China Ceramics Co. Ltd. (CCLTF)

[stocktrader2222]

wow just saw that block...interesting

[Traderfan]

Very nice block and overall volume so far today in the warrants. Would be great if we could get some attention for once. I guess the big block was some kind of hedge fund who learned about the story. Ok well it could have also been Fernando if he is bored.... LOL

[soulstealer]

200k buy block on CCLWF just now. Nice.

[redman_2014]

They do not yet qualify - email from CCLTF.


They have had discussions with Nasdaq in the past… they do not yet qualify. It is not possible to determine when they will qualify… but the company hopes to list before the end of the year.


Regards,

Ed Job, CFA

Cel: +(86) 1381-699-7314

[redman_2014]

I was surprised too, and sent an email Friday trying to get confirmation about whether they have actually filed or not, and if not, what criteria they presently have not met.

I will post as soon as I get a reply.

-Adam

[Traderfan]

That's indeed the best news in a long time if they really already applied. I'm just curious how they could do that without having the necessary shareholders.

[stocktrader2222]

Great news to here they already applied, now that makes CCLF, AERCF (supposedly has applied to) and WHJCF all applied to get on nasdaq...the time for all of them should be within the next few months lets hope

[redman_2014]

I've been emailing and getting responses from Ed Job. [e-mail]

I guess they have more than one guy assigned to the company.


-Adam

[GorillaGorilla]

Ah well, the rumour starts here...

If anyone wants to cotact CCG here's the guy.. you can find this information independently on a PR. Stock uplisting times may vary

Bryan Blake <[e-mail]>


rich

[redman_2014]

Rules are tightened for house purchase
By Hu Yuanyuan (China Daily)
Updated: 2010-04-16 07:44

BEIJING - The central government has raised the required downpayment for a family purchasing a second house from the existing 40 percent to 50 percent, as the latest measure to curb soaring property prices and prevent growing financial risks.

The decision was made during a State Council executive meeting presided over by Premier Wen Jiabao on Wednesday evening, showing the government's resolve to cool the sizzling real estate market.

Property prices in 70 of China's large and medium-sized cities rose 11.7 percent on a yearly basis in March, data from the National Bureau of Statistics (NBS) shows. It was the biggest year-on-year increase for a single month after the NBS expanded its coverage to 70 cities in July 2005.

According to the State Council's decision, the downpayment for a family's first home with an area bigger than 90 square meters should be at least 30 percent. And for the second apartment it should be at least 50 percent, with the mortgage rate 1.1 times the benchmark interest rate. Moreover, a much higher downpayment and mortgage rate will be adopted for the third home and above.
"Lending policy is the most effective way to curb the excessive property price growth in some cities," said Qin Xiaomei, chief researcher of Jones Lang LaSalle Beijing.

Along with skyrocketing property prices, the concern over an asset bubble and potential financial risks is also growing.

Liu Mingkang, chairman of the China Banking Regulatory Commission, said at the recently concluded Boao Forum for Asia that the banking system has plenty of ways to deal with risks arising from the property sector's downside pressure. He said some banks in Beijing have voluntarily raised downpayment ratios for second or multiple home purchases to 60 percent.

Meanwhile, the government also largely increased the supply of land, low-rent housing and economically affordable homes, aiming to improve the supply and demand imbalances.

The Ministry of Land and Resources announced on Thursday it would allocate 180,000 hectares of land to build residential housing, more than double last year.

"All these measures, if soundly implemented, will effectively prevent property prices in some cities from skyrocketing further. And a soft landing of the real estate market could be expected," said Qi Fan, an analyst with US real estate brokerage firm Century 21.

China Daily


-Adam

[redman_2014]

Interesting. I thought uplisting was still a ways away. I could see them having the paperwork filled out and ready, but he said 'applied' so hmm, very very interesting ;)

I don't know the answer as to whether the Transfer Agent would know about the number of shareholders. Probably as good a place as any to check.

-Adam

[redman_2014]

Government going to build 3M low-income apartments

BEIJING: China's housing authorities on Monday urged local governments to put more efforts into the building of low-income housing.

