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China & Hong Kong Stocks/Stock Market

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  1. #1

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    Post China & Hong Kong Stocks/Stock Market

    I know that everyone assumes the risks involved but for those of you who trade/invest in the HK or other Chinese stock markets, what are some stocks that you're trading/investing in and why?


  2. #2

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    Why not share your list first?

    traineeinvestor and SammyLee like this.

  3. #3

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    Watching:
    0633.HK
    6118.HK
    1087.HK
    8436.HK
    1241.HK
    0381.HK
    2327.HK

    Looking for others.

    traineeinvestor likes this.

  4. #4

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    Quote Originally Posted by SammyLee
    Watching:
    0633.HK
    6118.HK
    1087.HK
    8436.HK
    1241.HK
    0381.HK
    2327.HK

    Looking for others.
    That is a very exotic and speculative list that you have there. One of those times where not even a single ticker code registered in my mind and had to look all of them up.

    Problem I'd have with that list or even pursuing a conversation around that list is I have little base knowledge to start with.

    E.g. 0633 is described as follows. I could not explain what they do to my grandma or myself. Besides, all of this activity for a fairly low market cap is worrying.

    China All Access (Holdings) Limited is a Hong Kong-based investment holding company principally engaged in the provision of communication solutions. The Company operates through two segments. Communication Application Solutions and Services segment is engaged in the design of systems, installation, testing, software development for satellite and wireless communication and the provision of its related application services, as well as the distribution of satellite receivers and equipment. This segment is also engaged in the research and development, manufacture and distribution of wireless terminals and equipment, including display modules, casings and keyboards, among others. Investment segment is engaged in the provision of capital to supply streams in Hong Kong, as well as direct investment and investment in high yield treasury products.
    Way out of my risk profile if you ask me.

    Serious Q: Whats your goal with these stocks? Looking for a 100% bump in a few months? Or 10-15-20% a year increase over say 5 years?
    traineeinvestor and SammyLee like this.

  5. #5

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    Quote Originally Posted by SammyLee
    Watching:
    0633.HK
    6118.HK
    1087.HK
    8436.HK
    1241.HK
    0381.HK
    2327.HK

    Looking for others.
    Thanks for sharing your ideas. I have had a quick look at the companies on your list. As a retiree who lives off the income from his investments (some years better than others) and lives with the hope that he never has to tell Mrs Traineeinvestor that the wine fridge is empty because her husband blew our stash with some rash speculations, I tend to favour companies which I believe will pay reasonable dividends in the future. My views are undoubtedly tainted by my conservatism.

    Of the companies on your list, 6118 is loss making. 1087, 1241 and 0381 are not only loss making but the most recent announcements said that each company's losses were "widening." 8436 is a bit more interesting. From a charting perspective, the share price has shown a steady uptrend from October last year to mid/late January this year after which it has plateaued. It reported a profit and the most recent results expressed optimism about the company's future prospects. However, the trailing PE ratio is a sky-high 128x, the company operates in the hyper-competitive and extremely fickel beauty industry and the forward looking statements are very woolly and generic. All five of these are not companies I would consider adding to my portfolio.

    633 is more interesting. It's been listed for a number of years and has paid dividends for at least the last five years - albeit fluctuating wildly rather than growing. NPAT has declined steadily (not a good sign) and it operates in industries where it is a small player competing against much larger companies. That said, the industries it is in are growing ones where being on the winning end can be highly rewarding. Also, the balance sheet looks solid (assuming the assets are worth their carrying values) and the shares are currently trading at a massive discount to NAV. There is also a big part of the company's assets devoted to investment which could possibly provide some stability to earnings going forward. I do allow myself to allocate a small amount of my savings to speculative investments (only one currently - see next post) and I think there's enough here for me to do some further research - I'll spend some time this week reading the company's reports and other announcements.

    Apologies if all this sounds a bit negative - as I said at the beginning of this post, I'm a very conservative investor and generally buy boring dividend paying shares and index funds (with a very small allocation to speculative positions).

    I appreciate your willingness to share your ideas on the forum and am happy to reciprocate with a couple of ideas from my own portfolio.

