China Stock Research

Long-term horizon, value, research analyst, china
China Stock Research
Long-term horizon, value, research analyst, China
Contributor since: 2014
Company: China Stock Research
Don't think so
Thanks for the h/t
Agree with that
new loans, money supply, interbank rates (SHIBOR)
Thanks for your comment, although I don't quite understand what you're saying.
The point of the note was to look at the explosion of margin debt in the context of the index's big push higher. The data is publicly available, so if you'd like to adjust the horizons, please do so, and share what you find.
ok
Ok
Ok
Will this be a catalyst to close the valuation gap? Don't think so, but it will be interesting to see if this sparks a rally in US-listed names by investors who don't like being robbed.
The valuation gap between PRC & US helps the deal look attractive. That will probably change if the market corrects.
Valuation can be solved in a few ways: improve transparency, invest in better IR, increase shareholder returns via buybacks, have a real BoD that actually does stuff, etc. Is the valuation due to mistrust only, or the fact that in many cases companies are a fiefdom, effectively under the control of a majority owner? That'll earn a discount every time.
Disagree its a sound business decision b/c its going from a well-developed, deep, and highly liquid market (US) to a "flavor of the month" frontier mkt. When a co needs to raise capital X years from now (to finance a deal, M&A, etc.) what kind of mkt is better?
Yes, that is why the move is attractive for company owners. Buy cheap in the US, re-list at higher valns in PRC
Please do more research the VIE structure. You don't seem to understand how the operating companies in China link to the listed entity.
Foreign companies not subject to reg fd
No, spot silver
Good point abt $LONG, and to say insider trading isn't punished in China like it is in the US highlights the jurisdiction issue facing foreign companies listed in NY. SEC is mostly useless (and can't do anything outside US borders), and CSRC has it's own problems. Good post
Is this your way of saying thank you for providing data in English that was originally only in a Chinese? You're welcome. Interpret it as you'd like.
Top tier markets more important than lower tiers
Interesting, up here in the North, it seems like 老板 is the phrase of choice. Are you in southern China? (Linguistic nerd curiosity!)
US-listed names have been well correlated with A-shares over the past month or so; if that holds up, when/if SH tanks, selling could follow on in NY.
Agree. Remember JD's emphasis on "all legit" when it was announcing the French Mall (trying to skewer BABA)? If this was/is a widespread practice then that PR stunt could backfire in spectacular fashion. You don't have to be a genius to figure that out.
My guess on fake goods is that vendors slip them into inventory to pad their own margins, and that some vendors engage in brushing to achieve the same result.
It almost seems implausible that "all" vendors are doing it or that its a concerted effort. [Begin guesswork] Well-known brand name sellers wouldn't need to (they have a brand, and too much to risk), and if all smaller sellers were doing it, wouldn't that stifle the platform (costs become very high). [/End guesswork]
Considering that this is a very hot-button issue with consumers (nothing will kill an e-commerce site in China faster than 山寨, fake, goods), I'd guess (hope?) that senior management took concrete steps to punish the offender and also put some more checks in place.
Hey fair enough, but I'm sure you can see how accusing the author of writing a paid hit piece, absent anything substantiating, may give a bad impression.
No worries, hope it gave you a chuckle.
This was circulating a few months ago http://read.bi/1ckfee3
Older:
http://bit.ly/1ckfcTi
http://bit.ly/1ckfcTk
Good that Apple is trying to stay ahead of it, but suspect that it's tough as both sides keep modifying their techniques
Thanks for the link, I'll take a look! BTW, have you seen similar reports on rigged app ranking? Wild stuff.
Have you checked App Annie? It looks like it has decent data for iOS; droid coverage less impressive (maybe due to the many droid distro channels in China)
The newest release isn't ranked yet, so waiting to see how that does.
For a long, I'd think that you'd be very very interested in any news or views that challenge your thesis. If the company was/is doing this on any kind of scale & authorities intervene, it would undoubtedly be a problem for the stock.
Hi,
Regarding: "[i]n this case, I found the well-organized and well-paid brushing efforts among vendors especially interesting." Do you have more that supports the well-organized/well-paid bit?
It looks like you have a chat session from one employee, saying that their leader (领导) knows about it. This doesn't necessarily suggest that it goes much higher than what appear to be some low-level call reps that provide vendor support.
Had that person used 经理,老板,主管,etc. that would suggest it was sanctioned by someone higher up. In my experience in China, 领导 typically isn't used to refer to a person in a position of 'real' authority. (Caveat, JD could be doing its own thing regarding titles.)
And as for "don't worry, everyone's doing it", that could also be some assurance 小白 is trying to provide to the person on the other end of the line.
In any event, an interesting piece of information, thanks for taking the time to write an article & share your view.
Nope, don't. Too small
Non-GAAP EPS for Q4 $0.01, 2014 $0.05
Thanks for the reply, you're funny.
You're clearly emotionally invested in this stock, hope that strategy works out for you.
Thanks for your suggestion, I'll look into that.
I admire your penchant for optimism, it seems like a great example of some behavioral finance theory in practice, but here are a few things to consider:
1. One profitable quarter does not a year make. Not by a long shot. Taking a "0.14 x 4" for the FY EPS is pure speculation because...
2. Those earnings are non-core, so the sustainability is highly questionable (i.e. they aren't sustainable).
3. If you switch valuation metrics to fit your desired outcome (from a P/S to a P/E), you may eventually run out of valuation metrics. If you stick to your guns and use the P/S with the trailing 4 quarters of sales (about $3.3 per share), your earlier 3x multiple gives a $9.9 stock price vs. your earlier $12.
BVPS was about $3 at the end of Q4, so applying the same multiple mentioned in the article suggests a price in the $5-$6 range.