Category: Stocks

Categories
Stocks

Lots of conference call

Reading Time: < 1 minute

I need to listen to the following calls because I hold those stocks.

Today: CROX, I don’t want to speculate on this one…too much buzz lately.

Next week
07/31: SNIC, have no idea.

08/01: SBUX, the expecation is more reasonable this time, I don’t expect block buster quarter but I think they should be OK (better than PNRA, maybe?)

08/02: GSIT, they blew up their very first quarter since IPO last time, hope they don’t disappoint this time. Their biggest customer, Cisco, has been strong lately.

The week after:
08/06: MR, I expect solid growth in the US sales; I have no idea about China.

08/07: HLYS, street expectation is low; they blew last CC because of the secondary offering thing. I expect some upside surprise.

Categories
Stocks

Got some Heelys again

Reading Time: < 1 minute

Yeah, I know it’s risky, because I’ve been there. But I’m not insane. I think the recent sell off is a bit over done, at least from my store checking: Dick’s Sporting Goods, Finish Line and Sports Authority are displaying new Heelys for “back to school” season. I assume those guys don’t just put there for show, I think they do want to sell the shoes and make money instead.

Earnings:
The company is due to report its Q2 earnings on August 7.

CEO Interview:
Adarsh did an interview with its CEO and posted in his blog. By the way, CEO Mike Staffaroni has worked for LA Gears (a fashion sports shoes co.) in 90s, and hopefully he and his team learned lessons from the boom and bust of LA Gears, and make Heelys a long term success.

Categories
China Stocks

Got Yuan?

Reading Time: 2 minutes

Yuan CNY RMB Pic

It’s the Chinese Yuan (CNY), or Ren Ming Bi (people’s money). In early march, when I was in Shanghai, one USD is worth 7.72 Yuan, now it’s about 7.56 Yuan, a loss of about 2% in about 4 months. It appears this trend is not going to stop for a while. This is scary if you happen to make money in USD, save it USD and plan to retire one day in China. Because the dollar may drop faster than the rate of saving. So how do we play this?

Besides buying Chinese real estate, or buying the A-shares in Shanghai or Shenzhen (or H-shares in HK), there are other options. The mutal funds with a focus on China, or Chinese ADRs (stocks) traded in NYSE or Nasdaq. Some of the well known names include:

FXI: the full name is iShares FTSE/Xinhua China 25 Index, you can see its holdings here: it’s basically a basket of Chinese red chips traded in HKSE, such as CNOOC (CEO), Petro China (PTR), China Mobile (CHL), China Life (LFC). Those stocks are also traded as ADRs in NYSE (you may click on the ticker above to check out each stock).

LFC: on the surface LFC is a life insurance company in China. It’s more than that. It actually is a holding company of many domestic companies. For instance, it has significant stakes of MingShen Bank (600016), and Citic Securities (600030), both of them are listed in Shanghai Securities Exchanges (SHSE).

Both FXI and LFC have done very well lately, as you may know, because of the red hot Chinese stock market. I don’t personally own them. But my friend Sun has LFC, and it has done very well for him (of course he bought it long time ago so his cost is much lower). I think those two are good options if one doesn’t want to spend much time on stocks: keep in mind if you plan to hold it for long time, you can wait for a pull back to build your position.

Categories
China Stocks

EDU: missed 5 cents

Reading Time: < 1 minute

in its fiscal Q4 2007 earning. The analysts were expecting 1 cent, while EDU reports loss of 4 cents. Ouch, that’s even worse than last week’s Google’s miss (3 cents).

Seriously, I don’t think missing a few pennies is not big deal for long term investors. But the reason behind the miss is more important. In EDU’s case, on the surface it’s the seasonality: the late arrival of Chinese New Year this time push sales from fiscal Q4 to Q3.

I did listen to its conference call (7 AM!), here are a few highlights:

1) The English training still is the main revenue source and growth driver, that includes: oversea test preparation (students enrollment increased from 35,000 in fiscal 2006 to 58,000 in 2007) ; kids English; middle school students English.

2) New growth area: other subjects (math, physics, chemstry etc.) for middle school students; pre-school kids education (not limit to English).

3) Tier one, tier two: plan to add more learning centers in tier one cities (Beijing, Shanghai), note Shanghai is the fastest growth city; it won’t open many schools in tier 2 cities (mostly kids English) where it did not get good name recognition (this strategy is opposite to Home Inns’).

The stock got punished today as people were expecting a block buster number. I don’t bet on earnings these days, nor will I try to catch the falling knife here. I think a 30% growth is good if they can sustain the growth for a while, but the street obviously expects more.

Categories
China Stocks

Home Inns and Mindray

Reading Time: < 1 minute

MR closed above HMIN the first time since its IPO last Sept. MR closed at 30.89, while HMIN closed at 30.81.

This comparison is mostly for fun. But seriously I do think HMIN is increasing under competitive pressure in China. Here is another hotel chain, Hanting Hotels, founded by Ji Qi, the co-founder of Ctrip and Home Inns. Recently it raised $85 m from VC, this is no small change considering Home Inns raised about similar amount last Oct. through IPO. In last two years Hanting Hotels targeted mostly business travellers who are willing to pay more than CNY 268, but this has changed since early this year, as they entering into the budget hotels arena (head to head against HMIN). In the past HanTing’s profit margin is about 5% higher than HMIN. Of course one can argue that the “budget hotels” pie in China is growing too, so all the players will benefit. I am curious to learn more about this as I’m coming back to China very soon.

On the other hand, it’s far more difficult to enter into the medical device business where Mindray is in, that’s one thing I liked about this business.

Last but not least, Starbucks will raise the price of its beverage by 9 cents starting next week.

