to give up his/her seat, because the plane is overbooked. As usual I saw more American than Chinese, besides business people and college students, we saw a little girl played ballet in Shanghai, and got back. She (seemed) likes Shanghai.

Couple things I thought it’s interesting:

1) 10 years ago when I first came to the US from Shanghai Hongqiao airport (SHA), at that time there is no Pudong airport (PVG), I noticed St. Louis Lambert airport (STL) is much bigger than SHA. But compare STL with PVG, obviously PVG is much bigger and it’s still expanding.

I believe PVG will join the status of NRT (Tokyo) or Hongkong (HKG) some day, as a important hub for commercial flights.

Tags mcdonald

China Stocks

Speculating on Longtop Financial

Post author By stlplace
Post date October 24, 2007
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Last night (Oct 24 10 PM, Shanghai time) I bought some Longtop (NYSE:LFT) shares at its IPO debut. I think this is more like “gold rush”, not something a rational investor would usually do. After I bought it at opening ($27), the stock gapped down as low as $23.25 (see the pattern here?). But it reversed its trend in late afternoon and closed at $32.40, which is up 85% from the offering price of $17.50. Its Q2 2007 earning is $0.12, and year 2006 earning is $0.22.

Keep in mind for a growth company like LFT, PE ratio is not as good indicator as revenue growth. Here is what I saw from its prospectus (recent developments):

Tags LFT, longtop, speculation

China IPO

Longtop Financial Tech IPO

Reading Time: 3 minutes

I didn’t pay much attention to Chinese IPOs listed in US lately. This spring (March) I got into XFML, which is a big mess. Recently I traded WX (Wuxi Pharma Tech), which I think is the best Chinese IPO this year so far. But I am not a biotech/pharma guy, and I felt WX valuation was not cheap shortly after IPO, so I decided to sell it.

Today I happened to read that Longtop Financial Tech (LFT, 东南融通), an IT and software provider for financial services in Xiameng, China, will be listed in NYSE this week. You can read its prospectus here and listen to its roadshow at IPOHome. I have not got into the financial details, but from my preliminary analysis, this is a solid company in a fast growth industry (financial services in China).

From IPOHome, it will be priced between $14 to 16, and will debut this week. Note Goldman Sachs (Asia) will be the underwriter.

(Customers line up for ATM machines, China Merchants Bank, Shanghai, 2007)

Tags financial-services, IT-services, longtop, software-provider

China Stocks

A daunting task for QDII & China Invest Co.

Post author By stlplace
Post date October 16, 2007
No Comments on A daunting task for QDII & China Invest Co.

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No. I’m not kidding. Big money (billions of dollars) usually is a good thing, but not easy if one wants to beat market return in a certain time. You can ask Charlie Munger (Berkshire’s vice chairman) and he will tell you Berkshire is going to make a (market+2%) annual return from now on, according to the Q&A of his latest annual conference. For reference, Berkshire (BRK.A) has beat S&P 500 by 10% compound-anually for last 40 years.

Now Mr. Lou Jiwei, head of China Invest Co., will manage a $200 b fund. He can buy half of Exxon Mobile or GE using that money. Or, if Warren agrees, Lou can buy the whole Berkshire.

QDIIs, China AMC, China South, and Havest will each have $3 to $4 billions. Today I heard Shanghai Intl Fund Management Co. 上投摩根 attracted CNY 100 b ($13.5 b) subscription for its QDII focus on Asia pacific. They are both having the problem of “starting big”. A problem nice to have, nonetheless it IS a problem. One thing for sure is QDII can not expect to get the return of their sister funds investing in domestic A share, many of which already got +100% year to date (YTD).

Tags China-Invest-Co., QDII