asianpunter trying his hand at equity research...

Rule no.1… BUY inside the early stages of a bull market.

Anthony Bolton, one of most famous investors in the UK, earlier this month…

Fidelity International's Bolton sees multi-year bull market, led by developing world

An equity bull? Under these economic conditions? Indeed, they do exist, Fidelity International President Anthony Bolton is one, and he has two words for the future: emerging markets.

"Low growth means low interest rates, and actually that's one of the best environments for stock-market investing," Bolton, who oversees about $141 billion, told Bloomberg News Tuesday. "Anything that can show growth in this low-growth environment is going to be bid up by investors. It's very pro the emerging-market world versus the developed world."

Bolton, who added that he sees a "multi-year" bull market in equities, is particularly fond of Chinese stocks because government policies will support sustained GDP growth there without re-heating China's inflation.

Rule no.2… bet on the man, not the machine (like Apple’s Steve Jobs or Henry Ford in the old days): Li Shufu: Chairman AND founder of Geely Automobile (biggest non-state owned car company in China).Li Shufu is already appearing in mainstream Western media. See below story… he is mentioned as one of THE FIVE main people who are personally changing the face of the global car industry.

Li Shufu
The chairman and founder of China’s biggest privately owned car firm is the self-styled Henry Ford of China.
Geely, alongside car makers such as Shanghai Automotive Industry Corporation and Beijing Automotive Import & Export Corporation, is leading the rise of the BRIC (Brazil, Russia, India and China) nations in the sector.
Ratan Tata’s Tata Motors has already snapped up Jaguar Land Rover, while in Russia Oleg Deripaska’s Gaz is involved with Opel, but 2009 has seen China overtake the US as the biggest car market in the world and globally its companies are the most prominent in attempting to link up with Western manufacturers. Geely has a tie-up with Manganese Bronze, the London taxi maker, and is eyeing a move for Volvo.
Geely has a relatively small presence in China, building just over 200,000 cars a year at present, but the company is growing at home and abroad.
Li Shufu’s ambitions for his Hong Kong-listed company were boosted in September when Goldman Sachs invested $334m, a vindication of the company’s potential.
Li is thought to be one of China’s richest businessmen and his ambition has often made him controversial in an industry dominated by state-businesses.
“Making cars is not as mysterious as people think,” he has said in the past. “A car is merely four wheels, a steering wheel and an engine. The level of technology used in manufacturing cars is very high. It seemed to me that I just needed to buy the technology and the parts, and pay for engineers.” http://www.telegraph.co.uk/finance/newsbysector/transport/6439487/The-five-people-who-really-make-the-wheels-turn-in-the-global-car-industry.html

Rule no.3… buy something that looks like a genuine company-specific growth story with reliable accounting to back this up.

Stock details: Geely (Hong Kong stock ticker code: 175) is now up 1,000%(0.25 HK dollar Oct-08 to 2.90 today) from the market lows late last year… but still is ONLY worth USD 2.7 billion, which is peanuts for a possible future global multinational car company. Also as listed in Hong Kong is much more transparent and reliable in accounting than other mainland Chinese only listed companies. HK listing additionally makes Geely stock more liquid for international investors.

Rule no.4… buy into an industry wide GROWTH story.
Now I hear you say CARS are a dying margin business globally because of too much competition and lower consumption levels in the West… TRUE, but NOT inside CHINA which became the world’s largest auto market (even bigger than the U.S.) this year for the first time. Also Geely is focusing very much on hybrid and fuel efficient cars… both inside China and for exporting to Global Emerging Markets (GEM) especially. Basically, Geely has GROWTH written all over it.

Icing on the stock pick cake…

Rule no.5… buy what GOLDMAN SACHS buy.

Goldman Sachs (one of best in the business for picking little known winners early in emerging markets) bought into Geely with a USD 334 million stake back in September 2008 pretty close to global market lows. Why where Goldman willing to punt SO AGGRESSIVELY at a totally unknown name in the car market…? …in the middle of a massive global sell off especially in car companies with GM going bankrupt etc.
Reason: Goldman knew something the market did not… Geely is a future global titan still in its infancy.

Bottom line: Ship some in boys & girls… How? Go and ask any HSBC bank branch globally about how you can buy Hong Kong stock code number 175 (Geely) through HSBC Hong Kong as your broker. Also can do smaller size easily with HSBC HK retail, do not have to bet the farm on this one. Buy some every now and again... then just stick it under your bed for the next 5-10 years.

Chase the Dragon...

