- Why don’t we get on this bus?
- Something is wrong. Let’s wait for the next one.
Investors' confidence
This could be the bus of China Mediaexpress Holdings (CCME)
Saturday, July 31, 2010
The bus of China MediaExpress Holdings (CCME)
- Why don’t we get on this bus?
- Something is wrong. Let’s wait for the next one.
Investors' confidence
This could be the bus of China Mediaexpress Holdings (CCME)
China, China and China
I was reading some posts today on several websites and one I wanted to share with you. In the U.S. but also in Europe the financial media reports a lot about China and Chinese business. Also in my country (The Netherlands) and even in my province (Limburg) they are mentioning it.
For a lot of us who are familiar with Chinese stocks the message below says everything.
Pardon my investment stupidity -
Yes, China, China, China on the tube. But until we see an hour or two a day on TV on CNBC, Bloomberg, and Fox Business, dedicated to China, US investors won't get serious. Yes, yes, I know. All the information is out there now or we wouldn't being investing in them now. And that's good for us, but it is the overall perception that Chinese companies are not real and investors need to see people talking about selected ones as to what they do and how they are growing. I hate to suggest it, but something like Mad Money for China stocks, but of course not with Cramer. I'm sure that many don't even know that many Chinese companies are registered on US exchanges. And I'm also sure investors are anxious to invest in China because they realize where the growth lies. And also sure you would have a hard time finding an investment advisor that could or would recommend a China stock. Warren got the message but that is not enough.
This is not only in the U.S. the case, a lot of European investors invest in their boring own companies which they can folow in their local newspaper and are familiar with.
In the Netherlands we have a proverb "Wat de boer niet kent dat vreet hij niet" it would be something like ""where ignorance is bliss, 'tis folly to be wise"
What a boring (investment)life!
For a lot of us who are familiar with Chinese stocks the message below says everything.
Pardon my investment stupidity -
Yes, China, China, China on the tube. But until we see an hour or two a day on TV on CNBC, Bloomberg, and Fox Business, dedicated to China, US investors won't get serious. Yes, yes, I know. All the information is out there now or we wouldn't being investing in them now. And that's good for us, but it is the overall perception that Chinese companies are not real and investors need to see people talking about selected ones as to what they do and how they are growing. I hate to suggest it, but something like Mad Money for China stocks, but of course not with Cramer. I'm sure that many don't even know that many Chinese companies are registered on US exchanges. And I'm also sure investors are anxious to invest in China because they realize where the growth lies. And also sure you would have a hard time finding an investment advisor that could or would recommend a China stock. Warren got the message but that is not enough.
This is not only in the U.S. the case, a lot of European investors invest in their boring own companies which they can folow in their local newspaper and are familiar with.
In the Netherlands we have a proverb "Wat de boer niet kent dat vreet hij niet" it would be something like ""where ignorance is bliss, 'tis folly to be wise"
What a boring (investment)life!
Friday, July 30, 2010
Profiting from the World’s Economic Crisis
As an author for Seeking Alpha you have the choice to review books. I just finished the book "Profiting from the World’s Economic Crisis, finding investment opportunities by tracking global market trends" by Bud Conrad.
The book is a must read for everyone who wants a clear understanding why the economic collapse could happen and happened and why it is far from over. Major problems we are dealing with now are federal budget deficit, trade deficit and health care. This will ultimately lead to the collapse of the dollar. Everything backed up with fantastic graphics and analyses.
The main question for the future is: Who will buy our government debt?
Dollar weakness is the central theme of the book and investing directly against the dollar can be done in many ways. Bud Conrad, gives opportunities that do not require investments in other currencies. The trade of the decade is going to be interest rates, but there are more alternatives.
Conrad gives gold the capstone position is his book, because gold was the original base of our monetary system, and it’s playing a role in the evolution going forward.
Yesterday I finished the book and I bought some gold stocks to diversify my portfolio which contains of course of a lot of Chinese stocks. I had done already some research on the companies I had on mind and I came to the conclusion that the following junior miners could be an interesting play for the coming years : Northgate Minerals Corp. (NXG) and Brigus Gold (BRD) both traded on the AMEX and Globestar Mining Corp. (GMI) listed on the Toronto Stock Exchange.
In one word a GOLDEN book!
POSITION: LONG NXG, BRD, GMI.TO
The book is a must read for everyone who wants a clear understanding why the economic collapse could happen and happened and why it is far from over. Major problems we are dealing with now are federal budget deficit, trade deficit and health care. This will ultimately lead to the collapse of the dollar. Everything backed up with fantastic graphics and analyses.
The main question for the future is: Who will buy our government debt?
Dollar weakness is the central theme of the book and investing directly against the dollar can be done in many ways. Bud Conrad, gives opportunities that do not require investments in other currencies. The trade of the decade is going to be interest rates, but there are more alternatives.
Conrad gives gold the capstone position is his book, because gold was the original base of our monetary system, and it’s playing a role in the evolution going forward.
Yesterday I finished the book and I bought some gold stocks to diversify my portfolio which contains of course of a lot of Chinese stocks. I had done already some research on the companies I had on mind and I came to the conclusion that the following junior miners could be an interesting play for the coming years : Northgate Minerals Corp. (NXG) and Brigus Gold (BRD) both traded on the AMEX and Globestar Mining Corp. (GMI) listed on the Toronto Stock Exchange.
In one word a GOLDEN book!
POSITION: LONG NXG, BRD, GMI.TO
Monday, July 26, 2010
China's pharmaceutical sector
The production value of China's pharmaceutical industry is projected to grow at an average annual rate of 22% from 2010 to 2019, according to a report issued by the Southern Medicine Economic Research Institute (SMERI).
The strong performance is attributed to the steady growth of China's economy, an aging population and increasing government investment in health care.
A key driver will be the Chinese government, which will spend a total of US$124.82 billion into health care reforms from 2009 to 2011.
However, there are challenges surrounding the Chinese pharmaceutical sector which include the slowdown of the global economy, uncertainties in export growth, instabilities and turbulences caused by the introduction of various new regulations and healthcare reform measures, looming amendments of government drug pricing policies, continuous financial pressures from hospital drug purchase tenders, and rising raw material and production costs.