The national goal for 2010 is to build 3 million apartments for low-income families, renovate 2.8 million in urban shantytown areas, and expand renovation of dilapidated houses in rural areas, an unidentified official with the Ministry of Housing and Urban-Rural Development (MOHURD) told a teleconference.

The ministry urged governments at all levels to strictly implement preferential policies in land provision, funding, tax reduction and credit support for low-income housing projects, to ensure the realization of the annual construction goals.

MOHURD also called for efforts to curb the precipitous rise of housing prices in some cities by increasing the supply of small and medium-sized houses and to rein in the speculation on rising house prices.

-Adam

[GorillaGorilla]

IR emailed me:

"They have already applied, but the timing of approval from Nasdaq is uncertain."

Hmmm would you apply if you didn't have enough shareholders?

To find the number of shareholders what do you do? I was thinking the transfer agent might know?

Transfer Agent and Registrar

The Transfer Agent and Registrar for the shares of China Ceramics shares, warrants and units is Continental Stock Transfer & Trust Company, 17 Battery Place, New York, NY 10004, [phone].

From [1]

I've got no cash till NEP botheres to tell us there earnings. I have $2.50 options that are going to suck me dry of cash.

rich


[1] http://google.brand.edgar-online.com/DisplayFiling.aspx?TabIndex=2&FilingID=7124437&companyid=810829&ppu=%252fdefault.aspx%253fcompanyid%253d810829

[redman_2014]

Email from IR - Only 300 shareholders are needed


Just received a second email from IR:

The company only needs 300 shareholders to uplist to Nasdaq, not 400 as previously mentioned in some posts.


GorillaGorilla,

We think it's 100 shares to count as a shareholder, but not 100% sure. Fernando mentioned it.


-Adam

[GorillaGorilla]

What's the minimum shares I have to purchase to qualify as shareholder?

Is it 1 I ask innocently?

rich

[redman_2014]

CCLWF/CCLTF - Email from IR

1) We will try to collect the information regarding sales breakdown by region or city, if available.

2) The company will issue Q1 (preliminary) results, but the timing is not yet defined.

3) Yes, they have enough cash on hand and from operations to fund their capacity expansion in 2010.


Ed Job, CFA
Cel: +(86) 1381-699-7314


-Adam

[bUrRpPPP!]

ot DJSP/DJSPW is going to rock tomorrow.......foreclosure news is getting uglier by the week now...

[soulstealer]

No volume in most of china plays. This will get noticed when the sector gets its run. Watching $FXI for signals. Got some warrants yesterday. GL.

[redman_2014]

Ceramic Tile Removal

'One thing you can count on (besides death and taxes, of course) is that ceramic tile removal will never be an easy task. One of the deciding factors, however, between it being considered daunting and merely a pain in the neck job is whether or not it has been adhered to a cement backing board or directly to the wall or concrete floor. Anyone who has ever done this type of work will tell you the latter is much more difficult than the former.

If ceramic tile has been mortared directly to a wall, the entire wall most likely will have to be taken out or, in the case of a floor, an electric chipping hammer will be necessary to break it up in order to remove it. But if you're in luck and the tile has been attached with adhesive and grout to a board, the job remains difficult, but not nearly as difficult as it would be if it were adhered directly to concrete or drywall.

Never count on reusing tile after a ceramic tile removal job. You may be able to save a few of the pieces, but even if you do, removing the old adhesive makes the job so difficult as to render it neither time nor cost effective to do so. It's best to not bother trying to save the old tile you're removing. You'll be doing a big enough job as it is by just getting the stuff off the wall (or floor).

Remove Grout First, Then the Tile

If your ceramic tile removal job involves flooring, begin at an edge where carpet or hardwood, for instance, joins the tile. If removing it from a wall, begin where the edge of the tile work meets the rest of the wall. Start the process by first getting rid as much of the surrounding grout as possible.