    P.S. It goes without saying that I am not a professional adviser and anyone who takes anything I write as advice needs therapy.
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  6. #6

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    There is also a big part of the company's assets devoted to investment which could possibly provide some stability to earnings going forward.
    Honestly that is what concerned me about that particular listing - they're operating outside their core competency and the bit about "provision of capital to supply streams in Hong Kong" indicates that some of this might be "money lending" in addition to high yield china bonds (?) - have not looked at their reports or filings, so I'm speculating.

    Another strike for me is "do they have a significant market share in their industry or not". No clue but have my doubts.

    In terms of speculation, I'm happy putting a small amount into trades on existing investments or some very obvious long term plays - for me recently it has been in a Macau casino business, Xiaomi, Sino Land and 2800, with very measured exits within 90 days - out at 6% gain or 11% gain. If it does not happen in 90 days - throw them into the existing holdings. And I'd only do this 1 or 2 times a year.

    Good signals for me are 3 month and 52 week lows with a history of bouncing back and steady dividends.
    traineeinvestor likes this.

  7. #7

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    As a follow up to my previous post commenting on SammyLee's list of shares, here are a couple of HK listed companies I hold.

    Shun Tak (HK:242): This is the most recent addition to my portfolio. It sells at a big discount to NAV and I hope that a combination of the GBA and/or any reshuffling of interests in the Ho family's casino interests will provide a catalyst for re-rating the shares. The big discount to NAV + dividend yield (expected around 4% on my purchase price) provides some downside protection should my expectations prove wrong and with the dividend I'm effectively being paid while I wait for things to happen.

    AAStocks mentions that Citibank put a $4.25 price target on the shares which gives me some confidence that I am not going too far off the reservation with this one. The negatives are (i) the dividend history has been erratic and (ii) the underlying casino operation's licence is up for renewal in the next few years. I'm assuming the licence will be renewed. I've also considered the impact of the HK-Zhuhai-Macao bridge on the ferry business but absent any way of quantifying this, have assumed that any loss will be more or less offset by returns on their investment in the bridge itself.

    The share price has moved up a bit since I purchased so it's no longer as attractive as it was but I'm still holding.

    I mentioned in my previous post that I allow myself a very small allocation to speculative investments (small meaning that if I lost the lot it would affect only my ego rather than my life style). The only speculative position I have at the moment is Rosedale Hotel (HK:1189). The company has two assets - a small chain of hotels in HK and China and a pile of cash. The share price is currently $0.27 while the reported NAV is $2.60 (per last annual report) and slightly lower ($2.53) in the more recent interim report. The assets comprise mostly hotels and cash, no intangibles. Put differently, the company has a market cap of HK$213 million but shareholders funds of HK$2,006 million of which HK$1,795 million is cash.

    The negatives are that the company has lost money in each of the last three years, has admin costs which are far too high for company of this size (or for the nature of its business) and does not pay a dividend (in fact I have no expectation of it paying a dividend in the future).

    Notwithstanding the negatives, from where I'm sitting the discount to NAV is just too big to be ignored. I'm currently sitting on a loss - showing that just because something is cheap does not mean it can't become cheaper - but am still holding in the belief that the discount to NAV will narrow at some stage.

    STANDARD DISCLAIMER: It goes without saying that I am not a professional adviser, have no idea what I'm doing and anyone who takes anything I write as advice needs therapy.


  8. #8

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    be an activist, get them to wind down the business and distribute the cash to all shareholders ?
    >>> Rosedale.


  9. #9

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    Quote Originally Posted by freeier
    be an activist, get them to wind down the business and distribute the cash to all shareholders ?
    >>> Rosedale.
    That would be the best outcome for shareholders - and the share register is wide open (the substantial shareholders hold less than 25%). Might be a case for David Webb!

  10. #10

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    Nov 2014
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    Right now for HK and China, I'm only invested in long dated 2822 call options (no liquidity in 3188).

    Prefer not to invest in individual Asian stocks due to corporate government differences compared to US stocks. For example in one of the companies above, I think the idea of investing outside of a core competency isn't a big deal but the fact that it can easily do so without justification is concerning. Makes trying to understand the potential scenarios that could unfold that much more unpredictable.


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