Despite these issues, with continued robust market growth and active M&As, the pharmaceutical industry's future continues to be positive.
We all can profit from this trend by investing in solid Chinese companies listed in the U.S. that are still undervalued.
I selected 10 companies which have a score above 8. For the scores I used the website Trading China made by RamesLupin. This website developed a Score Card. For more information look at the website http://www.fixyou.co.uk/tracker_allstocks.php
Lotus Pharmaceuticals (LTUS)
Renhuang Pharmaceuticals (CBP)
Weikang Bio-Tech (WKBT)
Biostar Pharmaceuticals (BSPM)
China Biologic Products (CBPO)
China Jo-Jo Drugstores (CJJD)
China Kangtai Cactus (CKGT)
Huifeng Bio-Pharma (HFGB)
Nutrastar Int. (NUIN)
Tongli Pharmaceuticals (TGLP) This one doesn't have a score but could be a very interesting speculative play.
POSITION: LONG LTUS, CBP, WKBT
The strong performance is attributed to the steady growth of China's economy, an aging population and increasing government investment in health care.
A key driver will be the Chinese government, which will spend a total of US$124.82 billion into health care reforms from 2009 to 2011.
However, there are challenges surrounding the Chinese pharmaceutical sector which include the slowdown of the global economy, uncertainties in export growth, instabilities and turbulences caused by the introduction of various new regulations and healthcare reform measures, looming amendments of government drug pricing policies, continuous financial pressures from hospital drug purchase tenders, and rising raw material and production costs.
Despite these issues, with continued robust market growth and active M&As, the pharmaceutical industry's future continues to be positive.
We all can profit from this trend by investing in solid Chinese companies listed in the U.S. that are still undervalued.
I selected 10 companies which have a score above 8. For the scores I used the website Trading China made by RamesLupin. This website developed a Score Card. For more information look at the website http://www.fixyou.co.uk/tracker_allstocks.php
Lotus Pharmaceuticals (LTUS)
Renhuang Pharmaceuticals (CBP)
Weikang Bio-Tech (WKBT)
Biostar Pharmaceuticals (BSPM)
China Biologic Products (CBPO)
China Jo-Jo Drugstores (CJJD)
China Kangtai Cactus (CKGT)
Huifeng Bio-Pharma (HFGB)
Nutrastar Int. (NUIN)
Tongli Pharmaceuticals (TGLP) This one doesn't have a score but could be a very interesting speculative play.
POSITION: LONG LTUS, CBP, WKBT
Friday, July 23, 2010
Renhuang (CBP) receives AAA(1) rating from Chinese Academy of International Trade & Economic Cooperation of Ministry of Commerce
Our China Investor King's Portfolio company Renhuang Pharmaceuticals, Inc. (NYSE Amex: CBP), a developer, manufacturer and distributor of botanical products, bio-pharmaceuticals and traditional Chinese medicines ("TCM"), today announced that the company was recently awarded an AAA(1) rating by Chinese Academy of International Trade & Economic Cooperation of Ministry of Commerce ("the Academy").
The Academy's ratings are conferred only after an extensive review of an enterprise's financial condition and an AAA(1) mark represents the highest possible rating granted by the Academy. The appraisal process involves evaluation of bond management, corporate debt, contract execution, public records, financial status, and financing abilities of each enterprise and is conducted independently by the Academy. The AAA(1) rating certifies that the enterprise has outstanding performance in each of the above areas and is highly recognized by consumers and the government as practicing sound commercial practices.
"It is a great honor and a significant achievement to receive an AAA(1) rating from the Academy," said Mr. Shaoming Li, the Company's Chairman and Chief Executive Officer. "We are pleased that our improved governance measures and strong financial controls have been validated by the Academy's intensive appraisal process. We believe this will reinforce the investment community's confidence in our business and growth prospects as we continue to expand our national and international sales."
Clearly a positive note, now we hope that the pharmaceutical stocks will show some strength the coming months.
POSITION: LONG
The Academy's ratings are conferred only after an extensive review of an enterprise's financial condition and an AAA(1) mark represents the highest possible rating granted by the Academy. The appraisal process involves evaluation of bond management, corporate debt, contract execution, public records, financial status, and financing abilities of each enterprise and is conducted independently by the Academy. The AAA(1) rating certifies that the enterprise has outstanding performance in each of the above areas and is highly recognized by consumers and the government as practicing sound commercial practices.
"It is a great honor and a significant achievement to receive an AAA(1) rating from the Academy," said Mr. Shaoming Li, the Company's Chairman and Chief Executive Officer. "We are pleased that our improved governance measures and strong financial controls have been validated by the Academy's intensive appraisal process. We believe this will reinforce the investment community's confidence in our business and growth prospects as we continue to expand our national and international sales."
Clearly a positive note, now we hope that the pharmaceutical stocks will show some strength the coming months.
POSITION: LONG
Thursday, July 22, 2010
Lotus Pharmaceuticals (LTUS) terminates SEDA
Lotus Pharmaceuticals (LTUS) announced today that it has entered into a termination agreement with Yorkville Global Master SPV Ltd. ("Yorkville") whereby the parties agreed to mutually terminate the Standby Equity Distribution Agreement, dated March 3, 2010, between the company and Yorkville (the "SEDA") with no further obligations.
CEO, Dr. Zhongyi Liu, commented, "We appreciate the capital commitment from Yorkville, but we won't utilize the SEDA. The reason is that currently we have sufficient working capital and growth capital to carry out the construction and outfitting of our new building complex in Beijing, which is expected to open in 2010. We will consider alternative funding options and structures only when our stock valuation improves, in order to protect against stock dilution."
Lotus is a stock that is deeply undervalued, that is why it is in our China Investor King's Portfolio. The step they have taken we admire and will help them to increase shareholder's value. Maybe this can be the trigger for some price appreciation. Also we are optimistic that their cash flow is sufficient for the time being.
