stlplaceHMIN looked cheap these days, should we jump in and buy it? I have both MR and HMIN, and as a matter of fact, I bought some more HMIN after its disappointing earning report. My mistake. You may think because HMIN has been to $49, and now it’s trading $29.50, isn’t a big discount? Yes or No. I hope HMIN won’t go much lower because it is my largest holding now (I’m looking for opportunities to exit).
This is the report. From the Conference call, it appears they made a mistake on the announcement, I believe there was a typo on the first bullet (should be 40% rather than 24.7% YoY if exclude the large bid in 2006)
My comments on the results:
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.
Mindray, the leading medical device maker in Shenzhen, is hiring. Here is the link in Chinese. Most are R&D positions. And some campus recruiting events. Interestingly, I noticed they are looking for Spanish, Portuguese, German and Russian speaking sales person, as shown in this ad. From this and previous company’s SEC filings we can see the company still depends European (or South America) for the international growth. As you may know obtaining US regulatory approval for their product is a long process, although everyone knows this is the biggest piece of the pie.
It appears that Mindray started new offering today. I read its SEC filings here. The insiders will sell 9,827,220 shares and the underwriter will have option to buy additional 1,474,083 shares from selling share holders. That alone won’t have dilution effect.
Separately, the company filed S1 form for stock options registration. That will dilute the stocks if option being excercised.
One thing I am not 100% sure is the difference between secondary offering and insider selling after lock up period (usually 180 days after IPO). I think this one belong to “secondary” because it’s not 180 days after its IPO yet (Sept 26, 2006).
(Update 01Feb07) FinanceAsia has more details about this selling.
(Update 12-14-2023) Came across this issue again when doing some research on the Hashicorp stock ($HCP).
I assume cofounder Mitchell Hashimoto has a shell company and didn’t use his own name for the shares he traded. I didn’t dig into it: it’s not something that I feel it’s productive for me to do. A while ago though, I did think about learn the Go lang and see if I can be one of the 1st 200/300 employees at Hashicorp (thinking the stocks pre-IPO). It didn’t materialize 🙂 Btw, I just learned Mitchell is leaving Hashicorp.
Again I feel we should not worry about insiders selling stocks? In most cases we don’t need to do, as the insiders would like to to cash out for their life style or charity, note Bill Gates, if he didn’t sell, he would be a trillionaire? Just look at Steve Baller’s $MSFT stock.
Happy Microsoft $MSFT Dividend Day to all who celebrate
Shareholders received a quarterly dividend of $0.75 for each share that they own
Steve Ballmer, the former CEO of Microsoft received a dividend check for $249,939,742.50
He's on track to make $1 Billon in annual dividends pic.twitter.com/eJ3P6oskjS
— Dividend Growth Investor (@DividendGrowth) December 14, 2023
(Original 2007) Not too much. From time to time, the insiders of the company, a.k.a, the founders, the senior management, or even the venture capital, decided to sell their stocks in the public market. As ordinary investors I used to be worried about those kinds of events. Until I read Peter Lynch’s book One Up On Wall Street
Last Friday New Oriental revealed that its CEO Yu Minghong and another director will sell a large amount of stocks. It’s no surprise the market reacted negatively. But I am not worried. I bought some more EDU stocks instead. At 33.00 (note its fiscal 2007 first 6 months earning $0.68, and its first quarter is the strongest traditionally), I believe it’s fair priced.
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.
Home Inns (HMIN) and Mindray (MR) both reported their Q3 earning last week. I listened to both the conference calls. HMIN obviously did better with revenue growth: RMB 160.4 m, 106.3% year over year growth. Mindray’s revenue growth was 21.6% because of the anti-corruption campaign in Chinese hospitals. I think that growth factor determined the stock PE ratio at this time, HMIN is 162, MR is 51.
Personally I think one quarter’s number could be misleading. So let’s look at the first 9 months number. Mindray revenue growth is 41.4%; Home Inns is 125% (from RMB 176 m to RMB 396 m). So once again HMIN is the winner here. The reason again is HMIN is growing like crazy these days. They opened 25 new hotels in Q3 and have 56 hotels in development. But I still have some doubts in its growth.
1) Home Inns room rate RMB 180 is not expensive in China coastal area (where it got started), it could be a bit expensive in central and western part of the China, when we consider the wage difference here.
2) Competition: it’s heating up. Besides Jinjiang Star, Motel 168, Super 8, Home Inns’s founder Ji Qi started another chain called Hanting, which is slightly expensive than Rujia (Home Inns), and targeted business travellers.
So the question is: will HMIN’s growth be sustained for a while? My bet is their brand will help them grow for a while, but like anything else in business, nothing can grow 100% forever 🙂
OK, enough about the Home Inns (HMIN) and New Oriental (EDU), both of which are well known consumer brands based in Shanghai and Beijing respectively. On Sept 26, a not so well known medical device company based in Shenzhen (by Hongkong), did IPO on NYSE and it was well received by the investors. The company is Mindray Medical International, ticker symbol MR. It’s not the first Chinese medical device maker listed in the US. China Medical (CMED) came to NASDAQ about a year and half ago. But this MR is much bigger. I looked at its F-1 form, and it seems like a solid company.
Some key numbers: