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  • Coca Cola: Olympic Sponsorship is a Profitable Tradition [View article]
    I disagree with the author's position on Coke benefitting from the Olympics. Here is a commentary I wrote in Forbes recently entitled Beijing Olympic Sponsorship's a Waste.

    forbes.com/2008/04/23/......

    Companies like Adidas and Internet portal Sohu have coughed up serious money to sponsor the Beijing 2008 Olympics. Estimates have computer maker Lenovo paying $80 million to $100 million to be the official sponsor of the games. Eleven global sponsors--including Coca-Cola and McDonald's--spent a combined $850 million to sponsor the Turin and Beijing Olympics.

    With marketers salivating at the thought of selling to China's emerging 250 million-strong middle class, especially in light of the subprime debacle in the U.S. combined with slowing retail sales, many companies feel that sponsoring the Olympics is a great way to build brand awareness with Chinese consumers and increase sales. For even the largest companies, like Johnson & Johnson (nyse: JNJ - news - people ), winning China has become critical to hitting the annual numbers Wall Street demands.

    Excitement over the Beijing Olympics is at a fever pitch in China and growing as August 8 approaches. My firm, the China Market Research Group, decided to see just how effective Olympic sponsorship has been toward creating brand awareness, loyalty and more important, triggering sales in China. Over the past three months, we conducted several hundred in-depth interviews and surveys with Chinese men and women between the ages of 18 and 45 in 10 cities throughout the country.

    The results of the research were disheartening for those companies that have ponied up the kind of money involved in becoming an Olympic sponsor. Nearly 80% of those Chinese consumers we polled said they "did not care" who the official sponsors were and the vast majority "did not consider official Olympic sponsorship" when buying a product. Boycotts in the Western world of official Olympic sponsors are already being called for during the Olympic Torch run in light of the Darfur and Tibet controversies. With this kind of potential backlash in their home countries, Olympic sponsors need a sales bump in China...

    May 9, 2008. 05:32 AM | Likes Like |Link to Comment
  • Coca Cola: Olympic Sponsorship is a Profitable Tradition [View article]
    I disagree with the author's position on Coke benefitting from the Olympics. Here is a commentary I wrote in Forbes recently entitled Beijing Olympic Sponsorship's a Waste.

    www.forbes.com/2008/04...

    Companies like Adidas and Internet portal Sohu have coughed up serious money to sponsor the Beijing 2008 Olympics. Estimates have computer maker Lenovo paying $80 million to $100 million to be the official sponsor of the games. Eleven global sponsors--including Coca-Cola and McDonald's--spent a combined $850 million to sponsor the Turin and Beijing Olympics.

    With marketers salivating at the thought of selling to China's emerging 250 million-strong middle class, especially in light of the subprime debacle in the U.S. combined with slowing retail sales, many companies feel that sponsoring the Olympics is a great way to build brand awareness with Chinese consumers and increase sales. For even the largest companies, like Johnson & Johnson (nyse: JNJ - news - people ), winning China has become critical to hitting the annual numbers Wall Street demands.

    Excitement over the Beijing Olympics is at a fever pitch in China and growing as August 8 approaches. My firm, the China Market Research Group, decided to see just how effective Olympic sponsorship has been toward creating brand awareness, loyalty and more important, triggering sales in China. Over the past three months, we conducted several hundred in-depth interviews and surveys with Chinese men and women between the ages of 18 and 45 in 10 cities throughout the country.

