Categories
Shanghai Composite

Turning point or new beginning: why the drop?

Reading Time: 2 minutes

The Shanghai composites index hit a new YTD low last night (US time), with the help from PetroChina (PTR, 601857.SS) nearly 9% loss. Note PTR has 20% weight on the Shanghai index. Fundamentally, the Chinese public companies will have tough comparison this year. Last year with the effect of new accounting method (does this sounds familar, hint, Enron) last year, and a bull market, the companies were able to book record profit (unrealized investment gains). This year, with the recent stock market drop, if companies have not ring the register on the stocks, the unrealized investment gain will be unrealzied loss.

Back to Zhu Ping’s 拐点还是新起点. Why the drop?

Continue reading “Turning point or new beginning: why the drop?”
Categories
gadgets

Why China Mobile CHL is a buy: III

Reading Time: 2 minutes

There were some big news in the US wireless arena last week. Verizon and AT&T won the auction of some new wireless spectrum, Google did not win the spectrum (see the details at NYTimes). Do you know how much Verizon paid for the new spectrum? $9.6 billion. Imagine a similar scenario in China, how much does the 3G license cost in China? As far as China Mobile (and China Unicom and Telecom) is concerned, it’s null, zero, no cost.

What? You must think this is crazy. How come the goverment gives away the license for free? Well, the No. 1 reason is the goverment is the biggest shareholder of all those big wireless/telecom companies. If they charge a big fee, essentially they are putting money from left pocket to right pocket. So why bother.

Moat analysis
What does CHL got?

Wang Jian Zhou pic
(CEO Wang Jian Zhou at annual report, from iphonebuzz.com)

1) A top 10 Chinese global brand, which consists of 3 sub brands: GoTone/quan qiu tong (white collars), shen zhou xing (everyone) and dong gan di dai (mobile internet), quote in Chinese:

Continue reading “Why China Mobile CHL is a buy: III”
Categories
Shanghai Composite

Turning point or new beginning: valuation

Reading Time: 2 minutes

Zhu Ping (朱平) is the chief investment officer (投资总监) of Guang Fa fund(广发基金), I have a lot of respect for him not because he went to the same graduate school I went (Shanghai Univ. of Finance and Economics); but rather he is an independent thinker, has a good track record managing the funds, has a good sense of value investing. For me the most important of all, I can learn things from him 🙂

The China stock market expericed a major correction lately, after huge run in last two years. There are many dis-heartening stuffs, such as the selling from major institutions, and the proposed huge secondary offerings from Ping’an insurance, and Pu Fa (Pudong dev bank). Recently Zhu Ping wrote about his view on the China market, economy and investing, the title is “拐点还是新起点“(turning point or new beginning). I read it and decided to translate portions into English (in series). He talked about the things in general in bullet one. I will start from bullet 2, “valuation”.

Continue reading “Turning point or new beginning: valuation”
Categories
China

Top 10 Chinese global brands

Reading Time: < 1 minute

Financial Times did a Top 10 Chinese global brands survey recently. And here are the winners. Did you notice anything interesting?

I noticed BoC, Air China, China Mobile, China Telecom, Sinopec, CCB are state owned (majority owned); while Lenovo, Tsingtao beer, Haier and Baidu are public companies. I am a little puzzeled why ICBC and PetroChina did not make it to the list; and I was NOT surprised Baidu tops Sina, Sohu and Netease.

By the way, many of the top 10 brands are Beijing Olympics sponsor, such as BoC, Air China, China Mobile and Lenovo. If you watch NBA on TV, you will see Lenovo and Haier ad. from time to time.

top 10 Chinese global brands
(Full size pic is here).

Categories
gadgets

Why China Mobile CHL is a buy: II

Reading Time: 3 minutes

As you may aware, terrible things happened in Lasha (China) a few days ago. It is reported 5 young girls who worked for an apparel shop were killed in the riot (in this particular case, arson set by the thugs). I noticed the last text message one of the girl sent to her father is: Don’t worry about me, dad. 最后一条短信：”不要担心我”. I certainly wish things would turn out differently for the girls. But on the bright side, I think her family at least got some pieces of their girl’s last moment. This reminds me of a related event. On September 11, 2001, some people who buried under world trader center tried to call their family members, or text messaging, and some got saved that way. I’m sure you have heard similar stories about cell phone saving people’s lives too.

So what’s my point? We are increasingly living in a mobile world nowadays. From business point of view, the enablers of this technology can make a fair share of profit, while providing reliable service to the consumers (hopefully mostly for entertainment, not life or death situation).