You can do this by using a grout-softening agent (found at hardware stores or home improvement centers). Work in small areas of about two-feet square. After allowing the softener to work, you can use either a hammer and screwdriver to chip out the grout, or you can use something like an electric Dremel tool that has a special grinding wheel to help dig out and remove the grout.

Once you have the grout removed to at least halfway its original depth, you can now begin the ceramic tile removal using a putty knife and hammer. Slide the putty knife beneath a tile and then tap it lightly with the hammer. This may cause only one tile to come off or you may be fortunate enough for several tiles to come off at once. Continue softening and chipping out the grout and then removing the tile in this manner, working in small, two-foot areas, until all the tiles are taken off.

There's no getting around it, ceramic tile removal is a tedious, difficult job. But keep in mind that at least this is one job that (hopefully) won't have to be done again any time in the near future.'

------------------------------------------------------------------

This bodes well for China Ceramic when it comes to renovations and reconstructions in China since it's safe to assume majority of contractors do not reuse tile.


-Adam

[redman_2014]

Manhattan townhouses average $1,111 sq foot.

If my home was priced at that level it would be worth almost $2.5M, and well it definitely is not(probably 1/8th that price):(

And that's after a 31.9% haircut from it's peak of over $1450 sq foot. My home would be worth over $3.2M at that price :)

Manhattan property is so expensive because there are enough high-earning individuals around willing(and able) to pay those rates. And I'm sure many in the U.S. a few decades ago thought Manhattan was in a housing bubble when they saw the price climb ever higher. The same thing will happen to Beijing(and is happening). I think there is even a chance Beijing will eventually be even more expensive than Manhattan.

'The 2009 median sales price of a Manhattan townhouse, defined as a 1-5 family residence that can be delivered vacant, fell 31.9% from the record set in 2008 to $3,400,000 from $4,995,000. The other price indicators showed a consistent trend over the same period with average sales price falling 32% to $5,012,736 and price per square foot falling 31.2% to $1,111.'

Read more: http://www.businessinsider.com/manhattan-townhouses-now-priced-32-of-the-peak-2010-2#ixzz0l8xzEekS


-Adam


I will stop my diversion into housing and wages now. Sorry for the rants and multiple posts. Sometimes I get on a bit of a run and find it difficult to shut it off =0

[stocktrader2222]

already in 2 other warrants both not doing much for me at the moment either.

[kuwlness]

Never mentioned a china bubble ... it's non-existent imo.

I think we're a ways off from up-listing, they didnt seem to care much about the de-listing in the first place.

If you're impatient, you'd be better off buying some other warrants to hold you over ... maybe DJSPW or CHOPW will provide a better trading vehicle.

[redman_2014]

Precisely. Wages are going up by 10%+ a year.

'A new office trend has sprung up this year among Chinese white-collar workers involving the posting of photos of former Miss Hong Kong Li Jiaxin in their offices and making her picture their computer desktop image.

It is not that they are necessarily infatuated with her beauty. Rather, it is a humorous way of reminding their bosses about salary increases because the pronunciation of Jiaxin is the same as the Chinese phrase for pay rise.

There are also millions of teacups on sale imprinted with the slogan "I need a salary increase" at Taobao.com, Chinese largest e-shopping site. Many white-collar workers have placed them prominently on their desks or take them to meetings with their bosses.

Song Xi, a 27-year-old analyst working in Shanghai, said: "Of course, it is just a way that young Chinese - including me - are entertaining themselves. Most bosses still retain a distant look.

"I have been working at this consultancy for four years. In 2009, for the first time, I didn't get any salary increase. It used to be a 10 to 15 percent rise every year."

According to a recent survey by Zhaopin.com, a human resource service firm based in Beijing, around 66.3 percent of 6,000 respondents didn't get any increase in their salary in 2009.

The financial crisis placed a big burden on Chinese white-collar workers. About 41.1 percent of the survey respondents felt very unsatisfied with their salary in 2009 and 21.7 percent of them said that a pay rise was their top expectation this year.