    The results of the research were disheartening for those companies that have ponied up the kind of money involved in becoming an Olympic sponsor. Nearly 80% of those Chinese consumers we polled said they "did not care" who the official sponsors were and the vast majority "did not consider official Olympic sponsorship" when buying a product. Boycotts in the Western world of official Olympic sponsors are already being called for during the Olympic Torch run in light of the Darfur and Tibet controversies. With this kind of potential backlash in their home countries, Olympic sponsors need a sales bump in China...
    May 9, 2008. 05:31 AM | Likes Like |Link to Comment
  • What's Behind China's Recent Currency Surge? [View article]
    Thanks for the comment Alex and nice words... at least about my previous articles. I am not sure that the #s are that insignificant for this one however. Let's do some back on the envelope calculations. The BBC estimates that 1.5 million Taiwanese live in China. If only 10% of them exchanged $50,000 USD in a rush to take advantage of the increasingly currency rates, that would total $7.5 bil USD. Now, this would not include the # of Taiwanese who had families visit them here at some point before the new currency conversion laws went into effect and who would have exchanged money (i.e. wives and kids) nor does it include the Taiwanese who travel here on business but have bank accounts here.

    We also can factor in the number of HK people who regularly exchange money in the same way as well as foreigners from America and Europe. The numbers of foreigners working legally in Shanghai # only about 60,000, but a much larger # come in on short-term work visas who also have banking accounts. You can see the real estate speculation to get an idea that a lot of foreigners have been sending money into China -- so much that the Govt now makes people live in China legally for one year or open a Chinese company in order to invest in order to curb real estate speculation.

    I did a very unscientific survey by asking friends and at least 10 changed the money. I also asked a couple of other businessmen who said that their companies (set up as rep offices here) were worried about having problems with RMB since they cannot bill here to get more RMB and did not want to go through the hassle of getting currency approval for the companies -- they have for years exchanged money through the personal accounts of their foreign executives.

    Now, based on this, it is realistic that $10 bil. USD extra was brought into China, especially when you consider that the RMB rates have steadily been increasingly over the last few months. My hunch still is that the # was higher than that and that this is a conservative #.

    Accountants have also been saying that a lot of money has been coming in to take advantage of the current tax code and to get grandfathered in. i am not an accountant but word on the street has been that they have been real busy with this.

    The business capital inflow would also be fairly significant and perhaps, as you pointed out, higher than the personal conversion amounts. It is possible then that we have $20 bil. USD on the fairly conservative side. I would reckon that a sizeably number of people from HK exchange money too, perhaps on a level as high as the Taiwanese which would add more than the $2 bil. USD or so I estimated before.

    Anyway, thanks for the note, and I certainly welcome comments and debate on my articles. I certainly got a lot of hate mail for my article on the difficulties Japanese car manufacturers have in China because of political and historical tensions -- by the way for those folks, I just bought a Toyota.

    Cheers,

    Shaun Rein
    researchcmr.com
    Apr 18, 2007. 08:55 PM | Likes Like |Link to Comment
  • What's Behind China's Recent Currency Surge? [View article]
    Thanks for the comment Alex and nice words... at least about my previous articles. I am not sure that the #s are that insignificant for this one however. Let's do some back on the envelope calculations. The BBC estimates that 1.5 million Taiwanese live in China. If only 10% of them exchanged $50,000 USD in a rush to take advantage of the increasingly currency rates, that would total $7.5 bil USD. Now, this would not include the # of Taiwanese who had families visit them here at some point before the new currency conversion laws went into effect and who would have exchanged money (i.e. wives and kids) nor does it include the Taiwanese who travel here on business but have bank accounts here.

    We also can factor in the number of HK people who regularly exchange money in the same way as well as foreigners from America and Europe. The numbers of foreigners working legally in Shanghai # only about 60,000, but a much larger # come in on short-term work visas who also have banking accounts. You can see the real estate speculation to get an idea that a lot of foreigners have been sending money into China -- so much that the Govt now makes people live in China legally for one year or open a Chinese company in order to invest in order to curb real estate speculation.

    I did a very unscientific survey by asking friends and at least 10 changed the money. I also asked a couple of other businessmen who said that their companies (set up as rep offices here) were worried about having problems with RMB since they cannot bill here to get more RMB and did not want to go through the hassle of getting currency approval for the companies -- they have for years exchanged money through the personal accounts of their foreign executives.

