stlplaceTo summerize,
| 17-Jan-07 | CIBC Wrld Mkts | Initiated | Sector Perform | |
| 17-Jan-07 | JP Morgan | Initiated | Overweight | |
| 17-Jan-07 | Bear Stearns | Initiated | Outperform | |
| 17-Jan-07 | Wachovia | Initiated | Mkt Perform |
The full story is here. I would not take their ratings too seriously (I would like to read their analysis instead). The 60% sales increase in California (No. 6 economy in the world if considered as a country) in 2006 is a good sign. Is California a mature market as the analyst suggested? I don’t know.
I summerized its year 2005 and 2006 (low end) number here. I noted that the revenue year over year growth slowed a bit (consider first 9 months growth about 41%). This can be attribute to the continuing “anti-corruption” campaign in China hospitals.
2005 2006 YoY
Rev (CNY) 1,078,573,000 1,470,000,000 36.29%
Income 205,089,000 360,000,000 75.53%
Earning (CNY) 2.40 3.73 55.42%
You can read the news here.
I don’t know why the stock went down this morning after a good earning report. Anyway guessing stock price’s daily fluctuation is not my job. I did listen to the conference call (script by seekingalpha) and it seems to me Michael and Louis did well, although Michael’s English is not perfect. Some of the growth driver:
1) Elite English, I believe this is more like “business English”, I know in Shanghai there are “WallStreet English”, “Webber English”, etc. Don’t know how New Oriental will do in this new space. But profit margin in this area is better because those customers are not price sensitive.
2) Oversea English Test preparation: I believe things have not slow down because nowadays more and more Chinese high school graduates go overseas for undergraduate education.
They also talked a bit on goverment regulation on “private education sector” and coming lock up expired period.
All right, New Oriental announced the fiscal 2007 Q2 report today. Here is the report. It seems they are doing well. Some highlights include 33% YoY reveneue growth (beat est. 20%). “The growth was mainly driven by the increase in the number of student enrollments in language training and test preparation courses.”
I imagine people just can not get enough English classes (spoken English, business English, kids English), and all kind of testings (IT, law, graduate school admission, in addition to traditional TOEFL/GRE/ACT/SAT).
I mean not just my Heelys shoes, but also the HLYS stocks I bought at the its IPO. I borrowed this title from Rick Munarriz at fool.com, here is his article. In summary, here are what he said:
1) Heelys is going to have a blow out fourth quarter.
2) They may guide a little higher for Q1 2007, and beat it eventually. From my observation some Sports Authority stores are low on inventory. Note Q1 is usually the slowest season for Heelys.
3) Expand into other products, helmet, T-shirts, caps, etc.
I listened to some sessions the Ninth Annual Integrated Corporate Relations (ICR) yesterday and today. This is a series of company presentations to the investing community usually attended by financial analysts. I listened the web cast through this link (they put achive there too). I noticed this event from Yahoo Finance (CROX).
Besides learning more brands (apparel, footwear and restaurant), I also learned more about how business grows. Most participating companies are young, growing companies. By the way, those kind of investor conference call and company quarterly earning calls are excellent oppertunities to learn what’s going with a company. We can not do “store checking” for every company like I did with Heelys and Crocs 🙂
I heard about the “angel investor” term a while ago, but I have not thought seriously about their profiles, their networth, etc. This is until recently I thought about doing this myself, I mean providing seed money for some Internet startup in China.
I think in general angel investors are rich people 🙂 As a minimum they should come up with 10,000 to 100,000 (USD? CNY?) to get a company started. My favorite “angel investor” story is when the two Google guys got started, one Sunday morning they went to the home of Sun Microsystems cofounder. The Sun guy listened to their pitch for a few minutes, liked the idea, but he needed to go to church. So he gave them a $200,000 check. We all know the rest is the history.
I was on shopping spree on stocks lately. Since I bought the Panera Bread (PNRA) last Friday, this Monday I bought some Telestone (TSTC), a Chinese wireless equipment maker; on Tuesday I bought some Ninetowns (NINE), a China based software company not new to me because I lost money on it in the past 🙁
These are two speculative plays. Telestone recently moved from Amex to Nasdaq, and it is posed to benifit from the 3G services adoption and Olympics in China. Ninetowns’ software business is stablizing after one year and half’s transition period; it also is building up B2B services through tootoo.com and globalmarkets aquisition.
I only took a small position on these two as they are a bit speculative right now. As you may see from their stock prices (about $9 for TSTC, and about $5 for NINE). I am going to hold them for longer time. I was reading Philip Fisher’s “Uncommon Profits in Common Stocks”, one thing amazed me is Phil will hold a stock as long as its fundamentals are good. I guess great investors like Buffett and Fisher all have great patience 🙂
on 8 am ET Jan 16. Here is link to web conference. And the dial in instruction can be seen here.
I don’t have any EDU shares.
That’s from Andy Xie, former chief economist for Morgan Stanley (Asia), here is the link. The article is in Chinese. Basically he is saying the high PE ratio of Chinese domestic stocks can not be justified by the growth of economy. The profitability of company and the prosperity of economy are two separate things. Among the factors pushing up the stocks prices, he mentioned the growth of mutual fund industry and the slow housing market.