In this good week, China suddenly announced a big cut in interest rate 108 basis points a very very big stimulate action and will offer a around RMB 20 billions compensation premium to China Power stations companies in order to support/help their poor financial situation.
This big cut in interest rate is very positive to such high debt ratio power stocks and in line with the recent big drop in coal price ,both are positive to Power stocks performance. So we can see 991 Datang Power rised 35% in this week, emotion to such power stocks is a bit overbuying. Mr Market was very high and happy in these days.
In past years,China Power companies cannot increase the electricity price because of China's anti-inflation policy which narrow down Power companies profit, and plus flying high coal price bad situation it also affected the stock performance negatively . We can see stock price of 991 Datang drop from 52 weeks highest point HKD 7.43 to recent lowest point HKD 2.15 (in end of oct 2008) that is 0.86 of book value.
I think in recent, 1/China's decreasing interest rate trend, 2/decreasing coal price and 3/continuous domestic consumer stimulate packages ( china want to keep GDP +8%) are very positive to Datang Power 991.
However in this week, 991 Datang Power already rised 35% which is alomost 1.5 times of her book value, therefore we need take care on this stock price situation and consider the speculators money and ask yourself to judge correctly whether it is over-vaule or not? Will money continue move into this section or just a short term hot? ask your self!!!!!!
Belows are some data of 991 Datang Power (991 is the HK stock market list no.)
* Today (11/28)stock price HKD 3.68 per share
* Cash per share HKD 1.60 (43% of sp)
* Current ratio : 0.36x ( very poor)
* Book value: HKD 2.50
* long term debt ratio: 193% (very high, all power stocks get this poor data)
Therefore , can we use HKD 2.50 book value as a guide line for 991 Datang power investment ? question your self please !!!!!!
Good luck !
Ricky
Saturday, November 29, 2008
Saturday, November 22, 2008
Stupid or intelligent investor? 981 SMIC
Recently, China is going to release the 3G mobile services and many companies are planning to get involve there.
In last week, SMIC (HK stock no. 981) announced that China company Datang telecom confirmed to invest USD 172 millions into SMIC as the biggest investor of SMIC,stock price buy at HKD 0.36 . we can think about that is it a good decision for Datang Telecom? and to SMIC ,is it a good decision to get this new investor?
For industry point of view, Semiconductor industry will face a tough business environment in coming days as worldwide economy is negative, we need to take care of this type of stocks. Current stock price of SMIC may indicate such poor outlook and SMIC stock price only 1/6 of her book value, worth to buy?
For management , Datang telecom will send 2 seniors into SMIC board of directors , so i think due to past bad performance of SMIC, new people will change somethings in business direction, at least same as Obama slogan " changes has come to America", will "Changes" come to SMIC ? probability is high I think.!
For marketing and biz consideration, after new injection, SMIC will co-operate with Datang telecom to co-develop China 3G TD-SCDMA, Datang supply 3G infrastructure, SMIC supply 3G chips , and SMIC will get many orders from Datang telecom because Datang telecom already confirmed become the No.1 biggest equipments vendor for China mobile's (HK stock no.941) 3G new project in CHina. This will affect SMIC business performance positively.
After new money injected into SMIC , new SMIC's book value is around HKD 1.00, Cash value is HKD 0.23,Net current assets is HKD 0.10-
and yesterday's Stock price closed at HKD 0.152 and remember Datang buy price is HKD 0.36 for the new investment.
So, Datang is a stupid investor or an Intelligent investor? i think the answer is obvious!
In last week, SMIC (HK stock no. 981) announced that China company Datang telecom confirmed to invest USD 172 millions into SMIC as the biggest investor of SMIC,stock price buy at HKD 0.36 . we can think about that is it a good decision for Datang Telecom? and to SMIC ,is it a good decision to get this new investor?
For industry point of view, Semiconductor industry will face a tough business environment in coming days as worldwide economy is negative, we need to take care of this type of stocks. Current stock price of SMIC may indicate such poor outlook and SMIC stock price only 1/6 of her book value, worth to buy?
For management , Datang telecom will send 2 seniors into SMIC board of directors , so i think due to past bad performance of SMIC, new people will change somethings in business direction, at least same as Obama slogan " changes has come to America", will "Changes" come to SMIC ? probability is high I think.!
For marketing and biz consideration, after new injection, SMIC will co-operate with Datang telecom to co-develop China 3G TD-SCDMA, Datang supply 3G infrastructure, SMIC supply 3G chips , and SMIC will get many orders from Datang telecom because Datang telecom already confirmed become the No.1 biggest equipments vendor for China mobile's (HK stock no.941) 3G new project in CHina. This will affect SMIC business performance positively.
After new money injected into SMIC , new SMIC's book value is around HKD 1.00, Cash value is HKD 0.23,Net current assets is HKD 0.10-
and yesterday's Stock price closed at HKD 0.152 and remember Datang buy price is HKD 0.36 for the new investment.
So, Datang is a stupid investor or an Intelligent investor? i think the answer is obvious!