    Now, based on this, it is realistic that $10 bil. USD extra was brought into China, especially when you consider that the RMB rates have steadily been increasingly over the last few months. My hunch still is that the # was higher than that and that this is a conservative #.

    Accountants have also been saying that a lot of money has been coming in to take advantage of the current tax code and to get grandfathered in. i am not an accountant but word on the street has been that they have been real busy with this.

    The business capital inflow would also be fairly significant and perhaps, as you pointed out, higher than the personal conversion amounts. It is possible then that we have $20 bil. USD on the fairly conservative side. I would reckon that a sizeably number of people from HK exchange money too, perhaps on a level as high as the Taiwanese which would add more than the $2 bil. USD or so I estimated before.

    Anyway, thanks for the note, and I certainly welcome comments and debate on my articles. I certainly got a lot of hate mail for my article on the difficulties Japanese car manufacturers have in China because of political and historical tensions -- by the way for those folks, I just bought a Toyota.
    Apr 18, 2007. 08:55 PM | Likes Like |Link to Comment
  • Xinhua Finance Media: Why I Took a Chance on this Chinese IPO [View article]
    247wallst.blogspot.com...

    "New Oriental Education (EDU-NYSE), a TOEFL test prep company in China priced above its estimated range. It priced 7.5 million shares of its ADR's at $15.00, which is above the $11.00 to $13.00 range. "

    Everyday retail investors could only get in around $22 USD. i could get in there via Etrade (I did not buy).You can look at Yahoo Finance to see EDU low for the past year.

    finance.yahoo.com/q?d=...;s=EDU

    Where did you get the $25.56 number and where did you get the Sept. 15th date? I wrote about EDU's IPO on Sept. 21 which said EDU is a great stock but investors must be prepared for volatility.

    china.seekingalpha.com...

    We all make mistakes -- I have made some.


    SR
    Mar 12, 2007. 08:57 PM | Likes Like |Link to Comment
  • Baidu.com: Despite Soft Guidance, Proven Scalable Business Model Should Provide Upside [View article]
    I hope investors took my advice and shorted Baidu as some of our clients have done. While Baidu has some decent attributes and frankly has pretty good long-term potential, the valuations that Wall Street were giving it were absurd. Baidu in China is no Google in the US.

    We will see if Focus Media can similarly keep up the valuations.

    Shaun Rein
    Feb 15, 2007. 06:12 PM | Likes Like |Link to Comment
  • China: It May Be Time to Take Something Off the Table [View article]
    Here is a BusinessWeek article by Brian Bremner on the Chinese stock market.

    Talking Investors Down From China High
    Beijing officials have issued stern warnings and domestic stock markets could be in for a nasty correction. Will Chinese investors listen?

    Chinese financial authorities have stated as bluntly as possible in recent days that the mainland's hyperactive stock markets are clearly in Alice in Wonderland territory when it comes to valuations and sustainability. And sure enough, some sort of pause, or possibly the beginning of a much-needed correction, may be under way.

    Comments by National People's Congress Vice-Chairman Cheng Siwei that both the Shanghai and Shenzhen stock exchanges were in the midst of a "bubble" have had an impact, as have suggestions by other officials that they are prepared to clamp down on bank funding to domestic mutual funds and possibly raise reserve requirements on banks.

    The Shanghai and Shenzhen 300 Index that tracks local currency-denominated mainland stocks fell 6.5% on Jan. 31, and while that index finished up slightly on the first trading day of February, few doubt this market is in for some adjustments on the down side. In fact, analysts have been sounding the alarm since late last year about the rapid runup of mainland stocks and exchange-traded funds heavily exposed to China, such as the iShares FTSE/Xinhua China 25 Index Fund (FXI) that is designed to mimic the index it is named after (see BusinessWeek.com, 1/8/07, "Stocks: The Chinese Correction?").