Wang Haoshu is a 26-year-old magazine editor based in Xiamen, Fujian province. He said: "A 7,000 yuan monthly salary seems to be fair for people with only three years of working experience. But I feel compelled to complain about my salary, which hasn't risen over the past year, because of the rocketing house prices. I hope my salary catches up with the growth of house prices. I'm willing to work overtime or burn the midnight oil for a better salary."

The results of an investigation by All-China Federation of Trade Unions (ACFTU) showed that based on analysis of the annual reports of listed companies, at 208 State-owned enterprises, incomes of front-line employees are 18 times lower than top executives. More than 23 percent of employees didn't get any increase in their salary in the past five years.

Wang Wei, 29, has been working for a State-owned manufacturing enterprise in Beijing for five years. "Fortunately, we routinely get salary increases that basically depend on length of service," he said. "Every year I get hundreds of yuan more, but it is really little better than nothing."

According to official statistics, China's gross domestic product (GDP) grew at an annual rate of 10.13 percent from 2002 to 2009. However, the inflation-adjusted income of Chinese employees only grew 8.18 percent annually over the same period.

Zhang Shiping, an ACFTU official and a member of the National Committee of Chinese People's Political Consultative Conference (CPPCC), said during the CPPCC annual meeting in Beijing last month that rises in property and commodity prices have led to a decline in quality of life for some Chinese employees.

More than half of the Zhaopin.com survey respondents said they would look for another job if their salary remained unchanged in 2010.

Li Chunjiang, a 29-year-old trip planner at a State-owned travel agency, said: "I will quit my job if I don't get any rise in my salary because it is unfair to a hard-working employee like me who hasn't had any cash bonus in two years."

He said his 52-year-old mother, who works at a kindergarten, earned 200 yuan more a month compared with last year.

"I can understand that my company encountered many difficulties during the financial tsunami, but to receive no salary increase actually affected my work performance and has made me very depressed," Li said.

Senior human resource consultants of Zhaopin.com said Chinese people always take the time after the Spring Festival holiday to start thinking seriously about their career.

They said the potential for career development should be a key factor when people are deciding whether to work for a company or not, rather than salary.

Feng Huichao at Horizon Group said frequent small-scale bonuses or increases in salary based on performance was much more effective in encouraging employees and retaining talent.

In addition to the money, Wang Shuili of Horizon Group wrote in a report that corporate managers should try to encourage staff in many other simple but considerate ways, such as offering praise in public or a note of thanks. Such gestures are deemed to boost work efficiency and performance, he said.

A survey by international human resource firm Hudson, found that because of the global economic recovery, about 64 percent of companies it polled were willing to pay a 10 percent higher salary than the previous post afforded to lure talented managers and 24 percent were willing to pay 20 percent more.

More than 1,500 key human resources personnel, mostly at international businesses, were polled in the survey.

Thanks to China's stimulus plans for domestic consumption, more than 82 percent of polled companies in the consumer goods sector will increase salaries by more than 10 percent. Only 1 percent of polled enterprises in banking and financing said they wouldn't raise salaries.'


-Adam

[redman_2014]

You are right, the low volume and liquidity could very well be a significant reason for our current low pps, but you are wrong about uplisting. They just put some independent directors on their board and I think the only thing they are waiting on is a shareholder count of 400 before qualifying for uplisting. It only takes 100 shares to be considered a shareholder so the count could go up rather quickly on very low volume.

Fundamentals will always matter in the long-run, and fundamentals are also what give me the confidence to increase my warrant position tomorrow if it is still below $1.40. Cheap quality stocks don't stay cheap for long because eventually the investing community finds them and bids them higher.


The main problem is we are early to the party, and patience is required until everyone else shows up. Punch anyone ;)


-Adam

[stocktrader2222]

I didn't say shares, I said shareholders, they need to meet a certain requirement to uplist to nasdaq.....all im saying is stop the talk about the china housing debacle...that not even close to why the warrants are sliding and commons arent price right

[Drexion2004]

Overall housing prices in China increased by what, 11% or so in 2009? It seems high but it just so happens that the average wage in China in 2009 also increased by around 11-13% (Wage increases have tended to fluctuate between 10-20% per year for many years now).

