| Focus Media - Short-seller Attacks are Wrong - Shares Rebound |
1/19/2012 |
After Muddy Waters' inaccurate accusations against FMCN, FMCN's share price plunged 27%. This custom report for a client correctly predicted a rebound in Focus Media shares.
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| HOLI - China Automated Controls Co Rebounds After Rail Safety Concerns Lessen - Undervalued |
1/19/2012 |
Train crash in July negatively impacted HOLI's stock price as signaling was blamed for the accident. Shares currently trade at below 10X P/E despite solid growth expected in revenues and earnings.
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| SOHU - Costs Up; Margins Squeezed - Some Value But Not Enough - HOLD |
1/10/2012 |
Recent trends have shown a strong increase in Sohu's sales and marketing expenses - lowering margins. Cross-sectional comparison suggests a target price of USD67, 24% above the current market price.
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| Huabao (0336.hk) - Analysis of Margin Trends and Industry Position for $1.7 bn Mkt-Cap HKG-listed Tobacco Flavoring Co. |
1/4/2012 |
We had a recent request to dig into HKG-listed tobacco-flavoring company Huabao as a potential short. One of our analysts in China interviewed two managers in the industry to clear up reasons behind extremely high margins along with waves of insider selling.
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| AutoNavi (AMAP)- Has Advantages Over Competitors in Both Auto Market And Mobile Internet Market |
1/3/2012 |
US-listed leader in the China mapping an auto navigation service has advantages over competitors in both the auto market and the mobile Internet market.
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| SINA - Upgrade from SELL to BUY - Oversold |
12/22/2011 |
Upgrading from SELL after 40%+ under performance in past 3 months. Sina is now at a price well below fair value. P/E band suggests upside of 30% for 2012.
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| BIDU - Strong Growth and Solid Outlook - BUY |
12/1/2011 |
BIDU continues to dominate China search and we believe they have an opportunity to raise prices and possibly widen margins going forward.
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| EDU - Rebuttal of Short Report - BUY |
12/1/2011 |
This rebuttal of a recent short report focused on EDU highlights the lack of credibility in the report.
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| JOBS - Upgrading to Buy After Underperformance With Solid Growth and Trends - BUY |
11/22/2011 |
Company is downsizing their low margin business, (ad print). We believe revenue growth will slow and margin will improve slightly in 2012. Historical valuation suggests a target price of USD55, 27% upside - BUY
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| Tencent - Slowing Growth But Lots of Cash Flow and Upside - BUY |
11/21/2011 |
Slowdown of revenue growth merely due to Tencent's large market share. Our recent survey of Internet brands and usage in China highlighted the strength of Tencent's brand and the stickiness of their QQ service. - BUY
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| LIWA - New Smelters Provide Upside and Growth - Special Dividends Should Quiet Some Critics - BUY |
11/17/2011 |
Market has been wrong about LIWA, there have been numerous unsubstantiated attacks on the company. Historical valuation for this chronically undervalued name suggests upside of 166%- BUY
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| CHL - $51 bn Cash; High Corporate Govenance; Return to Growth - BUY |
11/4/2011 |
Value added services will support revenue growth at 10% in 2011 and 2012. Margins to stabilize in 2012. High cash balance of $51 bn and high corporate governance score of 71/100 underpins our enthusiasm.
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| XRS - Leader in For-profit Math Education in China Grows Quickly - BUY |
11/4/2011 |
Aggressive expansion seen as positive strategic move and is necessary to contain potential competitors.
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| EDU - Plans to Raise Tuition Will Drive 2012 Growth and Margins - BUY |
11/1/2011 |
EDU plans to raise tuition fees by 10% in January 2012 and is promoting more small classes, which charge higher than normal classes. P/E bank suggests an upside of 32%, target price of USD40 - BUY
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| XRS - Strong Growth in Demand for Math Tutoring in China - BUY |
10/19/2011 |
Top part-time tutoring school for elementary school math in China with no significant competitor in the field. Peer and valuation history suggest upside of 93%- BUY
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| CHU - Reported Profits Largely due to Accounting Policy Change - SELL |
9/22/2011 |
Change in accounting policy results in net profits of RMB2.7bn compared to just RMB0.8bn without the change in accounting policy. Policy change suggests management has a lack of confidence in margin improvement.
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| SNDA - Core Gaming Business Shows Promise - Oversold - BUY |
9/19/2011 |
Market has over reacted to 2Q11 results and game business shows signs of recovery in 2Q11. Target Price USD42, upside 23%: BUY
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| China Telecom - Business Growing But Expensive Acquisition and Weak Governance - SELL |
9/6/2011 |
Acquisition of mobile network is a concern. A corporate governance score of just 50/100 is below the threshold level for poor corporate governance. Target Price of USD52 and a 20% downside. SELL
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| Tencent – Negatively Impacted By Sina's Microblog, Reduce Target From HKD300 To HKD280 – BUY |
9/2/2011 |
Game business is being negatively impacted by Sina's micro-blog. Tencent's revenue growth will continue to slow and operating margins are expected to be narrower. Reducing target price, upside of 52%- BUY
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| CHL - Over 50% Upside in this High-Quality Play on Chinese Tech - BUY |
8/31/2011 |
Value Added Service (VAS) revenues increased 19% YoY in 1H11 compared with 13% YoY in 1H10 due to popularity of Weibo, Sina's micro-blog service.