    Not Over Yet
    At the mainland exchanges in China, "The valuations for some of the stocks have become quite stretched, and clearly officials are worried about a bubble," says Jing Ulrich, head of China equity markets at JP Morgan (JPM) in Hong Kong. Ulrich has pointed out that big mainland banks have been trading at richer price-to-book value multiples than Citigroup (C) and HSBC Holdings (HBC). "A 15% to 20% correction isn't out of the question."

    But don't bet on a massive retreat from mainland stocks from panicky Chinese investors. In fact, plenty of analysts, including Ulrich and Lorraine Tan, vice-president of S&P Equity Research for Asia Pacific based in Singapore, think the A-share market could easily deliver double-digit gains this year. Tan is actually forecasting a 25% gain in 2007. S&P, like BusinessWeek, is a unit of The McGraw-Hill Cos. (MHP).

    In fact, right now there is something of a tug of war between government officials and rich Chinese investors. Beijing is trying to shout down stock prices to more reasonable levels without resorting to drastic measures, while the investors see earnings-per-share growth rising by 20%, and have precious few other investment options to choose from that can deliver that kind of growth.

    Investors Rush In
    Shaun Rein, founder of China Market Research Group, says that moves to make mortgage down payments higher last year, coupled with ultra-low bank interest paid on savings, is driving a lot of cash into the stock market. The government mandates time deposit interest rates of around 2%—but that is not keeping up with inflation that in December clocked 2.8% year-on-year growth (see BusinessWeek.com, 1/25/07, "China Growth Blows Past Growth Forecasts").

    "The result is that the Chinese are blindly pouring money into Chinese stocks because they have no other choice to see their money grow," says Rein. "We have interviewed housewives who are now running to invest money because they do not want to get left out of the action."

    Also, no one can really make a case against Chinese economic growth that is bearish enough to persuade ordinary investors that it's time to stuff yuan notes under the mattresses. On Jan. 25, China blew away consensus forecasts and reported that its economy grew 10.7% in 2006, vs. 10.4% in 2005. Its total economic output in dollar terms is now about $2.69 trillion.

    China is expected to grow again in the near-10% range in 2007, and will certainly overtake Germany as the world's No. 3 economy by the end of next year. China's latest GDP data, "…makes 2006 the fastest year of economic growth in a decade," Minggao Shen, a Beijing Citigroup economist, wrote in a note to clients on Jan. 25 after the numbers came out.

    Hoping for Soft Landings
    Last year, the Shanghai and Shenzhen 300 Index delivered returns of about 130% to investors. Earlier this year, the index touched a new high and the combined market capitalization of stocks traded in Shanghai and Shenzhen broke the $1 trillion market for the first time. For investors, it's hard to resist all this momentum and take a pass on possibly robust gains in 2007.

    Still, Standard Chartered Senior Economist Stephen Greene thinks Beijing, if need be, is ready to basically cut off bank financing to the markets by ratcheting up bank reserve requirements or maybe even raising interest rates. "They would be happy with a stable and rising market, but the sheer violence" of the recent rally has rattled government officials, says Green.

    Song Guoqing, an economist at Beijing University, thinks the government probably won't have to resort to blunt tools and will engineer a soft landing in share prices by verbal warnings. "I don't think the government will take serious action to cool the stock market," he says. "They just want the growth to slow down a little bit."

    That's true, but China's swelling investor class doesn't have a lot of options. There will certainly be some net selling if the current market declines are sustained, but it is likely folks will be back in full force later in the year. Once you're hooked on stellar and sudden market returns, it's hard to go cold turkey, regardless of what the government says.

    Bremner is Asia Regional Editor for BusinessWeek in Hong Kong.
    With Dexter Roberts in Beijing

    www.businessweek.com/g...
    Feb 2, 2007. 07:20 AM | Likes Like |Link to Comment
  • Investing In China's Online Gaming Sector [View article]
    Thank you for the correction on the Netease game title. It should read "
    Fantasy Westward Journey" and not "Dreaming Westward Journey".
    Jan 3, 2007. 07:23 PM | Likes Like |Link to Comment
  • Google's 70% Market Share: The Bad News [View article]
    As someone who is greatly concerned about transparency and conflicts of interest when analysts write about stocks and when I personally do, I think that it is important that it is highlighted here that Blodgett was banned from working in the securities industry due to complaints about conflicts of interest from his time with Merrill Lynch as an internet analyst.