POSITION: LONG
For more information: http://www.lotuspharma.com/
CEO, Dr. Zhongyi Liu, commented, "We appreciate the capital commitment from Yorkville, but we won't utilize the SEDA. The reason is that currently we have sufficient working capital and growth capital to carry out the construction and outfitting of our new building complex in Beijing, which is expected to open in 2010. We will consider alternative funding options and structures only when our stock valuation improves, in order to protect against stock dilution."
Lotus is a stock that is deeply undervalued, that is why it is in our China Investor King's Portfolio. The step they have taken we admire and will help them to increase shareholder's value. Maybe this can be the trigger for some price appreciation. Also we are optimistic that their cash flow is sufficient for the time being.
POSITION: LONG
For more information: http://www.lotuspharma.com/
China’s real estate market has just start growing
In China, consumers buying residential properties are required to put down 30 percent before taking out a mortgage. For a second home, the down payment is 50 percent, irrespective of their net worth. Home purchase is predicated on affordability.
Today, there are some 360 million urban residents in China. In the next three decades, the figure is expected to grow to 970 million. What China is trying to achieve is unique in history – to create urban space to more than 610 million people, within a single generation.
In such an environment, periods of overheating will occasionally be accompanied by dramatic price increases. China’s urbanization rate is about 45 percent, whereas in Japan and other advanced countries it is more than 80 percent. As these nations reflect very different levels of economic development and different levels of individual prosperity, their real estate markets are different as well.
Despite its rapid pace of expansion, China’s real estate is still at a very preliminary stage. The marketplace is so colossal that there are no precedents, no simple models. Yet the prospects for a robust growth remain intact. The key will be not to allow that growth to become threatened by a property bubble – while providing affordable housing for the rapidly-expanding new middle-class.
A Chinese company that can profit from it is NYSE-listed Xinyuan Real Estate (XIN). The company is a developer of large scale, high quality residential real estate projects aimed at providing middle-income consumers with a comfortable and convenient community lifestyle. Xinyuan focuses on China's Tier II cities, characterized as larger, more developed urban areas with above average GDP and population growth rates. Xinyuan has expanded its network to cover a total population of over 44.7 million people in seven strategically selected Tier II cities, comprising Hefei, Jinan, Kunshan, Suzhou, Zhengzhou, Xuzhou and Chengdu.
The last analyst report dated from May 28, 2010 when the price was $ 3.19
Rodman & Renshaw Initiation Outperform $7.00
Xinyuan shares are currently trading near a discounted liquidation value (50% of its book value and 78.5% of its cash value), which we believe has largely reflected the bear market sentiment and policy headwind. We believe there should be clear differentiation between Xinyuan, which operates mostly in higher growth and less speculation-driven Tier II cities, and those developers that focus more on speculator-concentrated Tier I cities. With a solid balance sheet, sufficient liquidity, plenty of projects in the pipeline to support its growth through 2012, combined with an experienced and disciplined management team, we believe the company justifies a much higher valuation. Our $7 price target is based on the shares trading at 8x our expected 2011 non-GAAP EPADS of $0.92 and 1x our estimated BVPADS of $6.95, representing a slight discount to Xinyuan's Chinese real estate developer peers currently listed on U.S. and Hong Kong exchanges.
POSITION: LONG
Today, there are some 360 million urban residents in China. In the next three decades, the figure is expected to grow to 970 million. What China is trying to achieve is unique in history – to create urban space to more than 610 million people, within a single generation.
In such an environment, periods of overheating will occasionally be accompanied by dramatic price increases. China’s urbanization rate is about 45 percent, whereas in Japan and other advanced countries it is more than 80 percent. As these nations reflect very different levels of economic development and different levels of individual prosperity, their real estate markets are different as well.
Despite its rapid pace of expansion, China’s real estate is still at a very preliminary stage. The marketplace is so colossal that there are no precedents, no simple models. Yet the prospects for a robust growth remain intact. The key will be not to allow that growth to become threatened by a property bubble – while providing affordable housing for the rapidly-expanding new middle-class.
A Chinese company that can profit from it is NYSE-listed Xinyuan Real Estate (XIN). The company is a developer of large scale, high quality residential real estate projects aimed at providing middle-income consumers with a comfortable and convenient community lifestyle. Xinyuan focuses on China's Tier II cities, characterized as larger, more developed urban areas with above average GDP and population growth rates. Xinyuan has expanded its network to cover a total population of over 44.7 million people in seven strategically selected Tier II cities, comprising Hefei, Jinan, Kunshan, Suzhou, Zhengzhou, Xuzhou and Chengdu.
The last analyst report dated from May 28, 2010 when the price was $ 3.19
Rodman & Renshaw Initiation Outperform $7.00
Xinyuan shares are currently trading near a discounted liquidation value (50% of its book value and 78.5% of its cash value), which we believe has largely reflected the bear market sentiment and policy headwind. We believe there should be clear differentiation between Xinyuan, which operates mostly in higher growth and less speculation-driven Tier II cities, and those developers that focus more on speculator-concentrated Tier I cities. With a solid balance sheet, sufficient liquidity, plenty of projects in the pipeline to support its growth through 2012, combined with an experienced and disciplined management team, we believe the company justifies a much higher valuation. Our $7 price target is based on the shares trading at 8x our expected 2011 non-GAAP EPADS of $0.92 and 1x our estimated BVPADS of $6.95, representing a slight discount to Xinyuan's Chinese real estate developer peers currently listed on U.S. and Hong Kong exchanges.
POSITION: LONG
Longwei Petroleum (LPH) approved for NYSE Amex listing
Longwei Petroleum Investment Holding Ltd. (LPH), a leading oil and fuel wholesaler and distributor operating in Shanxi Province, China, announced yesterday that they received approval to list its common stock on NYSE AMEX. The company will begin trading on the Amex today under the ticker symbol "LPH."