        

i think geely is definately a good pick,    but theres a lot of hype on it at moment and would prefer it to settle.  but long term i like it.     I think there is becoming an interesting change in the stocks i would pick in China.  A bit like the internet the last few years has started to seperate the chalk from the cheese,  there are now some seriously viable chinese companies selling to china with a western mentality..   Geely, Ten cent, Ali baba etc...   i think these are the stocks that will take china forward.   Its interesting to note HK trades on a p.e ratio of 24 ish,  whereas shanghai trades around 33  making the china shares issued in HK seem very cheap...

a fact i dont think lost on chinas state investment fund....

Nice one koogle... Geely, Ten cent, Alibaba  I like all these and agree with you. The HK listing is also key... backed with the "Britishness" that still most certainly exists behind HK law, governance, transparency etc. Shanghai still a little too Wild Wild East for investing in their stockmarket - though that may well change in years to come - but I love the Hong Kong East-West half-way house as an access point into China.

By the way, Ten cent for those that have not heard of the company is the parent of QQ - China's largest social media company!

walking down the street in xiamen recently  the high street was like a western high street  but with solid Chinese brands...   brands you and i would never have heard of  ..  but same looking shop,  same big glass windows...  it could have been Nike,  Apple, M+S  etc   but it wasnt... these are the brand i think one should focus on.   the following article throws up a few names.   It was written 2006  but most of these local brands have only got stronger. Article here

Thanks for that!

Li Ning...   started by Chinese Olympic gymnast Li Ning..  more popular than nike and addidas   on the chinese highstreeet.    is a great example.

look familiar?

..actually its 'swoosh' is based upon its  L and N  initials   

Ah yes, Li Ning himself running around the top of the Bird's Nest stadium in Beijing! Imagine the CEO of Nike doing that... don't see it. Now this is a lesson in marketing for the West... Chinese style. No marketing copy cats here... pure creativity. Good to see from the Chinese...

The LN swoosh though... Nike can't be too impressed with that.

Neither were Adidas as they paid up massively to be "official" sportswear sponsor of the Beijing Olympics... only for the Chinese government to pick one of their own (Li Ning) to be THE highlight of the globally broadcast opening ceremony - as he ran around the top of the stadium suspended in the air... wearing his shoes! The Chinese later said this was NOT marketing. hahaha... Interesting though.

Article: Li Ning Ambushed Adidas at Beijing

When He Lit the Cauldron He Gave His Company Worldwide Publicity

China and Li Ning may have pulled off the greatest marketing ambush of all time when he was hoisted to the top of Bird's Nest Stadium to light the cauldron and open the 2008 Beijing Olympics.

Li Ning was an obvious choice for the honor of lighting the cauldron because he is one of China’s all-time greatest athletes, having won six medals at the 1984 Olympics.

But he also happens to head China’s largest sports retailing firm, a publicly traded company that he started and which still bears his name. That means he exposed his company to thousands of people at the stadium and to billions of television viewers when he carried the torch.

German-based Adidas, his closest competitor, was left to watch Li Ning steal the opening ceremony scene after it spent tens of millions of dollars to become a major Beijing Olympic sponsor. Li Ning's performance was kept a secret prior to the opening.
http://advertising.suite101.com/article.cfm/li_ning_ambushed_adidas_at_beijing#ixzz0VCLkEHPY

Note the measured response from Adidas though... they knew who was boss:

Adidas responded as a good sport. According to Yahoo.com, spokesman Jan Ruonan said Li Ning embodied "the dream of many Chinese: A child brought up in poverty who became a star and the nation's first millionaire athlete. He deserved to play that role."

best HSI perfomers YTD

Tencent,  Foxconn (Taiwanese - makes ipods, macs), Li and fung (china imp/export) citic pacific, china shenua, new world dev, aluminium corp of china, BOC

all western minded chinese companies

Back to stocks... 08/08/2008... On 8th day of the 8th month, 2008 - Beijing Olympics opening day (guess what the lucky number in China is?)...  Li Ning stock was 17 HKD... it's now 23 HKD or UP 35%. In exactly the same period Adidas in Germany has fallen from 43 euros to 33 euros or DOWN 23%.

now all we need is a sell off so i can buy some!...doh

hahaha indeed koogle!

someone just sent me an interesting article about whats known as the Hindenburg Omen    some may say these criteria have been matched presently...    tin hats anyone?

i see geely may be about to get its paws on volvo

chinese car manufacturers to learn a bit about safety... no bad thing!!