    You can find this on his bio of his website. internetoutsider.typep...

    Although Blodgett does not appear to be breaking any rules by writing about stocks here, I think it is important that all readers of his work know his background.

    On his bio, it further says "Henry Blodget or other Cherry Hill employees own stock in Yahoo!, Time Warner, Amazon.com, eBay, and Microsoft and may own stock in other companies mentioned here." But he does not divulge on each article whether or not he owns stock in the companies he is covering. If he does own Yahoo, obviously it is good for him to slam Google in this article.

    It is important that people adhere to the highest ethics in business.

    Shaun Rein
    Dec 21, 2006. 06:07 PM | Likes Like |Link to Comment
  • Bodisen Biotech: The Little Fertilizer Company That Could [View article]
    This is an excellent article and a good analysis. Would appreciate updates on what is happening with the short-term turmoil to determine if it will affect the Company's long-term potential. As a big believer in corporate governance, we are worried about the affects of the last few weeks on the share price going forward and how management handles the obstacles.
    Oct 6, 2006. 02:22 AM | Likes Like |Link to Comment
  • The U.S. Ban on Online Gambling - Not Unlike the Chinese Ban on Democracy [View article]
    Please stick to analyzing sectors that you know without spouting about sectors you clearly know nothing about -- i.e. China in this case.

    There needs to be a line on this site where the contributors do not discuss things that they know nothing about otherwise the veracity of ALL the postings on Seeking Alpha themselves are called into question. How can we take seriously the postings when we run into something like this?

    It is extremely irresponsible to criticize/ discuss elements of China as a purported expert when you know nothing about it, especially when you put it in the headline of your article. This is Yellow journalism of the bygone 1910s.

    This author's ramblings on the state of China are absurd and patently wrong. He writes:

    "The Chinese can access information on Democracy when they travel abroad". Actually, such information can be accessed in China. Have you been to China? Have you done research into the Chinese internet sphere before making such sweeping comments?

    You further go on to say,

    "Our software detects that you may be accessing the [website] from the United States. [Our website] does not accept bets from the United States. If you believe that this detection has occurred in error please contact the Help Desk.

    I don't know exactly what the message says in Chinese when you try to access a site on democracy or religious freedom but I'm sure it's not disimilar."

    Nothing like this happens whatsoever. Some sites are indeed banned but not many and the sites simply time out. I just typed in democracy and democracy China in my google search engine and nothing was blocked.

    And for general subjects like the ones you mentioned, they are not. I am not passing judgment here whatsoever on the censorship that exists in China's internet sphere, but I don't like people couching themselves as experts who certainly are not.

    Seriously, this posting does not pass muster whatsoever from a quality standpoint. These types of posts need to be vetted out otherwise it puts into question the quality of the postings here.

    Now, we can certainly debate merits of stocks etc. or have different opinions on issues, but it it inappropriate to have people who clearly know nothing about something talking about it.
    Oct 5, 2006. 05:35 PM | Likes Like |Link to Comment
  • China's New Obsession with Blogs and How Companies Can Benefit [View article]
    The China Market Research Group (CMR) published a full report entitled THE BLOGGING POINT on blogs and BBS in China and the impact they can have on MNCs doing business in China. The report includes 3 case studies on MNCs -- Volkswagen, Colgate-Palmolive, and Haagen-Daaz -- that have run into trouble in China because of blogs.

    The article version you see on China Seeking Alpha is an abridged version.

    For a free copy of the full report, feel free to email us directly at info@researchcmr.com or email Shaun Rein, Managing Director of CMR at shaunrein@researchcmr....

    researchcmr.com
    Jul 15, 2006. 04:22 AM | Likes Like |Link to Comment
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