"We are excited to move to NYSE Amex and believe that this transition will bring greater value to our shareholders through increased investor visibility," Mr. Cai Yongjun, Chairman and CEO of Longwei, commented. "I can think of no better way to finish a strong fiscal year and jumpstart a new one than with this pivotal move to a senior exchange. We welcome the increased responsibility and accountability that the new listing will entail, and we see it as a validation of the trust and credibility that we have worked so hard to build with our investors. As a leading petroleum distributor in China, Longwei is strongly positioned to continue expanding its reach in the coming year. The transition to NYSE Amex enables us to increase awareness in the investment community and attract a larger, more diverse shareholder base. We would like to thank our shareholders, employees, and other stakeholders for their ongoing support as we move forward into what will undoubtedly be a record year for Longwei Petroleum."
Yesterday LPIH closed the day at $2.33 up nearly 7% on 1.45M shares. The price action carried LPIH well over the 50 as well as the 200 Day Moving Averages all on record volume. This stock could be a trading opportunity today.
POSITION: NO
"We are excited to move to NYSE Amex and believe that this transition will bring greater value to our shareholders through increased investor visibility," Mr. Cai Yongjun, Chairman and CEO of Longwei, commented. "I can think of no better way to finish a strong fiscal year and jumpstart a new one than with this pivotal move to a senior exchange. We welcome the increased responsibility and accountability that the new listing will entail, and we see it as a validation of the trust and credibility that we have worked so hard to build with our investors. As a leading petroleum distributor in China, Longwei is strongly positioned to continue expanding its reach in the coming year. The transition to NYSE Amex enables us to increase awareness in the investment community and attract a larger, more diverse shareholder base. We would like to thank our shareholders, employees, and other stakeholders for their ongoing support as we move forward into what will undoubtedly be a record year for Longwei Petroleum."
Yesterday LPIH closed the day at $2.33 up nearly 7% on 1.45M shares. The price action carried LPIH well over the 50 as well as the 200 Day Moving Averages all on record volume. This stock could be a trading opportunity today.
POSITION: NO
Tuesday, July 20, 2010
The art of resisting irrational behavior
BUY LOW, SELL HIGH
Some Chinese quality stocks trade for a dime. For research and ideas the websites http://www.geoinvesting.com/ or http://china.fixyou.co.uk/ are an excellent choice.
Monday, July 19, 2010
Irrational behaviour getting common in Chinese stocks?
Anytime you buy or sell a stock, you should be buying and selling irrational behaviour.
You should buy shares when they are irrationally cheap and sell them when they are irrationally expensive. Those are subjective concepts but at the end they work. Certainly in hindsight it's obvious when things are absurdly cheap or absurdly expensive
People typically give too much weight to recent experience and extrapolate recent trends that are at odds with long-run averages and statistical odds. They tend to become more optimistic when the market goes up and more pessimistic when the market goes down.
“In summary, people trade for both cognitive and emotional reasons. They trade because they think they have information when they have nothing but noise (Orient Paper), and they trade because trading can bring the joy of pride. Trading brings pride when decisions turn out well, but it brings regret when decisions do not turn out well. Investors try to avoid the pain of regret by avoiding the realization of losses, employing investment advisors as scapegoats, and avoiding stocks of companies with low reputations."
Meir Statman ("Investor Psychology and Market Inefficiencies," Equity Markets and Valuation Methods, The Institute of Chartered Financial Analysts, 1988)
"Graham's conviction rested on certain assumptions. First, he believed that the market frequently mispriced stocks. This mispricing was most often caused by human emotions of fear (dilution, restatements and auditor issues) and greed. At the height of optimism, greed moved stocks beyond their intrinsic value, creating an overpriced market. At other times, fear moved prices below intrinsic value, creating an undervalued market."
Robert G. Hagstrom, The Warrent Buffet Way
For quite a period we can say U.S.-Chinese stocks are way undervalued and are traded at bankruptcy prices. Why, because in general misplaced fear. Short sellers like fear and will do anything to support it. So prices are slaughtered even more. Look for stocks that are likely to grow more than 20% the coming years, have almost no debt and are investor’s friendly.
You should buy shares when they are irrationally cheap and sell them when they are irrationally expensive. Those are subjective concepts but at the end they work. Certainly in hindsight it's obvious when things are absurdly cheap or absurdly expensive
People typically give too much weight to recent experience and extrapolate recent trends that are at odds with long-run averages and statistical odds. They tend to become more optimistic when the market goes up and more pessimistic when the market goes down.
“In summary, people trade for both cognitive and emotional reasons. They trade because they think they have information when they have nothing but noise (Orient Paper), and they trade because trading can bring the joy of pride. Trading brings pride when decisions turn out well, but it brings regret when decisions do not turn out well. Investors try to avoid the pain of regret by avoiding the realization of losses, employing investment advisors as scapegoats, and avoiding stocks of companies with low reputations."
Meir Statman ("Investor Psychology and Market Inefficiencies," Equity Markets and Valuation Methods, The Institute of Chartered Financial Analysts, 1988)
"Graham's conviction rested on certain assumptions. First, he believed that the market frequently mispriced stocks. This mispricing was most often caused by human emotions of fear (dilution, restatements and auditor issues) and greed. At the height of optimism, greed moved stocks beyond their intrinsic value, creating an overpriced market. At other times, fear moved prices below intrinsic value, creating an undervalued market."
Robert G. Hagstrom, The Warrent Buffet Way
For quite a period we can say U.S.-Chinese stocks are way undervalued and are traded at bankruptcy prices. Why, because in general misplaced fear. Short sellers like fear and will do anything to support it. So prices are slaughtered even more. Look for stocks that are likely to grow more than 20% the coming years, have almost no debt and are investor’s friendly.
China in the 21st Century: What Everyone Needs to Know
The need to understand this global giant has never been more pressing: China is constantly in the news, yet conflicting impressions abound. Within one generation, China has transformed from an impoverished, repressive state into an economic and political powerhouse. In China in the 21st Century: What Everyone Needs to Know , Jeffrey Wasserstrom provides cogent answers to the most urgent questions regarding the newest superpower and offers a framework for understanding its meteoric rise.