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| VISN - Volatile Trade in Chinese Ad - Could Double - BUY |
8/24/2011 |
VISN is a small-cap US-listed Chinese advertising company with bright prospects if their nascent turnaround continues.
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| Clear Media - Strong Growth - Below Tangible Book Value - BUY |
8/24/2011 |
Clear Media is the Hong Kong-listed arm of Clear Channel with outdoor advertising operations across China.
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| SOHU -Margin Pressure - Lowering Target Price As Tech Bubble Pops in China HOLD |
8/15/2011 |
Operating margin declined in 2Q11 as we expected. Declining operating margins seen in 2011 and 2012, we reduce target price from USD105 to USD78.
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| LIWA - Strong Results Will Eventually Outweigh Shoddy Analysis By Short-seller Abasaroka - BUY |
8/15/2011 |
Short-seller Abasaroka lacks material evidence (due to lack of on the ground knowledge in China) in accusations against LIWA. Growth rate of gross profits to accelerate in 2012 due to new construction of smelters.
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| BIDU - Customers Cutting Back - Heavy Investment Weighs on Returns - HOLD |
8/1/2011 |
Revenue growth to slow as Internet start-up advertisers using BIDU's offerings will not be able to survive competition.
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| EDU - Raising Estimates and Target for Leading For Education Company in China |
7/25/2011 |
Enrolment in "VIP" courses increased 73% in fiscal year ended May 2011 and VIP revenues increased 154%. P/E band suggests an upside of 29%. BUY
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| SINA - Overvalued and Weibo Brings Risks Rather Than Value - SELL |
7/12/2011 |
Weibo does not add value to Sina and raises risks, this is shown in the recent virus incident and corruption scandal. 36% downside - SELL
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| New World Dept Stores - Play on Chinese Consumer - Near-term Margin Pressure - BUY |
7/11/2011 |
Shopping mall operator in 17 cities throughout China. Expansion plan will press EPS in short term, but will be advantage in long term as commercial prices have been rising.
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| EDS – Expanding In Low-End Market, Under Book Value – BUY |
6/22/2011 |
Low-end apparel and footwear company set to benefit from expanding low-end market in China driven by increasing income inequality and significant inflation.
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| SHANDA INTERACTIVE – KU6 Layoff, A Good Start To Clean Up Unprofitable Non-Game Businesses – Upgrade To HOLD |
6/15/2011 |
150 salespeople dismissed in Ku6, this is viewed as a good start to cleaning up the unprofitable non-game business. Upgrade to HOLD
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| LIHUA Site Visit – Misunderstood Margins And Promising Copper Anode – BUY |
6/15/2011 |
Changing focus to copper anode from copper wire seen as correct strategy. Market misunderstands gross margin decline - BUY
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| ALIBABA – Neglected Internet Giant During Chinese Internet Boom, Price Can Double – BUY |
6/15/2011 |
Alibaba has been ignored during the Chinese Internet boom trading at the lowest P/E for 2011 among the big two players Baidu and Tencent. Three year P/E band suggests upside of 96% for the end of 2011- BUY
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| SINA - Micro-blog Service Boosts Profile But Adds to Costs - SELL |
5/27/2011 |
Sina's advertising business in benefiting from the Chinese internet boom. Sina tried posting ad banners on its Weibo site, the effort ended in failure.
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| SOHU - Dragged Higher by Chinese Internet Boom - Upside Limited - HOLD |
5/27/2011 |
Chinese Tech Media Telecom bubble benefits Sohu's ad business. Marketing expenses, newly acquired game company and expansion of unprofitable micro-blog business decrease operating margin.
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| JOBS - Strong Fundamentals but Slower Outlook - SELL |
5/27/2011 |
Market ignores impact of Baidu's newly launched recruitment channel. Jobs to spend more on competing with Baidu's marketing campaign.
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| Tencent (0700.hk) - Solid Corporate Governance and Outlook - BUY |
5/27/2011 |
Continuous increase in ARPU combined with a leading position and relatively high corporate governance score. Upside of 38%.
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| VISN - Starting to Control Costs and Leverage Market Dominance - BUY |
5/27/2011 |
Risk has been reduced with a new offering that reduced debt-to-equity significantly. Due to a subway market share of near 100% VISN is re-negotiating content costs with TV channels.
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| HOGS - Inflation and Growth will Boost Margins - Upgrade to BUY |
5/27/2011 |
New capacity coupled with inflation set to raise revenues and stop the margin decline. Market has regained confidence since scandal involving banned chemical in pork products at competitor Shuanghui.
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| YMG Trading - A Play on Middle Class Consumption in China - BUY |
5/27/2011 |
As a middle class emerges in China conspicuous consumption of high-end garments is supported.
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| CHL - Strong Market Position and Governance - BUY |
5/16/2011 |
China Mobile has an enviable position in China as the price war in 2G cellular abates. Solid corporate governance.
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