| ZHONGPIN – INELASTIC TO ECONOMY, GROWS RAPIDLY – BUY |
12/15/2008 |
| Zhongpin (Nasdaq: HOGS) is a pork processing company, which processes 220,000 metric tons of pork and has an capacity of 391,000 metric tons annually. |
| SHANDA – UPWARD TREND IN Q3, ECONOMIC SLOWDOWN WILL NOT IMPACT, FAIRLY VALUED – HOLD |
12/1/2008 |
| We note that in China employees at EU and US companies generally do not work overtime during these end-of-the-year months in Q4, which leaves them more time for entertainment. |
| GIANT – WORSE THAN EXPECTED, SET TARGET AT BOOK VALUE –DOWNGRADE TO SELL FROM HOLD |
11/14/2008 |
| We believe GA is at least worth its book value, USD3.20, which is 46% lower than the market price. We lowered the rating to HOLD in our last report and now we are continuing to downgrade to SELL. |
| TENCENT – FILED LAWSUIT AGAINST FORMER EMPLOYEES FOR BREACH OF ANTI-COMPETITION AGREEMENT, HEALTHY B |
11/14/2008 |
| At a time of worldwide layoffs, Tencent sues ex-employees for breach of the anti-competition agreement – in contrast to a harsh “China Internet winter” prediction. |
| SINA – WILL SLOWDOWN IN Q4 AFTER OLYMPICS, BUT CAN GROW RAPIDLY IN 2009 – UPGRADE TO BUY |
11/13/2008 |
| We believe ad revenue will decline QOQ in 4Q08, because we assume the YOY growth will be back to the level in 2006 and 2007, about 40%, after the Olympic Games. |
| FOCUS MEDIA – PROBLEMS IN Q3 AND Q4, SIGNIFICANTLY OVERSOLD – BUY |
11/12/2008 |
| We set the target price at USD11.90, 48% higher than the market price, which is based on peer companies’ PEG. BUY. |
| NINE DRAGONS PAPER (1689.HK) – FORECAST MUCH LOWER BUT VALUATION HAS OVER-CORRECTED – BUY |
11/8/2008 |
| Nine Dragons (ND Paper) reported FH2’08 and F2008 results last week. Earnings were well below consensus and even below our expectations (which were well below consensus). EPS came in 32% below our forecast. |
| AIRMEDIA – OLYMPICS IMPACTED Q3, BUT WILL GROW RAPIDLY HEREAFTER – BUY |
11/7/2008 |
| AMCN’s revenue increased 13% QOQ in 3Q08, lower than 38% QOQ in 2Q08 due to the Olympic Games, during which AMCN could not broadcast non-Olympic sponsors’ ads in the Beijing Airport. |
| CHINA MERCHANTS BANK (3968.HK) – REASONABLE 3Q08 NET PROFIT GROWTH – BUY |
11/6/2008 |
| China Merchants Bank (CMB) reported a strong 90.6% and 49.5% YOY growth in net profit for the first three quarter and 3Q08. Nevertheless, 3Q08 QOQ net profit declined by 16.7% mainly due to higher interest cost and a decline in net fees in commission in 3Q08. |
| CHINA UNICOM – WEAK OPERATING DATA IN 3Q08 – SELL |
11/4/2008 |
| The market price reached our target in the last note, in which we downgraded CHU from HOLD to SELL. |
| SOHU – REVENUES WILL BE FLAT IN Q4, FAIRLY VALUED – HOLD |
11/2/2008 |
| We set the target price at USD46, about 8% higher than the market price, based on the peer P/E ratios in 2009. HOLD. |
| VISIONCHINA – STILL STRONG, BUT FAIRLY VALUED – HOLD |
10/31/2008 |
| Media industry has not slowed down with the economy in China – both TV stations and new media raised rate cards. |
| BAIDU – REVENUE GROWTH WILL SLOW DOWN – HOLD |
10/23/2008 |
| Baidu’s revenue grew 14% QOQ and 85% YOY in 3Q08, but we find slowdown signals embedded in the operating data. |
| CHINA MOBILE – 1-3Q08 RESULTS SAY GROWTH – BUY |
10/23/2008 |
| ‘Slowdown’ is the term most frequently mentioned when talking about the economy in China. However, we believe real GDP growth of 9.9% YOY in 1-3Q08 is much better than most other countries. |
| CHINA TELECOM – PHONE SUBSCRIBERS CONTINUE DECLINE, NEGATIVE IMPACT CONTINUES – HOLD |
10/21/2008 |
| CHA is going to spend more CAPEX on the newly acquired CDMA (Code Division Multiple Accesses) network in 2009, therefore, the free cash flow will decline. |
| CHINA ERATAT SPORTS FASHION – GROWTH STOCK PRICED NEAR CASH/SHARE OF S$0.08 – BUY |
10/20/2008 |
| China Eratat Sports Fashion Ltd (CESF) is a small but fast-growing sportswear company in China. |
| CHINA MOBILE – HIGH QUALITY GROWTH STOCK AT LOW VALUATIONS – BUY |
10/13/2008 |
| Time-series and cross-sectional P/E comparisons along with the free cash flow model suggest significant upside. Shares could double over 2-3 years. |
| BEIJING AIRPORT – HIGH RENTAL EXPENSES ACQUISITION IS COMPLETE – DOWNGRADE TO HOLD |
10/8/2008 |
| Revenue growth slowed down in 1H08 due to the changes in allocation of payments. |
| CHINA MOBILE – A VALUE PLAY ON HIGH-GROWTH CHINESE CELLULAR – BUY |
10/1/2008 |
| In 1H08, CHL experienced a blizzard in South China, an earthquake in Sichuan Province, and the roaming fee cut policy, but the Company’s revenue increased 18% YOY. |
| AIR CHINA – FUNDAMENTALLY STRONG, UNDER-VALUED – BUY |
9/26/2008 |
Air China is one of the three major airlines in China. The Company has the most extensive international route network among Chinese airlines, with 54% revenue generated from international and 46% from domestic market.
