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  • Chinese Internet Stock Boom [View article]
    This is not a time for value based metrics. I do agree that this is a bubble that will eventually burst, but the only stocks that are still going up consistently these days are hyper growth stocks. This is not dissimilar to tech bubble...... So if you are long term investor, stay out. If not, get in, ride the wave, but be aware of the risks involved.
    Apr 20, 2011. 08:10 AM | 4 Likes Like |Link to Comment
  • Reported Facebook/Baidu Deal Puts Pressure on Sina [View article]
    I agree with the assertion that SINA weibo is unlikely to be affected in significant way by Facebook/Baidu JV (if true). There are a number of Facebook-like websites already and they are pretty agile and able players. But they cannot withstand Weibo's popularity. Further, I cannot imagine Chinese Government will allow Facebook to connect to people outside of China. So the appeal of Facebook will be severely crippled. The idea that global firms can just enter China to threaten local offerings (they may not be original but they are very adaptable), is grossly overestimated. Look at Bestbuy, Groupon, eBay, Amazon.... Number of failures or near failures is huge......
    Apr 14, 2011. 07:23 AM | Likes Like |Link to Comment
  • High Conviction: A Chinese Motor Maker Firing on All Cylinders [View article]
    All I can say is... be careful..............
    Mar 8, 2011. 05:22 AM | Likes Like |Link to Comment
  • Sina: Trading at Value With Upside Potential [View article]
    I agree. Some top tier brokers downgraded the stock, as EPS growth will be delayed with expenses associated with transformation of the business. I think that is very short sighted. Weibo is getting increasingly ubiquitous in China and with this, Sina is trying to subsume other internet offerings - like internet video, group-purchase, messenger, etc etc. If the company is half successful in achieving this goal, the stock goes up 5x.

    The simple maths is... if it succeeds, the company will be worth anywhere from 10B to 50B. If it fails, it will still have its portal business and cash on balance sheet, worth about 3.5-4B. If we assign a 50% chance of success and 50% chance of failure, its predictive value is USD14.5B, 3x current market cap....... so to sell this now, or to downgrade this now, as according to some investment bank brokers, is to express the view that this venture will definitely fail. Anyone who knows about Weibo in China and understands its pervasiveness would think that is a silly bet to take.
    Mar 7, 2011. 04:26 AM | 2 Likes Like |Link to Comment
  • China: A Clean-Energy Power Leader? [View article]
    Agreed. Institutional incentive to give ip away is probably a result of short term commercial decision winning over longer term potential gains. It is however understandable as previous writer alluded to the fact that China is singularly the biggest market in the world.... If western firms (including japanese firms) want to play, they find themselves fighting over each other to see who can give away ip first to get market access.... Granted ip given is typically not the most advanced, but usually good enough for normal applications.
    Most of the grid spending is already not going to western companies now, although I am sure some western companies have special niches they occupy, and/or have jvs with local government entities making some products.
    For matter of wind, the big risk to the short case is that government announces even more significant spending on the grid, enabling more wind farm capacities to be connected. At least at this moment according to china state grid, 17-20gw a year is the likely run rate. Further, there is a requirement to using co-generational plants in cold weather periods. This is already leading to curtailment of some wind farms last winter.
    Jan 31, 2011. 10:28 AM | 1 Like Like |Link to Comment
  • China vs. Inflation: A Love-30 Match, So Far [View article]
    Thanks for the link. I suspect the Chinese Government will control lending in the coming months, through credit rationing, which means money flows to state companies. Inflation will be somewhat under control, growth may even continue to hold up, but not without doing some damage to the private sector in the process.
    Jan 31, 2011. 06:31 AM | Likes Like |Link to Comment
  • China vs. Inflation: A Love-30 Match, So Far [View article]
    Agree with Dian's analysis completely. Inflation rate on the ground in China suggests a massive inflationary pulse, from wages, food, rental, and other raw materials. The official number is way too conservative.

    If the Chinese Government does not tighten more aggressively, we will likely see sudden rapid collapse of growth that will reverberate throughout the globe. The bottom-line is, how is the country going to control inflation if it does not want to take the tough medicine of slower growth? China may operate on different rules, can it defy rules of economics.
    Jan 29, 2011. 11:20 PM | 1 Like Like |Link to Comment
  • China: A Clean-Energy Power Leader? [View article]
    As someone who has had lots of experience looking at China, what strikes me is that China's competitiveness edge in many areas that the Western World can see is a result of artificially suppressed costs in factors of production. Land is often almost free, labour is cheap, capital in interest rate is low (negative real rates has been the norm), and exchange rate is low. The end result is massive accrual of profits to the corporate sector and the government via corporate taxes.

    The allure of corporate profits has led to rapid economic development, and investment in industries that offers growth. This is why China experienced excess capacity in almost all mid to downstream industries.

    I am not sure if China can be called the leader in alternative energy. It is true that solar and wind capacities are growing like the clappers. China has 40gw of wind turbine production capacity but demand of 17gw and a third of wind farms are not connected to the grid because of grid problems. Wind turbine capacity is still growing as not all wind turbine makers are commercial in their thinking (i.e. State companies).

    So while we in the West can marvel at never-ending China growth, quality of growth is questionable at least in certain sectors. More importantly, from an investment perspective, (since this is an investment website,) alternative energy companies are fertile source of short ideas rather than long..........
    Jan 29, 2011. 10:34 PM | 2 Likes Like |Link to Comment