Zhao has been buying Wumart for sometime and I know that from last year. He now holds a 12% stake. I even opened an etrade hk account ready to follow his step. I am not sure how much commission + currency exchange fees Etrade will charge per trade so I have not funded the account. Yesterday 8277 was up over 10%, and traded at about HK$6.2. It has not been reached 6 for quite a while. I am not sure if I should get in or wait for a global mkt downturn to occur then pull the trigger.
What a bad name in English - sounds a copycat from Wal-Mart! its Chinese name is much better. wonder which came first. A Fortune article talked about the comapny. The article opens like this:http://www.wumart.com/Eng/NewShow.asp?NewsID=7573.
"If you want to get a glimpse of the future of retail, skip the trip to Wal-Mart, buy yourself a ticket to Beijing, and check out Wu Mart instead..."
The future of retail... What a compliment!!! It was a pity that I didn't know Wumart when I went back to china last year. (
There is actually a dark side of it. Its founder and former chairman 张文中 was sentenced for 18 years later last year for bribery. http://www.caijing.com.cn/2008-10-16/110020968.html I am not sure if he is really a criminal or just a sacrifice of politics. He resigned and was arrested in 2006. The company seems to have done well without him. http://blog.ce.cn/html/10/135610-181850.html It just released first quarter profits up 25% and its stock traded up 10% yesterday in hk.
Wednesday, April 29, 2009
Danyang Zhao 赵丹阳
If you never heard of Danyang Zhao before and you are interested in investing in China, I would suggest you to do some homework. He is called Godfather of private equity in china 中国私募教父.
The private equity world was completely underground in china sometime ago. But a few years later (too lazy to check when) some star managers were recruited by public financial institutions to start mutual funds or hedge funds. Therefore had the name of sunshine private equity 阳光私募. His funds did really well, and was at least once named the best performing fund by Bloomberg.
But he really made headline in China at the beginning of 2008 by shut down of his china mutual funds. http://focus.jrj.com.cn/ygsmdyr.html has some good information on this topic in Chinese. He was obviously learning from the closure of the partnerships of WB in the late 1960s. although he missed more profits from the chinese stock bubble later, he avoided the crash followed it as well.
(But he kept his hk hedge fund open. Even after the mkt downturn and everything else, his hk fund still had Accumulated Weighted-Return (with dividend reinvested in the fund) Since Inception of over 420% since inception in 01/2003. Note 2003 was a sort of bottom of Chinese stock mkt.)
He later again made an international headline by winning the bid to pay over US$2m to have lunch with WB. I recall Mr. Duan who won the bid previous year was also a Chinese. I followed that person for a while and went back to NTES and made a little bit money. I think Duan paid less than $1m. wonder how much will the next winner pay to win the bid.
The private equity world was completely underground in china sometime ago. But a few years later (too lazy to check when) some star managers were recruited by public financial institutions to start mutual funds or hedge funds. Therefore had the name of sunshine private equity 阳光私募. His funds did really well, and was at least once named the best performing fund by Bloomberg.
But he really made headline in China at the beginning of 2008 by shut down of his china mutual funds. http://focus.jrj.com.cn/ygsmdyr.html has some good information on this topic in Chinese. He was obviously learning from the closure of the partnerships of WB in the late 1960s. although he missed more profits from the chinese stock bubble later, he avoided the crash followed it as well.
(But he kept his hk hedge fund open. Even after the mkt downturn and everything else, his hk fund still had Accumulated Weighted-Return (with dividend reinvested in the fund) Since Inception of over 420% since inception in 01/2003. Note 2003 was a sort of bottom of Chinese stock mkt.)
He later again made an international headline by winning the bid to pay over US$2m to have lunch with WB. I recall Mr. Duan who won the bid previous year was also a Chinese. I followed that person for a while and went back to NTES and made a little bit money. I think Duan paid less than $1m. wonder how much will the next winner pay to win the bid.
Pureheart's open letter
Today I read an open letter to investors by ZHAO Danyang, founder of hedge fund Pureheart. http://www.pureheartchina.com/english/new10.asp. The letter was published at the beginning of 09. He believes "an important bottom will form in Chinese stock market in 2009". Is China really that immune from the developed world? i don't think the bottom will form in the US this year.
He also asks "Who will become China’s Wal-Mart, Toyota, Microsoft, P&G in the future?” Well, he obviously believes that Wumart (8277.hk) will be china's wal-mart, and probably BYD will be china's Toyota. Wumart and BYD are both interesting companies. I will talk about them more later.
If I have a lot of money (not sure how much but it would be a lot more than what i have now, I will invest some in purheart's fund). His new Natural Selection fund has a minimum investment amount of HK$250K, which is about US$32K. Not a lot really. But i am not sure if i have the extra amount to risk with him. Like hedge funds, he charges huge fees. I have never invested in hedge fund world before but those based in the US seems to require even higher net worth.
He also asks "Who will become China’s Wal-Mart, Toyota, Microsoft, P&G in the future?” Well, he obviously believes that Wumart (8277.hk) will be china's wal-mart, and probably BYD will be china's Toyota. Wumart and BYD are both interesting companies. I will talk about them more later.
If I have a lot of money (not sure how much but it would be a lot more than what i have now, I will invest some in purheart's fund). His new Natural Selection fund has a minimum investment amount of HK$250K, which is about US$32K. Not a lot really. But i am not sure if i have the extra amount to risk with him. Like hedge funds, he charges huge fees. I have never invested in hedge fund world before but those based in the US seems to require even higher net worth.
Tuesday, April 21, 2009
long term corporate bonds
recently i have found some bonds from some good companies (i.e. companies that unlikely file bankruptcy in the foreseeable future) have some bonds availiable for a nice return. Wonder if i should try some of these. Example,
- 211327AB7 from Continental Corp pays 8.375% trading at about $90 yielding over 12%, maturity 8/15/12. I am sure Continental Corp. can survive 3.5 years. Moody/S&P rating Baa3/BBB-
- 316773CH1 from Fifth Third Bank pays 8.25% trading at around $65 yielding over 12.5%. well this one has the maturity in 30 years. rating Baa2/BBB+
- 984119AC1 from Xerox pays 8% trading at about $70 yielding over 10%. it has two callable dates at or above par. not sure which bonds will be called and which won't. maturity in 18 years. rating Baa3/BB+
- 925524AH3 from Viacom pays 7.875% trading $66 yeilding over 12%. maturity in 21 years. Baa3/BBB
- 260543BJ1 from Dow Chemical pays 7.375% trading $70 yeilding near 11%, maturity in 20 years. Baa1/BB-
which newspaper company will be bought out?
noted that NYT has a big drop in price today. i think it will be only a matter of time before companies like this being bought by a privite equity firm or another media giant. but NYT is looking for other revenue genarating opportunities so let's just wait for a while.
My spots have been taken!!!
both eaglesnation and listeningtotherain.blogspot.com have been REGISTERED!!! and listeningtotherain is in GERMAN!!! who else can be as poetic as me!!!
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