China Mobile pic

Year 2007 result
China Mobile (CHL) released its year 2007 results on March 19 (PDF file here). Here are the highlights:

Continue reading “Why China Mobile CHL is a buy: II”
Categories
China IPO

Alibaba update

Reading Time: 2 minutes

It was a short while ago (last Nov) Alibaba did its high profile IPO in Hongkong. Now it’s back in the news again. Don’t get me wrong, Jack Ma (Ma Yun), the founder and Chairman of Ali, was always in the news. I remember a few years ago (when the company was private) he said Ali pays 1 millions Yuan everyday, that’s not a small number and people thought Mr. Ma was bragging. Oh, well, bragging or not. Alibaba’s IPO was very successful, and it created a few hundred millionares (stock option holders) in its employee bases, from what I read last Oct.

Fast forward to March 2008. It reported a good quarter but stock continued to drop (see Sramana Mitra at Seekingalpha). And there is a rumor about class action lawsuit coming (news in Chinese).

Alibaba 1688 stock chart
(Alibaba 1688.HK 6 month stock chart, full size pic here).

Continue reading “Alibaba update”
Categories
401k and Personal Finance Life

Vested in Amerca

Reading Time: 2 minutes

Yesterday was a quite amazing day for stock market. The US market (Dow, S&P, and Nasdaq) went up the most in 5 years, after the dear friend of Wall Street (Mr. Ben Bernanke) cut the interest rate by 0.75%. Here are details in the news (Dow 416 points gain, Fed rate cut sends market soaring). This means the interest rate lowered from 5.25% to 2.25% since last Sept. That’s 300 basis points in 6 months!. While I was happy to see my little portfolio went up 4.8% yesterday, I think the US dollar will worth less and less (vs. Yuan), considering the reckless US economy policy and the fundamental problems underlining the economy (high labor cost, addition to consumer spending, etc.).

Fed rate cut 031808
(Source: Kansas City Star)

Green Card
Incidently (remember March 17 is St. Patrick’s day, the green), yesterday I received an email from USCIS telling me that my permanent residency application has been approved (after almost 6 years). I don’t think too much of this green card thing, at least that’s what I felt when I went to work this morning (see I still got to work).

Continue reading “Vested in Amerca”
Categories
gadgets

iPhone deal, iPhone flip rumor

Reading Time: < 1 minute

I found AT&T offers iPhone 8GB refurb for $249. Here is the link. As of now the regular iPhone 8GB is $399 at Apple or AT&T store. I think one has to sign up the AT&T data plan to use some of the web features of iPhone. I could be wrong.

Also, I found this iPhone flip version rumor interesting (source: Sina). I understand the US consumers have a special love for flip phones. I personally switched to the SamSung A437 flip phone lately.

iPhone flip rumor

Continue reading “iPhone deal, iPhone flip rumor”
Categories
Economy

De-leveraging, moral hazard, friends and recession

Reading Time: 2 minutes

I heard a lot of buzz words in this Bear Stearns crisis, $100 oil, Spitzer scandal, global housing bust…world. Just list some new words I found interesting:

De-leveraging
This one is easy for me (because I don’t have much to leverage on). I was a little astonished by the leverage ratio of investment banks such as Goldman Sachs (see the GS balance sheet here) and Bear Stears. As of Nov 2007, Bear Stears has (in thousand dollars)

Total Liabilities 383,569,000
Total Stockholder Equity 11,793,000 (Net Tangible Assets $11,793,000)

Debt/Equity ratio is 32.5, in other words, they control $32.5 of asset while they have $1 to back it up. If they lose 3% in their assets (due to investment loss), all their equities are gone. Because Bear is heavily invested in mortgage back securities (MBS) and MBS pretty much went to trash can lately, I think a 3% loss is easy to achieve. (Therefore the bailout and fire sale of Bear in the weekend).

Continue reading “De-leveraging, moral hazard, friends and recession”
Categories
Business

Swap Mindray for Syngenta

Reading Time: 2 minutes

I sold some Mindray stocks (MR) last Friday and today, and I bought some Syngenta (SYT), the European agriculture company. I think it is a more reasonably valued stock (compared to my across street neighbour Monsanto), in this ag (soft commodity) boom. The thing I want to make sure is it does not bust very soon.

Syngenta field logo

The reasons why I sold Mindray:

1) Before and after it announced the acquisition of DataScope patient monitor business, the stock price dropped quite a bit (note this is quite normal in acquisition);

Continue reading “Swap Mindray for Syngenta”