Category: Stocks

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China Stocks

Chinese open to buy H shares

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Last few days is full of events for China capital market, and the new generation of the Chinese investors (capitalist?). Last weekend the captialweek, a well known magazine for investors, celebrated its 15 years anniversary and the 18 years of China capital market. The following picture is the cover of latest “capitalweek” magazine published last Saturday.

IMG_5163

Yesterday, the Chinese goverment opens the gate of H-shares to ordinary Chinese citizen. In other words, from now on Chinese citizen can buy the stocks traded in Hongkong. There is some limitations at this initial stage (people in Tianjin felt a bit lucky), as right now only the Bank of China, Tianjin Binghai branch takes your money, and BoC international (the brokage arm of BoC) take your order (Petro China? China Mobile?).

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China Stocks

Everyone wants to be Buffett

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Warren Buffett is a popular guy in China, although he has not visited China. But his book (more accurately the books about his investing philosophy) has been translated into Chinese. Such as this one, Buffett’s letters to shareholders, which is good. But there are many other knockoffs, such as this one, Lin Yuan the Chinese Buffett, I haven’t read the whole book, but read a piece of it. I think Lin Yuan is a sharp guy, but he is not Chinese Buffett.

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Stocks

Subprime 101 in picture

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The following picture is from Sina.

subprime loan pic chinese

For the full size picture, here is the link.

Of course, Sina usually has a nice collection of hot topics. Here is the link to its special topic regarding “subprime”. Job well done, Sina!

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Stocks

Subprime 101 in Chinese

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This is a link to Caijing mag, about the US subprime loans, or Mei Guo Ci Ji Zai. All articles are in Chinese.

I found this article particularly interesting. And the following excerpt very entertaining (I can imagine Cramer’s body language when he shouted).

而更有人直言，本届联储主席伯南克很可能低估了信贷危机的严重程度。惯于以近乎撕心裂肺的腔调在CNBC电视台评论股市的著名财经主持人吉姆·克雷默（Jim Cramer），在8月10日本周股市收盘后，就大喊伯南克对信贷市场“毫无了解”。

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China Stocks

Took the selloffs as oppertunity

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I know it’s not easy, especially last night (morning in the US), when we saw the market took another dive (Dow was down 300 in the begining of regular trading). But we have all been there, remember the Feb 27 “Chinese crash” and subsequent US market crash?

More recently I remember the May 30 “Chinese crash 2.0”, which happened after the goverment raised the (stock trading) stamp tax. This is used as a milestone for many analysts, and mutual funds here in China. Before that the market was filled with retail investors and they bought all kinds of craps: those so called “concept stocks”, companies which has little organic growth, but with the potential to being acquired for the “shell”; or companies who happened to own some “hot bank stocks” which will IPO soon…May 30 changed all that.

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Stocks

Baby thrown out of bath tub

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These days it’s not easy for investors who hold US stocks, because the market has been in declining mode after the sub-prime woes. Do you still remember the DOW 14,000? That was July 19, as I wrote a post “IS Dow 14000 relevant“. Well, relevant or not, the Dow has retreated and it’s now under 13,000.

As individual investors we can not precict the market, nor should we fight against the market. But as general market declines, usually there are some good stocks go on sale. For examples, the Crocs (CROX) and Mindray (MR). Both companies reported good earnings, got a pop, and now went back to the pre-earning price. Some possible explanations: CROX got dragged down by the weak US consumer sentiment, Heelys HLYS’ crash; for Mindray, I really could not find a good reason other than short term investors move money to WuXi Pharma Tech (WX). Both companies (CROX and MR) had some insider sell activities too.

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Stocks

Home Inns HMIN stays in the game

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Here is the Q2 results (Xinhua-PRNewswire). Besides revenue and earning, I’m more interested in the following numbers:

— During the second quarter of 2007, Home Inns opened 26 new hotels. As of June 30, 2007, the Home Inns hotel chain consisted of 171 hotels in operation with an additional 63 hotels under development, covering 66 cities in China.

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China Stocks

Same stock different prices

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I was thinking about buying some ICBC or BoC shares in Shanghai, but the price difference of the Shanghai and Hongkong (or ADRs in NYSE) kept me from pulling the trigger. Since one Yuan is roughly worth one HKD, why would I pay premium for the A shares if I can get H Shares (or the equivalent US ADRs) for a discount?

Unless the Yuan depreciates (relative to HKD and USD) significantly (it’s possible but unlikely), buying A shares does not make sense to me.

ICBC: 601398 (Shanghai) CNY 6.80; 1398 (Hongkong) HKD 4.80

Bank of China: 601988 (Shanghai) CNY 5.80; 3988 (Hongkong) HKD 3.80

China Life: 601628 (Shanghai) CNY 48.00; 2628 (Hongkong) HKD 30.00; LFC (NYSE) USD 57.41

Note one share of LFC (ADR in NYSE) is worth 15 shares of 2628.HK, the price of 2628.HK is the same as LFC, if we consider this units conversion and HKD/USD conversion.

The main reason for the price difference is the supply and demand: Chinese people have lots of free money (in CNY), but they can only invest inside China. The China capital market has grown significantly, but it still could not meet the demand from flood of domestic investors.

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China Stocks

Do you want to be a CEO ?

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I got to see Michael on CCTV Channel 2 yesterday. He was participating a show as a guest. The show is about the “entrepreneurs born after 1980s” (Michael was born in 1960s).

I noticed he said something interesting about New Oriental “listed in NYSE”: if I could regret, I wish we haven’t done that. On the surface it seems strange, who does not want to get rich? But I think he meant this: being listed in NYSE is a huge responsibility, if he had known all the pitfalls of “listing in the US” (not just Sabane-Oxly), he would re-consider.

But in reality he couldn’t. Because he is not the sole owner of the company. Both VC (refer to Shao’s blog about VC’s timeline) and his colleagues (many are minority stock holders) wanted to cash out. The company could use the IPO proceeds to expand; note the competition has also heated up too. The “listed in NYSE” will also help them build the brand, globally.

Back to Michael’s reponsibility. As soon as he took money from the Wall Street, he was expected to deliver the financial results to meet the street. He and his team did very well in first two Qs, but they missed the lastest Q. I bet he did not get much good sleep lately, because he needs to make sure next Q will come out OK.

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China Stocks

ICBC the biggest bank

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Yesterday, ICBC, Industrial and Commerce Bank of China (6001398.SS), went up 0.57 (just one cent shy of 10%), and closed at 6.37 Yuan. With that price, ICBC exceeded Citibank and became the world largest bank (market cap wise), and closes in Microsoft in terms of market cap (bloomberg).

I remember last time ICBC closed in Citibank was 3 or 4 months ago, but this time it has more sustance (I mean fundamental, or earnings). Chinese banks, along with real estate developers, are on the fire lately and people attribute that to:

1) The rise of the Yuan.

2) The continuing growth of domestic economy, along with rising CPI (inflation) and rising property value. The actual bank interest rate is negative if you consider the inflation (4%).

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