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China Stocks

Xinhua Finance Media IPO Fiasco

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Xinhua Finance Media Limited (XFML) did not turn out to be another Home Inns or New Oriental, at its IPO debut last Friday. Besides the difference of market sentiment then and now, I think the fundamental reason lies within the company and the business itself.

First Xinhua Finance is in the media and advertising business. Note media industry is still heavily regulated in China, this is different from Home Inns’ economy hotel business, which is pretty much a free market (as long as they can secure the building).

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China Stocks

Color on Mindray Q4 2006 Results

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Well, Xinhua Finance Media Limited XFML IPO nearly broke my heart, kind as I expected. The good thing is WR Hambrecht only allocated me 100 shares, out of 200 shares I indicated to buy.

On a positive note, Mindray reported a good quarter and a good year. Here is the results. Going forward they expect “total net revenues for full year 2007 to be in the range of RMB2,120.0 million to RMB2,150.0 million”, this is about 40% revenue growth over 2006. The international market will be the key growth driver; domestic market is picking up after last year’s anti-corruption campaign.

Interestingly, the market decided to hold a sell off on MR today.

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China Stocks

Harvest Fund in China

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Mutual fund is a hot commodity in China these days, as the domestic stock market became really hot in last year. While the mutual fund industry is still in its early stage, I found this Harvest Fund to be impressive. I watched an interview of its manager, Mr. Zhao Xue Jun, at CBN (No. 1 Cai Jing, my default TV setting these days). Here is Harvest Fund (Jia Shi in Chinese) home page and here is an interview of Mr. Zhao by No. 1 Cai Jing News.

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Stocks

Holly Heelys

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Listened to Heelys first conference call over the Internet because I got waked up by the luggage delivery people at 5 AM. Now I got both luggages from the United Airline. I am happy despite they deliver it on strange time such as 12 AM or 5 AM. I do appreciate the delivery team’s hard work though.

Back to conference and Heelys earning report. The Q4 result is as good as I expected. You can see the number here. Although they did not give the guidance but in Q&A session they gave out the backlog as of Dec 31 06 is $ 50 m, which we could assume will be filled in Q1 07. So the Q1 07 result will also be good. Going forward they only say 20 to 25% in next few years. It’s probablly a very safe number for them.

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China Stocks

Xinhua Finance Media IPO Update

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(Update 07Mar07) I saw an updated F1 prospectus at SEC web site. So I would assume the IPO is still on?

Just heard from a friend in the States, this is not offical, but the rumor is the IPO is called off. I assume the reason is the recent sell off of Chinese stocks inside and outside China scared lots of potential foreign buyers.

IPO is a very interesting game for issuing companies, underwriters and buying institutions. Companies do the road show and get people excited. They also talked to underwriter to determine the issuing prices. The underwriters bought all these shares from companies at the issuing price and sell those shares to institutions (a.k.a, their buddies). They receive a fee from this transaction.

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China Stocks

Shanghai Market is Still Hot

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This is from what I feel after spending 36 hours Shanghai. I read quite a few newspaper, magazine, and watch the “finance” section on the TV (first Caijing etc.), as part of research for Xinhua Finance Media IPO, stock market is a very hot topic in all those places. The scary part is, in one program this analyst promoted how easy it is to make money using options (as Quan Zheng in Chinese).

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China Stocks

Got to Shanghai

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I am in Shanghai now. The flight connection was not as smooth as I expected, finanlly I got here about 5 and a half hours late than original schedule. I got oppertunity to see the new Beijing airport on the way: very impressive infrustructure. I guess it’s ready for the big party in 2008. I will talk more about my thoughts and airline customer experience later.

I also read Buffett latest anual shareholder letter as I talked in my previous post. Very good stuff and fairly easy to read.

My second reading assignment is Xinhua Finance Media F1 prospectus. I agree with some of the analysts the valuation is a bit high at $12  to $14. It implies a market cap of $800 m and note its 2006 revenue is about $59 m. I don’t think media and advertising industry enjoy a high margin. The growth oppertunity is there, so is the competition and challenge…I flipped through the TV channel and was impressed by the “No.1 Caijing”, the competitor program of Xinhua’s Fortune China. I tried to search for Fortune China but was not successful.  

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China Stocks

Xinhua Finance Media Limited XFML IPO

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I received an Email from my broker WR Hambrecht asking me if I am interested in Xinhua Finance IPO. I talked it a little in a previous post; now I feel it’s not another Maritz. Also after yesterday’s crash, I got a little warmed up on it. So I called them and indicated my interest. Don’t know if I will get some. We will see.

Here is their F1 prospectus. I think some of comparables include: FMCN, JRJC in China and Viacom, Reuters in the US. Just on the top of my head, will do my reading and report my finding later. By the way, Xinhua is a very well known name and brand in China.

xinhua finance pic

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China Stocks

Let’s Blame China

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First, a little disclaimer, the title was inspired by my friend Zhong Siwei “Let’s think China” blog. I think this pretty well summerizes the “blaming game” after yesterday’s global market sell off. Whether it has credit or not, from CNBC to the Newspaper and Internet, all fingers pointing to one place, China. No wonder typically soft spoken Premier Wen Jiabao, firmly declared “financial market stability is the key….”. I think he really meant “it’s not our fault”. 

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Stocks

Not a Pretty Day

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I mean the stock market. Dow lost more than 400 points. My brokage account lost about 10% of its value today. The biggest decliners are Home Inns (HMIN) and Mindray (MR); but Crocs (CROX) and Heelys (HLYS) are not helping either 🙁

Now the question is: is this a healthy correction? Or the beginning of (dare I say) bear market? I don’t have the answer. Personally I feel the market needs some sort of correction, especially in China, where the reality did not support the hefty stock prices. But do I think US consumers and business suddenly hit the break on everything? Probablly not. Same thing can be said else where.