Focusing his answers through the historical legacies--Western and Japanese imperialism, the Mao era, and the massacre near Tiananmen Square--that largely define China's present-day trajectory, Wasserstrom introduces readers to the Chinese Communist Party, the building boom in Shanghai, and the environmental fall-out of rapid Chinese industrialization. He also explains unique aspects of Chinese culture such as the one-child policy, and provides insight into how Chinese view Americans.
Wasserstrom reveals that China today shares many traits with other industrialized nations during their periods of development, in particular the United States during its rapid industrialization in the 19th century. Finally, he provides guidance on the ways we can expect China to act in the future vis-a-vis the United States, Russia, India, and its East Asian neighbors.
Jeffrey N. Wasserstrom is a Professor of History at the University of California, Irvine. He is the author of Global Shanghai, China's Brave New World, and Twentieth Century China.
Recommended for those who want a basic comprehension of Chinese recent history and politics. Perhaps most illuminating is the book's comparative analysis with Western nations, carefully constructed around examples of similarities between contemporary China (since the 1980s) and the United States during its own industrialization during the 19th century.
Focusing his answers through the historical legacies--Western and Japanese imperialism, the Mao era, and the massacre near Tiananmen Square--that largely define China's present-day trajectory, Wasserstrom introduces readers to the Chinese Communist Party, the building boom in Shanghai, and the environmental fall-out of rapid Chinese industrialization. He also explains unique aspects of Chinese culture such as the one-child policy, and provides insight into how Chinese view Americans.
Wasserstrom reveals that China today shares many traits with other industrialized nations during their periods of development, in particular the United States during its rapid industrialization in the 19th century. Finally, he provides guidance on the ways we can expect China to act in the future vis-a-vis the United States, Russia, India, and its East Asian neighbors.
Jeffrey N. Wasserstrom is a Professor of History at the University of California, Irvine. He is the author of Global Shanghai, China's Brave New World, and Twentieth Century China.
Recommended for those who want a basic comprehension of Chinese recent history and politics. Perhaps most illuminating is the book's comparative analysis with Western nations, carefully constructed around examples of similarities between contemporary China (since the 1980s) and the United States during its own industrialization during the 19th century.
Friday, July 16, 2010
Artificial Life (ALIF) reveals updated Q2 iPhone downloads stats
Artificial Life (ALIF), our China Investor King Portfolio investment, yesterday revealed its recent and updated iPhone title sales, download numbers and key ranking statistics.
The company announced that as of June 30, 2010, it has produced and released 30 games for the iPhone, iPod touch and iPad. So far, the top title was downloaded for close to 3.9 million times, the second most for nearly 2.7 million times and the third most for over 1.8 million times. The average number of downloads per game was about 0.51 million. Paid iPhone games were sold at between USD 0.99 to USD 4.99 with an average price per game of USD 2.55. The company released 14 free or lite titles versus 16 paid games.
The total number of iPhone/iPad game downloads generated during the first 6 months of 2010 was approximately 7.4 million in total compared to approximately 8 million for the whole fiscal year of 2009.
Among the produced games, 22 are based on licensed and branded intellectual property from a variety of licensors while 8 games are based on Artificial Life's own proprietary IP. The games have been sold in a total of 85 countries worldwide. The distribution of game downloads by regions is: 49% in North America, 33% in Europe and Africa, 13% in Asia Pacific, 3% in Latin America and 2% in the Middle East. The Top 5 countries regarding the number of downloads for our products are: United States, United Kingdom, Canada, France and Germany (with 44%, 10%, 5%, 5% and 5% of downloads respectively).
As of June 30, 2010, 36% of the games the company has produced have reached rank #1 in their respective categories, more than 50% have reached the Top 5, 71% the Top 10, 89% the Top 50, and 96% made it to the Top 100 rankings.
Additionally, the games have been in the Top 10 rankings across 56 countries globally. In terms of duration, 6 titles have been in the Top 100 for more than 180 days, 9 titles for more than 90 days, and 15 titles for more than 30 days.
"We continuously experience substantial growth in the number of iPhone game downloads in 2010. We have already reached the same download levels in the first 6 months of 2010 as we have in the whole year 2009. The quality and the fun factor of our games have been the key to our success. We will continue to develop high quality games and also new business apps for the iPhone and iPad in the remainder of 2010. Our first business app for telemedicine and diabetics will be launched soon," said Eberhard Schoneburg, CEO of Artificial Life, Inc.
If we compare the figures with Q1 we see that the average price went up from $ 2.49 to $ 2.55. The average number of downloads per game increased from 0.42 million to 0.51 million. A good sign. Personally I thought that the distribution in the Asia-Pacific region would increase.
POSITION: LONG
The company announced that as of June 30, 2010, it has produced and released 30 games for the iPhone, iPod touch and iPad. So far, the top title was downloaded for close to 3.9 million times, the second most for nearly 2.7 million times and the third most for over 1.8 million times. The average number of downloads per game was about 0.51 million. Paid iPhone games were sold at between USD 0.99 to USD 4.99 with an average price per game of USD 2.55. The company released 14 free or lite titles versus 16 paid games.
The total number of iPhone/iPad game downloads generated during the first 6 months of 2010 was approximately 7.4 million in total compared to approximately 8 million for the whole fiscal year of 2009.
Among the produced games, 22 are based on licensed and branded intellectual property from a variety of licensors while 8 games are based on Artificial Life's own proprietary IP. The games have been sold in a total of 85 countries worldwide. The distribution of game downloads by regions is: 49% in North America, 33% in Europe and Africa, 13% in Asia Pacific, 3% in Latin America and 2% in the Middle East. The Top 5 countries regarding the number of downloads for our products are: United States, United Kingdom, Canada, France and Germany (with 44%, 10%, 5%, 5% and 5% of downloads respectively).
As of June 30, 2010, 36% of the games the company has produced have reached rank #1 in their respective categories, more than 50% have reached the Top 5, 71% the Top 10, 89% the Top 50, and 96% made it to the Top 100 rankings.
Additionally, the games have been in the Top 10 rankings across 56 countries globally. In terms of duration, 6 titles have been in the Top 100 for more than 180 days, 9 titles for more than 90 days, and 15 titles for more than 30 days.