It certainly doesn't seem that housing prices, as a whole for the country, have been outgrowing the purchasing-power increase of the Chinese people.

Given the influx of new rural people into the larger cities, it would be expected that demand in those locations would be higher, thus skewing supply/demand balances, and the property price increases in those locations would be greater than the overall nation-wide wage increase. Certainly, over the long term, these cities cannot keep having their property prices increase at a faster rate than say what the top 10-20% in wage-increases are getting...Otherwise the propeties would eventually price themselves out of a market. My point being, these cities could have their housing prices continually grow at a *somewhat* above-wage-national-increase-average and still remain sustainable...As long as the growth rate does not exceed the wage-increase percentages of the 'top wage growers'.

God I babbled alot there. Hope some of it makes sense.

-Fernando

[kuwlness]

"Super-low shareholder count" -- Do you have any idea how many shares Goldman Sachs owns?

You should look back to November to refresh your memory.

[stocktrader2222]

When will you guys get over the fact that investors arent concerned with the underlying fundamnetals...but the fact that there are no investors, no liquidity, crazy spread, no uplisting, super low shareholder count....thats why this stock is stuck, if management wants to maximize share price they will find ways to change the variables i just mentioned.

[redman_2014]

The affordability of housing in China

One chart shows the number of years of income it would take to buy a 100 square-meter apartment(1076 sq feet). Beijing is quite a bit worse than most cities in China.

http://sg.wsj.net/public/resources/images/AI-BA061A_CHINA_NS_20100120142425.gif


-Adam

[redman_2014]

U.S Housing Chart 1890-2008

From 1970's to 2007 the average U.S. nominal home price went from $25,000 to almost $250,000, nearly 10x greater. Even after the collapse it's still 7x greater. The inflation-adjusted increase is very little in comparison. I think people forget that inflation in China is higher than it is here and that needs to be accounted for when looking at price increases.

http://mysite.verizon.net/vzeqrguz/housingbubble/united_states_1890-2007.png


-Adam

[redman_2014]

Property Sales Tax - just found this.

'There is a tax of 3% on the sale of a property in China within 5 years time of its purchase (recently raised from 2 years, which itself was a new policy)'


This policy should partly help deter flippers. 3% isn't a lot but it's still a tax hit.


-Adam

[redman_2014]

Good article about housing in China

Fi posted this on the CGS board. Has some good logical statistics about why the bubble might not be a bubble at all.

Here are a couple excerpts:

'Leverage is also an important indicator in judging how susceptible a housing market is to growing into a bubble. The chart below, also from BCA Research, shows debt as a percentage of disposable income in China and in a number of developed-market countries. More than half of the developed countries had debt in excess of income, with Denmark and Ireland pushing 200%. China is at the far other end, with (personal) debt totaling just 44% of disposable income. Furthermore, homebuyers in China put down at least 20% as a down payment (30% for a first-time buyer and 40% for a second-home buyer to damp down speculation). These buyers rarely fall behind on their mortgage payments.'

'For example, the government's "second mortgage rule" requiring much higher down payments is having some effect – in January, price appreciation rose less than 1% month-over-month, down from a 2.1% jump in December. The government has also ordered that developers build more economical homes.'

http://www.stockhouse.com/Columnists/2010/Apr/14/No-housing-bubble-in-China


-Adam

[systrader]

Supply and Demand

Nice article but you have to wonder, how much demand is driven by investors, just like what happened here?

From 2001 to 2006, everyone in the US was buying homes to rent or have vacation homes because the market kept going up. This wasn't real demand. It was driven by investors.

I feel the same thing is happening over there. Yes, there may be limited supply of housing, but it may be because people are buying 2-3 at a time and flipping them just like they did here or holding on to them for a year or two so they can resell them at a higher price. Eventually it will catch up with them unless they can slow things down dramatically.

I think as investors, we really need the company to uplist to the NASDAQ as soon as possible to get this moving on the right track and get the PPS to be fairly valued.

