Best Hong Kong listed China stocks

[HKT]

A good article on Sijia here:

HK-listed Materials Giant SIJIA Gets Even Bigger

As stated earlier, Sijia is one of very few China stocks that meet our "Buffet" criteria, and its pretty much "unknown" to the general investment community.

Again, if you are looking to buy into a Hong Kong listed China stock that appears poised for strong growth in 2013, we would suggest giving this one serious consideration. We will be increasing our holding in this stock in Q1 of 2013.

 

[HKT]

What is the Hang Seng going to do tomorrow (2 January 2013)? Here's my guess - its going to rally!

The Hang Seng index closed the 2012 year at 22,675. Given the positive news that has come out of China in the interim, and also the "fiscal cliff" deal, we think the Hang Seng will break through 23,000 tomorrow.

Interestingly, whilst almost all analysts are picking the for Hang Seng to rise in 2013, most predictions are pretty conservative, in the 24500-26000 range. Our prediction, is that the Hang Seng will close between the 28,000-32000 range (the wide range being due to a whole range of possible things that might happen). But overall, we would expect a lot of money that has previously powered Hong Kong's property market to flow into stocks, especially in Q2-Q4 as confidence in Hong Kong stocks really starts to kick in.

 

[HKT]

Well, as we predicited, the Hang Seng broke through 23,000 today.

In afternoon trading it started over 500 points up at 23,161 and we expect it will see continued strength as the year progresses.

 

[Breakoutstocks]

I run a fund and have in the past been very successful (of course not perfect, but overall we have made the right "big calls" that have done us well, both on the upside as well as avoiding losses).

I am going to be posting up some stocks we are looking at, listed in Hong with a China business focus, with the view that China has bottomed and represents great upside opportunity.

In particular we focus on identifying smaller stocks, that for a range of reasons we believe are undervalued with significant upside based on all known and reported financial data and fundamentals.

Before I do that, does anyone here have any views, picks, tips they wish to share, either at a macro level (eg has China bottomed out?) as well as at a micro level (ie specific stocks).

Cheers - HKT

HKT, I would be very interested in what Chinese stock picks you come up with. Back in 2004, when Leihe Dairy, formally American Dairy (ADY), went public with a shell out of Utah, USA, I was asked to be an adviser for them. I helped the stock gain recognition here in the US, which in turn took the stock from $1.50 to $40 per share in 2 years. It was a great play and we all made a lot of money. So I have fond memories of the Chinese companies that are going public or that are public and under appreciated.

 

[petrusgazin]

ok HKT so I bought a small clip of Sijia yesterday to get the ball rolling, can you let me know how in depth is the research that you do on these stocks, do you do onshore due dillignece to back up the validity of the companies claims or are you relying on the companies accounts being accurate to a large degree ? ? I too think these china stocks could be the best play for 2013, however one must be very careful to avoid the fraud ridden stocks so I would be keen to know how close to the company you can get ...

 

[HKT]

Petru, what we do is first of all look at historical and current financials of compaies that we think, from a macro perspective are likely to do well. Once identified, we isolate companies that meet particular financial ratios that we look for (very similar to the factors Buffet looks at). Then we get a more holistic in further considering the company. We do media searches, Google searches, (not just on the company but on its management). We use webb-site.com for some data, bloomberg, Quamnet, etc. We are based in Asia and also check "on the ground". That means speaking to actual customers and people in the industry. It means visiting stores, sampling goods, speaking to sales staff, speaking to people in similar industries, and where possible also speaking to people in relavant Government departments and/or with Government connections. We do also try to speak to company management directly, both by phone, by email, and where possible visit in person. All of these factors ultimately play in a role in the small number of companies we identify to invest in.

We entirely agree with you - some of these China stocks have fraud issue, and even those listed on the Hong Kong (which are the ones we consider due to higher listing standards) are not immune. TO minimize this risk, we stay away from any company with management that has a bad history (or in some cases fake qualifications). Again, Webb-site.com has a wealth of resources here. We also closely examine any negitive or concerning news that might emerge about a company, and if it smells bad we exist quickly and move on. We also look at the company auditors and give preference to companies audited by one of the Big Four. Again, this does not render is immue to fraud, but its a variable we consider. Finally, we invest in a number of companies, not a single one. So, if we itentify say 10 companies that we expect to double this year, each with a 10% allocation, we might expect 2-3 to rocket up and more than tripple, some to double, some to remain flatish, and perhaps one dud, but overall still a very nice profitable gain on our total investment.

 

[dharmi]

Hello Everyone!

I'm looking for a stock screener for HK and Singapore stocks.

I use a desktop and daily candlesticks, so I don't need live feeds or apps/ smartphones.

Ideally I would like functions as good as stockcharts.com. Any suggestions?

 

[HKT]

Well, we are not at all day traders and pay little attention to candlesticks as we are value investors. However, to help you, for HK stocks you can use Quamnet.com.hk or aastocks.com.hk. Bloomberg and Yahoo finance also cover HK and Singapore stocks.

PS- we have had a very nice start with all of our picks rising nicely. Its still very early days, and we strongly reccomend people who want to make money in China stocks consider our picks.