Saturday, November 15, 2008
Data for those undervalued stock for Reference!! really worth to buy??
Data for my list today, pls see and consider them ,give me good comments for those HK stocks
*company *today stock price HKD *Book value HKD *2007 PE x
981 0.167 1.248 N/A
991 2.85 2.52 9.1x
386 4.58 3.55 6.6x
2388 8.53 8.78 5.8x
2328 2.58 2.34 9x
2333 2.88 5.88 3x
410 2.53 2.76 5x
658 6 2.5 19.6x
2006 0.82 1.84 9.1x
3368 5.99 5 23x
*company *today stock price HKD *Book value HKD *2007 PE x
981 0.167 1.248 N/A
991 2.85 2.52 9.1x
386 4.58 3.55 6.6x
2388 8.53 8.78 5.8x
2328 2.58 2.34 9x
2333 2.88 5.88 3x
410 2.53 2.76 5x
658 6 2.5 19.6x
2006 0.82 1.84 9.1x
3368 5.99 5 23x
A list of undervalued stock in HK stock market, GOOD to buy???
Here is a list of company that i think we can think about investment, thinking consideration are 1/ industry outlook, 2/ marketing, 3/ management, 4/ Financial data, 5/ price vs value
a list of company I can discuss with you.
Hong Kong Stock No.**
981
991
386
2388
2328
2333
410
658
2006
3368
Sincerely
Ricky
a list of company I can discuss with you.
Hong Kong Stock No.**
981
991
386
2388
2328
2333
410
658
2006
3368
Sincerely
Ricky
Saturday, January 26, 2008
George Soros -The worst market crisis in 60 years
George Soros
The worst market crisis in 60 years
By George Soros --- Published: January 23 2008
The current financial crisis was precipitated by a bubble in the US housing market. In some ways it resembles other crises that have occurred since the end of the second world war at intervals ranging from four to 10 years.
However, there is a profound difference: the current crisis marks the end of an era of credit expansion based on the dollar as the international reserve currency. The periodic crises were part of a larger boom-bust process. The current crisis is the culmination of a super-boom that has lasted for more than 60 years.
Boom-bust processes usually revolve around credit and always involve a bias or misconception. This is usually a failure to recognise a reflexive, circular connection between the willingness to lend and the value of the collateral. Ease of credit generates demand that pushes up the value of property, which in turn increases the amount of credit available. A bubble starts when people buy houses in the expectation that they can refinance their mortgages at a profit. The recent US housing boom is a case in point. The 60-year super-boom is a more complicated case.
Every time the credit expansion ran into trouble the financial authorities intervened, injecting liquidity and finding other ways to stimulate the economy. That created a system of asymmetric incentives also known as moral hazard, which encouraged ever greater credit expansion. The system was so successful that people came to believe in what former US president Ronald Reagan called the magic of the marketplace and I call market fundamentalism. Fundamentalists believe that markets tend towards equilibrium and the common interest is best served by allowing participants to pursue their self-interest. It is an obvious misconception, because it was the intervention of the authorities that prevented financial markets from breaking down, not the markets themselves. Nevertheless, market fundamentalism emerged as the dominant ideology in the 1980s, when financial markets started to become globalised and the US started to run a current account deficit.
Globalisation allowed the US to suck up the savings of the rest of the world and consume more than it produced. The US current account deficit reached 6.2 per cent of gross national product in 2006. The financial markets encouraged consumers to borrow by introducing ever more sophisticated instruments and more generous terms. The authorities aided and abetted the process by intervening whenever the global financial system was at risk. Since 1980, regulations have been progressively relaxed until they have practically disappeared.
The super-boom got out of hand when the new products became so complicated that the authorities could no longer calculate the risks and started relying on the risk management methods of the banks themselves. Similarly, the rating agencies relied on the information provided by the originators of synthetic products. It was a shocking abdication of responsibility.
Everything that could go wrong did. What started with subprime mortgages spread to all collateralised debt obligations, endangered municipal and mortgage insurance and reinsurance companies and threatened to unravel the multi-trillion-dollar credit default swap market. Investment banks' commitments to leveraged buyouts became liabilities. Market-neutral hedge funds turned out not to be market-neutral and had to be unwound. The asset-backed commercial paper market came to a standstill and the special investment vehicles set up by banks to get mortgages off their balance sheets could no longer get outside financing. The final blow came when interbank lending, which is at the heart of the financial system, was disrupted because banks had to husband their resources and could not trust their counterparties. The central banks had to inject an unprecedented amount of money and extend credit on an unprecedented range of securities to a broader range of institutions than ever befor e. That made the crisis more severe than any since the second world war.
Credit expansion must now be followed by a period of contraction, because some of the new credit instruments and practices are unsound and unsustainable. The ability of the financial authorities to stimulate the economy is constrained by the unwillingness of the rest of the world to accumulate additional dollar reserves. Until recently, investors were hoping that the US Federal Reserve would do whatever it takes to avoid a recession, because that is what it did on previous occasions. Now they will have to realise that the Fed may no longer be in a position to do so. With oil, food and other commodities firm, and the renminbi appreciating somewhat faster, the Fed also has to worry about inflation. If federal funds were lowered beyond a certain point, the dollar would come under renewed pressure and long-term bonds would actually go up in yield. Where that point is, is impossible to determine. When it is reached, the ability of the Fed to stimulate the economy comes to an en d.