"We continuously experience substantial growth in the number of iPhone game downloads in 2010. We have already reached the same download levels in the first 6 months of 2010 as we have in the whole year 2009. The quality and the fun factor of our games have been the key to our success. We will continue to develop high quality games and also new business apps for the iPhone and iPad in the remainder of 2010. Our first business app for telemedicine and diabetics will be launched soon," said Eberhard Schoneburg, CEO of Artificial Life, Inc.
If we compare the figures with Q1 we see that the average price went up from $ 2.49 to $ 2.55. The average number of downloads per game increased from 0.42 million to 0.51 million. A good sign. Personally I thought that the distribution in the Asia-Pacific region would increase.
POSITION: LONG
Wednesday, July 14, 2010
Artificial Life (ALIF) assigns new CFO
Artificial Life, Inc. (ALIF) (http://www.artificial-life.com/), a leading provider of mobile technology and applications, announced today the assignment of Frank Namyslik as its new Chief Financial Officer effective July 16, 2010. Mr. Namyslik takes over this role and responsibility from the current CEO, Chairman and founder of Artificial Life, Inc.
Mr. Namyslik has extensive management experience in the finance field. He co-founded and managed the BIT Berlin Innovation Technology Group and Neurotech Hochtechnology GmbH in Berlin from 1988 to 1996. From 1996 to 2000, he was Managing Director at Qnet Systems in Frankfurt. From 2003 to 2007, Frank was Head of Finance of an institute of the University of Arts in Berlin. Mr. Namyslik has been the Company's global financial controller from 2000 to 2002 and has rejoined the Company since 2007.
Mr. Namyslik holds a Masters degree in Mathematics from Freie University, Berlin.
"I am very excited about this opportunity and I am honored to be selected for this post. I will work hard to get Artificial Life to the next level and will make sure we have the financial resources and means to keep growing at the current pace. My key goal, however is to enhance shareholder value and to achieve a better and more appropriate market cap for our equity as soon as possible," said Frank Namyslik, CFO, Artificial Life, Inc.
"Frank's assignment is a big step forward for us. I am glad to be able to hand over this position and the financial responsibility to him now. Our current global expansion, new ventures and possible M&A activities require the full focus of a CFO. Frank's assignment allows myself to take better care of strategic partnerships and deals, new product developments and corporate acquisitions. We will be working closely together to further strengthen Artificial Life's leading role in the mobile content space," said Eberhard Schoneburg, CEO, Artificial Life, Inc.
Artificial Life (ALIF) is on our China Investor King Portfolio because we think it has a promising future and really can benefit from the iPhone/Ipad boom. The CEO's step is the right one and I really believe an uplisting to a major exhange in Q4 or Q1 2011 is something they are working on.
POSITION: LONG
Mr. Namyslik has extensive management experience in the finance field. He co-founded and managed the BIT Berlin Innovation Technology Group and Neurotech Hochtechnology GmbH in Berlin from 1988 to 1996. From 1996 to 2000, he was Managing Director at Qnet Systems in Frankfurt. From 2003 to 2007, Frank was Head of Finance of an institute of the University of Arts in Berlin. Mr. Namyslik has been the Company's global financial controller from 2000 to 2002 and has rejoined the Company since 2007.
Mr. Namyslik holds a Masters degree in Mathematics from Freie University, Berlin.
"I am very excited about this opportunity and I am honored to be selected for this post. I will work hard to get Artificial Life to the next level and will make sure we have the financial resources and means to keep growing at the current pace. My key goal, however is to enhance shareholder value and to achieve a better and more appropriate market cap for our equity as soon as possible," said Frank Namyslik, CFO, Artificial Life, Inc.
"Frank's assignment is a big step forward for us. I am glad to be able to hand over this position and the financial responsibility to him now. Our current global expansion, new ventures and possible M&A activities require the full focus of a CFO. Frank's assignment allows myself to take better care of strategic partnerships and deals, new product developments and corporate acquisitions. We will be working closely together to further strengthen Artificial Life's leading role in the mobile content space," said Eberhard Schoneburg, CEO, Artificial Life, Inc.
Artificial Life (ALIF) is on our China Investor King Portfolio because we think it has a promising future and really can benefit from the iPhone/Ipad boom. The CEO's step is the right one and I really believe an uplisting to a major exhange in Q4 or Q1 2011 is something they are working on.
POSITION: LONG
Tuesday, July 13, 2010
China Kangtai Cactus (CKGT) announces $1M equity infusion from Kodiak Capital Group
China Kangtai Cactus Biotech Inc. (CKGT) announced today that it has entered into an equity purchase agreement with Kodiak Capital Group, LLC to support its expansion and growth strategies.
The company intends to use $1 million in proceeds to help finance marketing projects for its cactus-based cigarettes and soft drinks. The company also plans to acquire additional equipment for its newly purchased cigarette manufacturing plant and its soft drinks operations to enhance current and future production capacity.
China Kangtai CEO Jinjiang Wang said, “This financing supports another major step forward in our expansion strategy. Demand for cactus-based products, particularly cigarettes, is growing rapidly every year. We are confident that the financing can help us greatly enhance our marketing efforts and business growth.”
Robert McCarthy, Managing Director of Kodiak Capital Group said, “We are pleased with the opportunity to invest in the exciting growth of China Kangtai Cactus. China has long history of using herbal-based products as medicine or regular dietary supplements. By leveraging our financial support, we believe that China Kangtai Cactus will further strengthen its enormous growth potential.”
About Kodiak Capital Group, LLC.