[throwerw]

Also, much lower SG&A make CCLTF's net margins way bigger than MHK's to begin with.

Do you have any idea what the average lifespan is of one of their production lines?

[redman_2014]

Thanks for the info about MHK. China is also still building sub-standard dwellings so renovations and reconsructions will occur with higher frequency than in developed countries. That's bodes well for China Ceramics because I don't think you can reuse tiles very easily due to the adhesiveness of the plaster on the backside of the tile. The company is also at max capacity even with the new facility(existing production lines) and are expecting 30% growth, so a 25% reduction in business means they will still grow 5%/year. So I agree a PE of 3(coupled with the growth rate) gives a huge margin of safety in my opinion. Others will obviously disagree.


Flimsy new buildings have little appeal
(China Daily)
Updated: 2010-04-12 08:21

Problems with construction quality of buildings are a more critical issue for Beijing's real estate market than high prices.

"China builds the largest number of new buildings every year, but they will only stand for 25 to 30 years," Qiu Baoxing, vice-minister of Housing and Urban-rural Development Administration, said at a recent international forum on green and energy-efficient buildings.

The growth in China's real estate market has not been accompanied by an increase in quality. There are more quality problems now than 20 or 30 years ago, he said.

Guo Fan bought a brand-new apartment in Changping district in 2003 with her husband before they got married. But only six years after moving in, the 30-year-old young professional is considering selling.

"We found some cracks in the living room walls the second year we moved in, and the sound insulation is very bad," she said.

During the rainy season Guo and her husband have to put newspapers and old clothes on their floor to absorb the rainwater.

"We call the real estate company every year to fix the problems, but they never have a once-and-for-all solution," Guo said.

"They told us that these are not big quality problems, but we don't want to wait until the building falls apart," she added.

As the house price has almost tripled in the past six years, Guo said it is a good time to sell and then buy another second-hand apartment which is older but with a better quality.

Guo used to live with her parents in Fengtai district in a two-bedroom apartment, which was built by Guo's father's company in the late 1980s, under the welfare-oriented housing distribution system.

"My parent's apartment was built almost 30 years ago. It looks a little dark and dirty now, but there are fewer cracks in the walls, and it never leaks. What a shame that we spent so much money on such a low quality property," she said.

Zhao Yanrong


-Adam

[throwerw]

I'm looking through the most recent 10-K for MHK, which has a ceramic tile segment... 2009 sales are down about 25% from their 2007 highs.

So even if there is a real estate bubble in certain areas of the country, and it pops, it's not like construction halts all across the country. There is still a lot of rebuilding going on in the Sichuan earthquake zone, there was another earthquake today in Qinghai, and there are always old buildings going down and new buildings going up. CCLTF would most likely remain profitable through a downturn. I think a PE of 3 is a pretty wide margin of safety here.

[saltvine_00]

are the ceramics primarily for outdoor sales? Would be interesting if housing prices came down and people actually started moving into the 'empty' houses and furnished them with tiles in their bathrooms etc!

[redman_2014]

Beijingers richer but unhappier
By Ou Lu (China Daily)
Updated: 2010-04-01 07:50

Burden of maintaining living standard leaves some members of the middle class disillusioned

The tens of thousands of Beijingers who are part of the city's growing middle class are developing ever higher expectations in terms of their standard of living, but reaching and maintaining these standards is sucking the joy out of life for an increasing number of them.

Few would doubt that with an annual income of 500,000 yuan ($73,206) Liu Chunhua has the means to lead a privileged life in Beijing. However there aren't many traces of affluence at her home.

The 39-year-old is the CFO of a World Top 500 company's Beijing office. Despite being paid handsomely, she says she still feels she is not rich enough to indulge in a lavish lifestyle just yet.


She uses the majority of her income to pay for the mortgage and maintenance of the seven apartments she had bought in Beijing.

"I have to save to pay the mortgages off," she said.

During weekdays her family stays in a 50-square-meter apartment in Xicheng district, close to one of the city's best primary schools, which her son attends. On the weekends they stay in a bigger apartment in the suburbs, to enjoy a little bit more luxury.

