Next month I am headed up to Beijing to chair the private equity panel for JP Morgan’s (JPM) China Conference. I am looking forward to the event for a number of reasons. First off, my panel has Kathy Xu, Managing Partner of China Capital Today; Brandon Lin, Partner of SAIF Partners; and Bob Theleen, Chairman of ChinaVest on it. These guys have been responsible for the growth of some of China’s most successful start-ups, and I am looking forward to hearing their insights on the venture capital and private equity sectors in China.
Kathy backed Netease (NTES) and Brandon helped back Shanda (SNDA) and Acorn International (ATV). If you are a regular reader of Seeking Alpha, then you know I think Netease is one of the best run companies in China in the tech sector. I sold out my shares a few months ago, but I am looking at getting back in the next time there is a drop in the share price.
Secondly, I am also interested in going to the conference as some companies that I track are going to be there. China Mobile (CHL), Petrochina (PTR), Ports Design, Shimao Property, Ctrip (CTRP), New Oriental (EDU), and Belle International are the companies that are presenting that I am most interested in. I never base my decisions on investing on conference calls and meetings with senior executives – I prefer to go much further in the investment strategy, such as talking with the companies main clients to determine satisfaction rates as we do for our hedge fund clients. But I like to meet the C-level executives of these companies just to get a feel for what they are like.
As people who read my articles know, I have always been a huge fan of Belle International as I wrote in BusinessWeek in a column entitled “The Key to Successful Branding in China”. Belle International has shoes that have created great loyalty amongst their consumers as well as a great retail network. Sadly, I do not own any of their equity stock, but I have stocks of their products in my home as my wife just loves the shoes.
I am also greatly looking forward to the presentations by New Oriental, which I have written about at lengths for years on Seeking Alpha. I sold out my last shares of New Oriental a few months ago. I still think that they have a great business model and strong management team. My concern is how scalable they are compared to say Ctrip (CTRP) -- which I own – as I wrote about in Select Chinese Stocks Have a Way to Go. I would like to see their strategy for dealing with inflation which is a huge concern for me in China right now. Real estate costs are skyrocketing, so I am concerned that New Oriental’s margins will be cut in the near future.
At any rate, the conference looks to be a great one. I am looking forward to meeting the other speakers such as Gao Xiqing, the President of CIC, China’s new sovereign fund. After the conference, I will write about some of the key points and how they should be of interest to investors in China.