Categories
Fun Stocks

My investing Journey II: late 2003

Reading Time: < 1 minute

Today I saw in the news that Opsware (OPSW) is bought out by HP. Interestingly, OPSW is one of the first stocks I bought in my Scottrade account. The reason I bought it is simple: it’s being mentioned in the Kiplinger Personal Finance magazine, and its founder and CEO Marc Andreessen is the developer and the co-founder of Netscape. Opsware is software/solution provider for data centers, it did not turn out to be a blockbuster, but I did get moderate return on this one (in a few months).

Another stock I traded is GE, the well known US conglomerate which makes things from aircraft engines to trains. I bought it at around 29, and sold it at 32 a few months later (same for OPSW). Today it’s at about 40. The GE stock did not do too much in past four years, the great bull market. But it started to move up lately. Some people argue that when large cap stocks (like GE) move up, we are at the last stage of bull market. Let’s see.

Back to Opsware, it’s Mr. Andreessen’s second baby. It’s not as spectacular as the Netscape IPO, but notheless did bring some values to share holders if they are patient to hold it for 4 years (from $5 to $14). It’s interesting to see the “serial entreprenurs” such as Neil Shen, Ji Qi co-founded Ctrip, Home Inns, and working on the next big idea now. But typically if someone hits something really big, it’s hard to create the “second baby” exceeding the first one. Bill Gates and Jeff Bezo both has one baby: Microsoft and Amazon. Steve Jobs is an exception: he co-founded both Apple and Pixar, the animation company created Toy Stories, and Finding Nemo.

Categories
China Stocks

Wang Shi and Vanke

Reading Time: 2 minutes

Among Chinese CEOs, I think Wang Shi is real good. I read his book “Road and Dream” lately. Very impressive. Consider what he and his team has done in last 20 years: from nowhere to No. 1 residential real estate developer in China; more importantly, they create a “Vanke” community, the kind of community Chinese middle class are enjoying.

IMG_3774

He talked many things in that book, some of the things I liked:

1) Don’t seek abnormal profit margin: he said Vanke will only do the project with less than 25% profit margin. More recently he is talking about the bubble in Chinese real estate market. Will other real estate company’ chairman say that? Unlikely.

2) Organization and efficient: as a company grows, it will usually become less efficent. The cost of management rises. If a company does not pay attention to this, eventually its internal cost will exceed the money it could make. In other words, it will no longer be profitabble. How to stay nimble as company growing big is very important.

Wang Shi Vanke

Interestingly, Wang Shi’s wife got into the “stock insider sell” controversy lately. You know what did Wang Shi do? He returned the profit from the stock sell to the company.

From management point of view, Vanke is solid because it already has a team of professional managers. Mr. Wang gave up day to day operations and CEO title to someone else, and is enjoying “mount climbing”, partitipating “Boss town”, giving speeches, etc.

Categories
Fun Stocks

IS Dow 14000 relevant?

Reading Time: < 1 minute

Yesterday Dow Industrial closed above 14,000 the first time in history. Many people, bulls, bears, analysts, CEOs, ordinary workers,…all get excited about this. Many US workers have 401k plan, and I bet some of that is invested stocks (indirectly through Mutual Fund).

But Dow Industrial is NOT a good indicator of the overall stock market. I read it first in Ken Fisher’s latest book “The Only Three questions that count“, this was also confirmed by Mark Faber (CNBC) and trader Mike. Here are the reasons:

1) The 30 stocks of Dow Industrial made up a tiny fraction of overall US stock market. It does contain stocks from different industries, but it’s not as diversified as S&P 500.

Continue reading “IS Dow 14000 relevant?”
Categories
Fun Stocks

Some interesting numbers

Reading Time: < 1 minute

Heelys sold 5.1 million pairs of its walk/skate shoes in the US during 2006. Note in the US there are about 36 million kids between age of 6 to 14, Heelys’ core customer. In other words, every one out of 7 kids in the US got a pair of Heelys, which sells from $49.99. The question for Heelys is: how far can this go? Can they sell to the other 6 kids? Or can they make the existing customers come back?

As of last quarter, Home Inns (China) has 145 hotels in operation, with average 120 rooms per hotel (total about 18,000 rooms). Home Inns got about 268,000 members, which account for more than 40% of its sales (hotel stay). To make it simple, about 7,200 (= 18,000 * 40%) is reserved for the members. A quarter has 90 days, so there is 7,200 * 90 = 648,000 room nights. So on average each member stayed 2.5 (= 648,000/268,000) nights in Home Inns last quarter.

Categories
China Stocks

E-House China: the brand

Reading Time: 2 minutes

From the F1 Prospectus:

“…Mr. Zhou has over 14 years of experience in China’s real estate industry. Mr. Zhou has been the chairman and president of Shanghai Real Estate Consultant & Sales (Group) Co., Ltd. since 2003. From 1997 to 2003, he served as a director and the general manager of Shanghai Real Estate Exchange Co., Ltd., and as the deputy general manager of Shanghai Jinfeng Investments Co., Ltd., a company listed on the Shanghai Stock Exchange…”

What is Jinfeng Investment Co. exactly? Well, it’s the owner of Jinfeng Yiju (easy housing), here is its web site www.ehousee.com. While it’s not as popular as the leading China real estate web site soufun.com, Jinfeng Yiju (its web site and stores) are quite popular in Shanghai and a few neighbouring cities. I have looked for houses using their web site, and they give decent results. They have retail stores (offices) too.

On the other hand, the E-House China has only a corp web site at www.ehousechina.com. So much for the “e”. But I did see their offices in a few places. They have a big listings in the Hongqiao office.

jinfeng yiju pic

So what am I trying to get? It seems odd to me initially that two companies shares similar names or trademarks. I guess the people at Jinfeng probablly just let Mr. Zhou use their name because they are “friends”.

E-house China logo