The market prices of Liu's apartments more than tripled during the past few years' real estate boom in Beijing. Selling a few of her apartments would make her a millionaire several times over. But she is apprehensive about such a move.

Reflecting on the reasons she can't simply be a happy-go-lucky middle class professional woman, Liu concludes that she feels she must continuing working hard and saving as much as possible to secure a good life after retirement, to pay her parents' expensive medical bills and, most importantly, to help her son get the best education available.
"The biggest reason for me to keep saving is to ensure a good future for my kid and I believe that's what most Chinese middle-class families are doing," she said.
Liu said she has already been putting money away to send her son to study abroad after he graduates from high school.

"It might cost more than 200,000 yuan for a year's tuition, so I have to save at least 1 million yuan for him," she said.

She says another reason for her anxiety is that she never feels secure in her job.

Last year when the world economy was hit hard by the global financial crisis, she was unemployed for almost a year, living on the rents she collected from tenants.

"I was able to support my family with that money, but I want to save more in case it happens again. It wasn't a great situation - I was so busying looking for a new job that I had almost no time for my family," she said.

Although Liu is not the only breadwinner for her family, her husband, who works in the government, is not as well paid as she is.

Liu's feelings coincide with those of a survey published recently by insurance company Manulife-Sinochem. According to the survey middle class families in the most prosperous regions in China, such as Beijing, Shanghai and Shenzhen, are some of the least happy in China because of the unbearable economic pressures they face and the small amount of time they spend with family members.

But Liu's life isn't all stress and unhappiness - she recently indulged a bit and bought a villa in Daxing district with a yard in front, saying she's always had the quintessential urban dream of owning a house in the country.

"I'd love to live in a place like that when we retire," Liu said, with a beaming smile on her face.

"I'm already counting down the years until my retirement," she added.

Unlike Liu, who says she is a bit confused about her position in the social echelons, 36-year-old Wang Xin, a middle-ranking office worker at a state-owned company in Beijing, know exactly where he fits.

He calls himself pre-middle class and said he will likely become a real member of the middle class after he turns 40.

Wang said he totally disagrees with a report by Lu Xueyi, a renowned sociologist at the Chinese Academy of Social Sciences, which said that China's middle class now comprises 23 percent of its 1.3 billion population.

Though definitions for middle class vary in China, many hold that middle class families should have household incomes of at least $10,000 a year, own an apartment and a car, eat out often and travel on vacations.

"There are simply not that many people in this country who belong to this privileged group," Wang said.

Wang owns two apartments in Beijing, both bought with loans, and an investment portfolio worth 2 million yuan, but said he still doesn't think he qualifies as middle class yet.

"Genuine members of the middle class are those with the money as well as other resources, such as leisure time, to maintain a certain lifestyle," he said.

"But many of my friends who make decent salaries at big multinational companies dare not buy whatever they like and make any mistakes at work," he said. "These people aren't genuinely in the middle class, because if they lose their jobs, they will immediately be poor."

Wang said even his friends who make enough money to not worry about being unemployed for a while don't have the leisure time that is a hallmark of middle class families in the West.

One of Wang's friends makes more than 700,000 yuan per year as a sales manager but still "lives like a dog," he said.

"In the past few years this friend's sales quota was 20 million yuan, but this year it surged to 200 million yuan, " said Wang. "He doesn't have any time left for fun."

It feels like a never never-ending struggle to keep from falling behind, Wang said.

He said his criteria for being genuinely middle class includes having enough time to be with family and to travel abroad during vacations, as well as having enough money to be able to donate to charitable causes and to take care of his health.

Wang said his definition of middle class life is that depicted on Desperate Housewives, an American television comedy-drama series popular with the well-educated young professionals in China - owning a big house surrounded by green lawns and beautiful flowers and having plenty of leisure time.

"So many Chinese are still struggling to get richer," said Wang. "We simply don't have enough time to fulfill our other needs."