|
| CHINA EASTERN AIRLINE – LOW PROFITABILITY, HIGH LEVERAGE – SELL |
9/25/2008 |
China Eastern Airline is one of the three largest air carriers in China and is the primary air carrier serving Shanghai, China’s eastern gateway and largest city. At current stock price of USD18.78 per share, we believe the Company overvalued. We recommend SELL.
|
| AJISEN – MARGIN DOWN, BUT OVERSOLD – BUY |
9/24/2008 |
| Gross margin declined 1.2 percentage point YOY only, which means Ajisen can pass most raw material cost rises to consumers. |
| SINOTRANS – REVENUE GROWTH SLOWED DOWN, MARGIN DELCINED – DOWNGRADE TO SELL |
9/22/2008 |
| Revenue growth will slow down to 13% and 11% in 2008 and 2009 due to a pessimistic outlook on the Economy. |
| CHINA SOUTHERN AIRLINE – IMPROVED BUT RISKY – HOLD |
9/22/2008 |
China Southern Airline provides commercial airline services throughout China, Hong Kong and Macau regions, Southeast Asia and other parts of the world. At current stock price of USD16.81 per share, the stock does not provide safe purchase margin. We recommend HOLD.
|
| CHINA RAILWAY CONSTRUCTION – MARGIN IMPROVED AT PRICE OF NEGATIVE OPERATING CASH FLOW – HOLD |
9/9/2008 |
| We believe revenue will grow 10% YOY in 1H09, since new contract amount doubled, while backlog increased 20% during 1H08. |
| CHINA MERCHANTS BANK (3968.HK) – EXCELLENT1H08 RESULTS – BUY |
9/5/2008 |
Currently trading at 15.6x 2008 P/E and 4.3x P/BV, our target price represents upside potential of 35.4%.
|
| SHANDA – STABLE GROWTH, BUT WITH MARGIN PRESSURE – HOLD |
9/3/2008 |
| Revenue will increase as Shanda announced it will pipeline 11 MMORPG (Massive Multi-player Online Role Playing Games) and 6 Casual games. |
| CHINA MOBILE – STILL STRONG AFTER SNOW, EARTHQUAKE, AND FEE CHANGES – UPGRADE TO BUY |
9/2/2008 |
| CHL experienced a blizzard in South China, an earthquake in Sichuan Province, and a roaming fee cut, however, CHL’s revenue increased rapidly by 18% YOY in 1H08. |
| GIANT – CONTINGENCY IN ZT ONLINE CLASSIC EDITION – DOWNGRADE TO HOLD |
8/28/2008 |
| Based on peers’ P/E in 2009, we set the target price at USD10.53, about 9% higher than the market price. Downgrade to HOLD. |
| CHINA CONSTRUCTION BANK (939.HK) – SOLID 1H08 RESULTS – BUY |
8/25/2008 |
|
Our target price represents upside potential of 38.7%. Currently CCB is
trading at 13.8x 2008 P/E and 3.0x P/BV, respectively against sector
average 15.0x and 3.1x.
|
| CHINA UNICOM – 1H08 DATA NOT ENCOURAGING – SELL |
8/25/2008 |
| P/E 2009 suggests a downside of 21% and a target price of USD14. Downgrade to SELL. |
| FOCUS MEDIA – GOOD Q2, MARGIN WILL IMPROVE – BUY |
8/18/2008 |
|
FMCN made a profit of USD36 in 2Q08, compared to a loss of USD54 in 1Q08. Peer P/E ratios in 2009 suggest an upside of 65% and a target price of USD43.
|
| AIRMEDIA – ACCUMULATE BEFORE OLYMPIC GAMES CLOSES – BUY |
8/12/2008 |
| AIRMEDIA – ACCUMULATE BEFORE OLYMPIC GAMES CLOSES – BUY |
| VISION CHINA – INSIDER SALE MEANS FAIRLY VALUED, PEG SUGGESTS LIMITED UPSIDE – DOWNGRADE TO HOLD |
8/8/2008 |
| VISION CHINA – INSIDER SALE MEANS FAIRLY VALUED, PEG SUGGESTS LIMITED UPSIDE – DOWNGRADE TO HOLD |
| SINA – ACCELERATED TO GROW IN Q2, FAIRLY VALUED – HOLD |
8/7/2008 |
| SINA – ACCELERATED TO GROW IN Q2, FAIRLY VALUED – HOLD |
| SHANDA – SALARY RISE PRESSES MARGIN, FAIRLY VALUED – DOWNGRADE TO HOLD |
8/4/2008 |
| SHANDA – SALARY RISE PRESSES MARGIN, FAIRLY VALUED – DOWNGRADE TO HOLD |
| AIRMEDIA – WILL GROW RAPIDLY, UNDERVALUED – BUY |
8/1/2008 |
| AIRMEDIA – WILL GROW RAPIDLY, UNDERVALUED – BUY |
| SOHU – GOOD Q2, BUT FAIRLY VALUED – HOLD |
7/29/2008 |
| SOHU – GOOD Q2, BUT FAIRLY VALUED – HOLD |
| VISIONCHINA – WILL ACCELERATE TO GROW IN 3Q08 – BUY |
7/25/2008 |
| VISIONCHINA – WILL ACCELERATE TO GROW IN 3Q08 – BUY |
| BAIDU – GREW RAPIDLY IN 2Q08 – BUY |
7/24/2008 |
| BAIDU – GREW RAPIDLY IN 2Q08 – BUY |
|