Kodiak Capital Group, LLC is engaged in assisting growth companies in all facets of their long term strategy by providing capital and progressive business solutions. Kodiak manages a portfolio of investments in public and private equities. Founded in 2009, Kodiak has transacted in excess of $400 million in financing for companies across a multitude of industries, including biotechnology, business services, consumer products, defense, healthcare, Internet, manufacturing, medical devices, natural resources, oil and gas, renewable energy and wireless communications. Headquartered in New York City; Kodiak has assisted companies throughout North America, China and Australia. More information may be found at http://www.kodiak-capital.com/
For more information regarding the deal: http://www.sec.gov/Archives/edgar/data/1017699/000114420410037603/v190358_8k.htm
I think it is great to get financing but there could be some pressure on the stock price, because the price will be based on the following formula: eighty three percent (83%) of the volume-weighted average price of the Company’s common stock five (5) days immediately preceding the date of the Put Notice and five (5) days immediately following the date of the Put Notice. I don't know if Kodiak Capital Group is allowed to bring the stock price down, but it could be that they want the shares as cheap as possible.
The company intends to use $1 million in proceeds to help finance marketing projects for its cactus-based cigarettes and soft drinks. The company also plans to acquire additional equipment for its newly purchased cigarette manufacturing plant and its soft drinks operations to enhance current and future production capacity.
China Kangtai CEO Jinjiang Wang said, “This financing supports another major step forward in our expansion strategy. Demand for cactus-based products, particularly cigarettes, is growing rapidly every year. We are confident that the financing can help us greatly enhance our marketing efforts and business growth.”
Robert McCarthy, Managing Director of Kodiak Capital Group said, “We are pleased with the opportunity to invest in the exciting growth of China Kangtai Cactus. China has long history of using herbal-based products as medicine or regular dietary supplements. By leveraging our financial support, we believe that China Kangtai Cactus will further strengthen its enormous growth potential.”
About Kodiak Capital Group, LLC.
Kodiak Capital Group, LLC is engaged in assisting growth companies in all facets of their long term strategy by providing capital and progressive business solutions. Kodiak manages a portfolio of investments in public and private equities. Founded in 2009, Kodiak has transacted in excess of $400 million in financing for companies across a multitude of industries, including biotechnology, business services, consumer products, defense, healthcare, Internet, manufacturing, medical devices, natural resources, oil and gas, renewable energy and wireless communications. Headquartered in New York City; Kodiak has assisted companies throughout North America, China and Australia. More information may be found at http://www.kodiak-capital.com/
For more information regarding the deal: http://www.sec.gov/Archives/edgar/data/1017699/000114420410037603/v190358_8k.htm
I think it is great to get financing but there could be some pressure on the stock price, because the price will be based on the following formula: eighty three percent (83%) of the volume-weighted average price of the Company’s common stock five (5) days immediately preceding the date of the Put Notice and five (5) days immediately following the date of the Put Notice. I don't know if Kodiak Capital Group is allowed to bring the stock price down, but it could be that they want the shares as cheap as possible.
Monday, July 12, 2010
Back in business
Holiday went and our Dutch team couldn't win the FIFA World Cup. After losing in 1974 and 1978 also the year 2010 was not succesful. Of course they were in the Soccer Final but the rough play on both sides didn't have anything to do with soccer and with a beautiful and worthly final. Some players behaved like Karate Kid.
The stock markets recovered but a lot of Chinese stocks got beaten up again. In general the Chinese major markets rebounded but in the OTC space a lot of (naked) short sellers take stocks to depressed levels. Unbelievable what is happening. Allegations of fraud that seem not to be true take over the reasoning. Sentiment is negative but gives a lot of room for attractive valuations. As a contrarian value investor the coming weeks are crucial for stock picking.
The stock markets recovered but a lot of Chinese stocks got beaten up again. In general the Chinese major markets rebounded but in the OTC space a lot of (naked) short sellers take stocks to depressed levels. Unbelievable what is happening. Allegations of fraud that seem not to be true take over the reasoning. Sentiment is negative but gives a lot of room for attractive valuations. As a contrarian value investor the coming weeks are crucial for stock picking.
Sunday, July 4, 2010
Holiday
From June 5, 2010 to June 12, 2010 I will be on holiday with my wife and daughter to the island of Schiermonnikoog.
For more information:
http://en.wikipedia.org/wiki/Schiermonnikoog
Chinese stocks will rebound. Look for quality stocks that are mispriced, have a good management, auditor and IR. Good luck and I will be back on Monday June 12.
For more information:
http://en.wikipedia.org/wiki/Schiermonnikoog
Chinese stocks will rebound. Look for quality stocks that are mispriced, have a good management, auditor and IR. Good luck and I will be back on Monday June 12.
Saturday, July 3, 2010
China Kangtai Cactus Bio-Tech (CKGT) buys cigarette manufacturer
8-K filing
On June 28, 2010, China Kangtai Cactus Bio-Tech, Inc. (the "Company") through its wholly-owned subsidiary, Harbin Hainan Kangda Cacti Hygienical Foods Co., Ltd. entered into an Asset Purchase Agreement (the "Agreement") with Dadi Tobacco Trade Center (the "Seller") of Raoping County in Guangdong Province of China. The Company has agreed to purchase from Seller certain real property and all improvements thereon, and all equipment, fixtures used in connection with the Seller's operations for RMB ("Renminbi") 3,500,000 (approximately US$5,147,000) in cash. The real property consists of the land use right to 4,784 square meters of land located in Raoping County of Guangdong Province of China for a period of 50 years.
Pursuant to the Agreement, the Company will make payments to the Seller in three installments. First installment will consist of 30% of the total purchase price to be paid within 10 days from the date of the execution of the Agreement. Second installment of 30% of the total purchase price will be paid at the commencement of the title transfer for the assets to be purchased under the Agreement with the applicable regulatory agencies. The third installment of 40% of the total purchase price will be paid within 5 days following the completion of the title transfer of all assets purchased. If the Seller does not complete all transfer of title of the assets required by law within 4 months from the date of the Agreement, the Seller will be subject to a penalty equal to 10% of the aggregate purchase price. If the Company does not make payment of the purchased price as set forth in the Agreement, the Company will be subject to a penalty payment equal to 10% of the amount of the installment payment not made at the time set out in the Agreement.
The Company currently outsources its cactus cigarettes. This acquisition will provide the Company with cigarette manufacturing capabilities to produce its own cactus cigarettes.