Although a recession in the developed world is now more or less inevitable, China, India and some of the oil-producing countries are in a very strong countertrend. So, the current financial crisis is less likely to cause a global recession than a radical realignment of the global economy, with a relative decline of the US and the rise of China and other countries in the developing world.
The danger is that the resulting political tensions, including US protectionism, may disrupt the global economy and plunge the world into recession or worse.
The writer is chairman of Soros Fund Management
The Financial Times Article
The worst market crisis in 60 years
By George Soros --- Published: January 23 2008
The current financial crisis was precipitated by a bubble in the US housing market. In some ways it resembles other crises that have occurred since the end of the second world war at intervals ranging from four to 10 years.
However, there is a profound difference: the current crisis marks the end of an era of credit expansion based on the dollar as the international reserve currency. The periodic crises were part of a larger boom-bust process. The current crisis is the culmination of a super-boom that has lasted for more than 60 years.
Boom-bust processes usually revolve around credit and always involve a bias or misconception. This is usually a failure to recognise a reflexive, circular connection between the willingness to lend and the value of the collateral. Ease of credit generates demand that pushes up the value of property, which in turn increases the amount of credit available. A bubble starts when people buy houses in the expectation that they can refinance their mortgages at a profit. The recent US housing boom is a case in point. The 60-year super-boom is a more complicated case.
Every time the credit expansion ran into trouble the financial authorities intervened, injecting liquidity and finding other ways to stimulate the economy. That created a system of asymmetric incentives also known as moral hazard, which encouraged ever greater credit expansion. The system was so successful that people came to believe in what former US president Ronald Reagan called the magic of the marketplace and I call market fundamentalism. Fundamentalists believe that markets tend towards equilibrium and the common interest is best served by allowing participants to pursue their self-interest. It is an obvious misconception, because it was the intervention of the authorities that prevented financial markets from breaking down, not the markets themselves. Nevertheless, market fundamentalism emerged as the dominant ideology in the 1980s, when financial markets started to become globalised and the US started to run a current account deficit.
Globalisation allowed the US to suck up the savings of the rest of the world and consume more than it produced. The US current account deficit reached 6.2 per cent of gross national product in 2006. The financial markets encouraged consumers to borrow by introducing ever more sophisticated instruments and more generous terms. The authorities aided and abetted the process by intervening whenever the global financial system was at risk. Since 1980, regulations have been progressively relaxed until they have practically disappeared.
The super-boom got out of hand when the new products became so complicated that the authorities could no longer calculate the risks and started relying on the risk management methods of the banks themselves. Similarly, the rating agencies relied on the information provided by the originators of synthetic products. It was a shocking abdication of responsibility.
Everything that could go wrong did. What started with subprime mortgages spread to all collateralised debt obligations, endangered municipal and mortgage insurance and reinsurance companies and threatened to unravel the multi-trillion-dollar credit default swap market. Investment banks' commitments to leveraged buyouts became liabilities. Market-neutral hedge funds turned out not to be market-neutral and had to be unwound. The asset-backed commercial paper market came to a standstill and the special investment vehicles set up by banks to get mortgages off their balance sheets could no longer get outside financing. The final blow came when interbank lending, which is at the heart of the financial system, was disrupted because banks had to husband their resources and could not trust their counterparties. The central banks had to inject an unprecedented amount of money and extend credit on an unprecedented range of securities to a broader range of institutions than ever befor e. That made the crisis more severe than any since the second world war.
Credit expansion must now be followed by a period of contraction, because some of the new credit instruments and practices are unsound and unsustainable. The ability of the financial authorities to stimulate the economy is constrained by the unwillingness of the rest of the world to accumulate additional dollar reserves. Until recently, investors were hoping that the US Federal Reserve would do whatever it takes to avoid a recession, because that is what it did on previous occasions. Now they will have to realise that the Fed may no longer be in a position to do so. With oil, food and other commodities firm, and the renminbi appreciating somewhat faster, the Fed also has to worry about inflation. If federal funds were lowered beyond a certain point, the dollar would come under renewed pressure and long-term bonds would actually go up in yield. Where that point is, is impossible to determine. When it is reached, the ability of the Fed to stimulate the economy comes to an en d.
Although a recession in the developed world is now more or less inevitable, China, India and some of the oil-producing countries are in a very strong countertrend. So, the current financial crisis is less likely to cause a global recession than a radical realignment of the global economy, with a relative decline of the US and the rise of China and other countries in the developing world.
The danger is that the resulting political tensions, including US protectionism, may disrupt the global economy and plunge the world into recession or worse.
The writer is chairman of Soros Fund Management
The Financial Times Article
Subscribe to:
Posts (Atom)