China cut the interest rate and 991 Datang Power Situation rised 35% in this week

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

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!

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

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