The description of the Agreement set forth above does not purport to be complete and are qualified in its entirety by the full text of the English version of the Agreement which is attached as Exhibit 10.1 hereto and incorporated by reference.
On June 28, 2010, China Kangtai Cactus Bio-Tech, Inc. (the "Company") through its wholly-owned subsidiary, Harbin Hainan Kangda Cacti Hygienical Foods Co., Ltd. entered into an Asset Purchase Agreement (the "Agreement") with Dadi Tobacco Trade Center (the "Seller") of Raoping County in Guangdong Province of China. The Company has agreed to purchase from Seller certain real property and all improvements thereon, and all equipment, fixtures used in connection with the Seller's operations for RMB ("Renminbi") 3,500,000 (approximately US$5,147,000) in cash. The real property consists of the land use right to 4,784 square meters of land located in Raoping County of Guangdong Province of China for a period of 50 years.
Pursuant to the Agreement, the Company will make payments to the Seller in three installments. First installment will consist of 30% of the total purchase price to be paid within 10 days from the date of the execution of the Agreement. Second installment of 30% of the total purchase price will be paid at the commencement of the title transfer for the assets to be purchased under the Agreement with the applicable regulatory agencies. The third installment of 40% of the total purchase price will be paid within 5 days following the completion of the title transfer of all assets purchased. If the Seller does not complete all transfer of title of the assets required by law within 4 months from the date of the Agreement, the Seller will be subject to a penalty equal to 10% of the aggregate purchase price. If the Company does not make payment of the purchased price as set forth in the Agreement, the Company will be subject to a penalty payment equal to 10% of the amount of the installment payment not made at the time set out in the Agreement.
The Company currently outsources its cactus cigarettes. This acquisition will provide the Company with cigarette manufacturing capabilities to produce its own cactus cigarettes.
The description of the Agreement set forth above does not purport to be complete and are qualified in its entirety by the full text of the English version of the Agreement which is attached as Exhibit 10.1 hereto and incorporated by reference.
Friday, July 2, 2010
Chinese coal producers could get hurt
• The National Development & Reform Commission (NDRC) released a statement on
June 25, 2010 that it has ordered coal companies to honor 2010 contract prices. That
means any additional recent price hikes from coal companies are to be refunded to
downstream customers by June 2010.
•In the statement, there was no mention of price cap. However, the move reflects the
government’s concern over inflation and the profitability of downstream industries.
•It raised the concern of the increased probability of further control measures should
coal pricing edge up any further. There could be some earning impact on coal producers, maybe the impact
in 2010 is minimal, but there is possibility that the original higher expected contract
coal price for 2011 would be reduced.
Although in the near term, the upside potential of coal price would remain a concern
and could cap the share price of coal producers. The production volume of a lot of producers is still expected to increase the coming years which can underscore its long term earnings outlook.
Conclusion
Based on the above reasons there could be some share price pressure on coal producers.
Risks
1.The economic growth in China is less than expected
2.Further tightening on the regulation of the coal prices
June 25, 2010 that it has ordered coal companies to honor 2010 contract prices. That
means any additional recent price hikes from coal companies are to be refunded to
downstream customers by June 2010.
•In the statement, there was no mention of price cap. However, the move reflects the
government’s concern over inflation and the profitability of downstream industries.
•It raised the concern of the increased probability of further control measures should
coal pricing edge up any further. There could be some earning impact on coal producers, maybe the impact
in 2010 is minimal, but there is possibility that the original higher expected contract
coal price for 2011 would be reduced.
Although in the near term, the upside potential of coal price would remain a concern
and could cap the share price of coal producers. The production volume of a lot of producers is still expected to increase the coming years which can underscore its long term earnings outlook.
Conclusion
Based on the above reasons there could be some share price pressure on coal producers.
Risks
1.The economic growth in China is less than expected
2.Further tightening on the regulation of the coal prices
Renhuang Pharmaceuticals (RHGP) receives listing approval
In our post of June 10 we mentioned that Renhuang Pharmaceuticals (RHGP) was almost ready for uplisting to AMEX. Yesterday they announced that they received approval to list its common stock on the NYSE Amex.
Renhuang expects to begin trading on the NYSE Amex on Friday, July 2, 2010. In connection with the listing on NYSE Amex, Renhuang's stock symbol will change to "CBP" from "RHGP".
"We are very pleased to move onto the NYSE Amex and begin our next phase as a public company," said Mr. Shaoming Li, Chairman of the Board, Chief Executive Officer and President of Renhuang Pharmaceuticals, Inc. "We are honored to join the family of NYSE companies and this is an important milestone in our continuous efforts to raise our profile within the investment community, improve our stock's liquidity, expand our transparency and enhance our corporate governance."
A positive step in the right direction to become an major player in the market of botanical products, bio-pharmaceuticals and traditional Chinese medicines.
POSITION: LONG
Renhuang expects to begin trading on the NYSE Amex on Friday, July 2, 2010. In connection with the listing on NYSE Amex, Renhuang's stock symbol will change to "CBP" from "RHGP".
"We are very pleased to move onto the NYSE Amex and begin our next phase as a public company," said Mr. Shaoming Li, Chairman of the Board, Chief Executive Officer and President of Renhuang Pharmaceuticals, Inc. "We are honored to join the family of NYSE companies and this is an important milestone in our continuous efforts to raise our profile within the investment community, improve our stock's liquidity, expand our transparency and enhance our corporate governance."
A positive step in the right direction to become an major player in the market of botanical products, bio-pharmaceuticals and traditional Chinese medicines.
POSITION: LONG
Thursday, July 1, 2010
China Investor King Portfolio
June 30, 2010 was a good moment to start a new portfolio, so I constructed the China Investor King portfolio (see under Pages) containing 10 stocks which I believe had a nice entry level yesterday because of the recent sell-off.
"BUY AT THE END OF JUNE AND YOU HAVE ENOUGH ROOM"
by Dutch Trader
We will see if we can outperform the market.
"BUY AT THE END OF JUNE AND YOU HAVE ENOUGH ROOM"
by Dutch Trader
We will see if we can outperform the market.
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