 

[HKT]

China's General Administration of Customs announced that in 2012, the country's foreign trade import and export value rose 6.2% year-on--year to US$3.87 trillion. In particular, the exports rose 7.9% to US$2.05 trillion; imports rose 4.3% to US$1.82 trillion. The trade surplus rose 48.1% to US$231.1 billion.

In December, the exports rose 14.1% year-on-year, far better than estimates of 5%; imports rose 6% year-on-year, also better than estimates of 3.5%. The trade surplus rose 90% year-on-year to US$31.62 billion, higher than estimates of US$20 billion.

We expect our China stock picks to hit new highs this month.

 

[blomeyer]

Hi HKT,

thanks for the thread, really interesting to read.
Will you also let us know when the time for selling is ?

 

[HKT]

Hi HKT,

thanks for the thread, really interesting to read.
Will you also let us know when the time for selling is ?

Yes, of course. We have stated our price targets and outlook, so I would suggest selling as prices hit those targets. Now if conditions and circumstances change (both macro and in relation to specific companies) we might adjust our valuations (either up or down) but right now our out perform and buy reccomendations and what has happened since we made these are right on track. Don't be put off by the recent gains. This is the very beginning of a China stock recovery, and its still a great time to buy.

 

[HKT]

Some nice gains last few days for 300, 663, 1863.

We also had some existing holdings in 710 which is now starting to recover nicely. Indeed every single stock in our portfolio (except one) is in the positive which is a very nice position to be in!

 

[blomeyer]

ok, understand.

any other suggestions on stock, as i prefer to split my investment. ..

 

[HKT]

Well, yes with the China stocks we pick, we also suggest having a number, and not putting all eggs in one basket.

OK, so apart from what we have suggested so far, check out 904. We are researching it now, and so far it looks attractive to us.

 

[rustgal17]

Q3 2012 Earnings reported by Bank of China (HK Stock code 03988)

Bank of China (China's 4th largest bank) posted its biggest quarterly profit gain in a year, significantly beating estimates!

Net profit rose to 34.76 billion yuan (US$5.57 billion) in July-September from 29.8 billion yuan a year earlier. That compares with the average estimate of 32.7 billion yuan.

Net interest margin, which measures loan profitability, widened to 2.12 per cent at the end of September from 2.1 per cent at the end of June.

The earning report is a further confirmation China's recovery is underway.

Bank of China is the first of the so-called “Big Four” Chinese banks to report earnings for the third quarter, and its wider margins set a strong tone for its peers. We expect the stock, along with other Chinese bank stocks to rally tomorrow. We also expect a positive effect on the stock prices of insurance companies such as China Life.

Bank of China’s total loan book expanded about 9 per cent in January-September, pointing to rapid loan growth in the third quarter.

We believe the stock price of Bank of China will trend upwards and the China recovery gains speed. Our price target for Bank of China is $4.40 within 12 months.

Hi HKT -Thanks for this information. I am still holding on to this stock since 2 years and I brought it at around HK$3.70, really hoping it reaches your target price of HK$4.40.

 

[rustgal17]

A good article on Sijia here:

HK-listed Materials Giant SIJIA Gets Even Bigger

As stated earlier, Sijia is one of very few China stocks that meet our "Buffet" criteria, and its pretty much "unknown" to the general investment community.

Again, if you are looking to buy into a Hong Kong listed China stock that appears poised for strong growth in 2013, we would suggest giving this one serious consideration. We will be increasing our holding in this stock in Q1 of 2013.

Hi HKT - I am on Q at HK$1.75 for this stock. Hopefully I get it tomorrow when the market opens.

 

[rustgal17]

HKT - I am holding China Pharma (1093) and Dalian Port (2880) for over 2 years. I am still losing about 40 percent. Just wondering if I should continue to hold or let go as I see some small increase recently. Your kind advice is most appreciated.

 

[HKT]

We are very confident BOC (China) will hit 4.40 end of this year, as the benefits of China stimulus and a China asset recovery flow through to the banking sector. You can really observe the upward movement in recent weeks.

 

[HKT]

HKT - I am holding China Pharma (1093) and Dalian Port (2880) for over 2 years. I am still losing about 40 percent. Just wondering if I should continue to hold or let go as I see some small increase recently. Your kind advice is most appreciated.

From memory, one of our team looked at China Pharma, and for some reason we decided not to buy it. I will see if I can ask him about that tomorrow.

Again, from memory, we looked at Dalian Port and considered that relatively favourably. Its not in our portfolio at the moment though - I will check on it tomorrow.

 

[HKT]

POSITIVE PROFIT ALERT ISSUED FOR HISENSE KELON.

HISENSE KELON (00921.HK) expects to post 200% climb in FY NP
aNNOUNCED: 2013-01-16 17:18:37

HISENSE KELON (00921.HK) expects to post approximately 200% - 250% increase in net profit for the year 2012 to around RMB681 million - RMB795 million. Earnings per share is expected to be RMB0.5 - RMB0.59.

The increase in results was mainly attributable to the increase in the revenue for the second half of the year when compared with the corresponding period last year, continued increases in the gross profit margin, as well as relatively significant increases in non-recurring items such as transfer of equity in subsidiary in the fourth quarter.

We expect the stock to rally sharply in the coming days/weeks as this announcement is factored in the a revision on the stock's value and as institutional funds increase their holdings of this company.