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China Stocks

Second Look at Huiyuan Juice IPO

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I noticed this juice thing is getting popular in China, just like the coffee did in recent years. In summer 2004, when I attended a bunch of formal dinners in Ningbo, juice is an option, as is the wine. Juice is also offered in the airplane. One thing I noticed that the orange juice in China is mostly “from concentrated”, probablly due to cost and taste reasons. So the demand and the growth is there. The problem with the company, from I read from FinanceAsia:

“Among the potential concerns, observers say, is the cost of buying juice concentrates and fruit puree, which increased by more than 50% in the first nine months last year. The company buys about 56% of this raw material from abroad, making it vulnerable to swings in international prices, particularly for oranges.”