-----------------------------------------------------------------

I thought this was an interesting article about the mind-set of a middle-class Beijing resident.


-Adam

[GorillaGorilla]

Hmm.. intersting read...

I'm happy now about the supply demand... so we could see the prices fall naturally next year anyway. Also means that fewer will get burnt.

I also like the fact that all builders aren't overextended.

According to a questionnaire conducted by Homelink Real Estate during the spring fair, 70 percent out of the 200 respondents believed the price of Beijing real estate would keep climbing and the jump will be from 30 percent to 50 percent this year.

Talk about a self selecting sample! The people coming to the fair want to buy, doh!

It's not trivial, this

rich

[redman_2014]

Article about lack of supply.

Demand for new properties outstrips supply at home fair
By Meng Jing (China Daily)
Updated: 2010-04-13 09:37

Local sales of apartments at the Beijing Spring Real Estate Trade Fair are down by 30 percent compared with last year's event due to low supply, property agencies said.

Statistics from the organizing committee of the spring fair, which is one of the key indicators of China's real estate market, showed that 1,244 apartments in Beijing were sold during the four-day event that closed on Sunday.

In 2009, that figure was 1,812. Property agencies in Beijing blamed the decrease in sales on the lack of available apartments in the city.

Li Wenjie, Centaline Property, North China general manager, said the average house price in Beijing was 21,164 yuan per sq m at this year's spring fair compared with 11,566 yuan per sq m last year.

"Though fewer apartments were sold during this Spring Fair, the average house price is getting higher and higher, because the supply of Beijing apartments is decreasing," Li told METRO on Monday.

"People cannot find enough apartments to buy so their choice is shrinking. It is not because there is a reduced demand for apartments," he said.

Li said as more high-priced residential land in the city becomes available, the future of house prices will become clearer.

"We think the price will continue to climb this year, because all the apartments built in 2009 have been sold. Now buyers are rushing to the secondhand market," he said, pointing out that 8,745 secondhand apartments were sold during the first 10 days of April, a jump of 32 percent comparing with same time last year.

Homelink Real Estate, a major property agency in Beijing, echoed Li's statements.

"Fewer apartments in Beijing led to the drop in sales at this fair," said Zhang Yue, a market analyst from Homelink Real Estate, adding that less than 60 property projects, out of an overall 150 shown at the fair, were from Beijing.

Homelink Real Estate sold 413 secondhand apartments during the event, which was a new record for the company. "The average price of the secondhand apartments in Beijing that we sold at this fair exceeded 20,000 yuan per sq m," Zhang said. She believed the price would continue to climb due to the low supply and the increasing demand for secondhand properties

People's confidence in the real estate market is another reason why prices are escalating.

According to a questionnaire conducted by Homelink Real Estate during the spring fair, 70 percent out of the 200 respondents believed the price of Beijing real estate would keep climbing and the jump will be from 30 percent to 50 percent this year.

http://www.chinadaily.com.cn/metro/2010-04/13/content_9721223.htm

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A 100% increase in the price/sq M in one year is huge, but a lack of supply is a legitimate reason for increased pricing. Think of a multi-million dollar oceanfront property compared to a average small-town mid-western property. There will be a difference in price of 20x to 30x or more between the two, and scarcity of supply is a major reason. Prices cannot continue to rise as quick as they are, but it is understandable why the prices in Beijing and Shanghai are high(In 20-30 years Beijing will probably be the capital of the biggest country in the world both in terms of GDP and population.) That makes for a lot of millionaires, tens of millions to be exact, and a lot of people who can afford a hefty price tag for an apartment.

It sounds like a pricing bubble definitely exists due to the speed of increase alone, but many individuals buying apartments now may just be making a poor investment instead of something that will crush them financially. The prices may decrease in the short-term due to government intervention but over the long-term they will go up due to demand.

-Adam

[GorillaGorilla]

Yup, I don't pretend I'm thinking any different than that - it didn't help I just watched, quite by chance, that Chanos interview.

I have a 1/3 position but would go to full position if I can deal with by fears.

March numbers were up still [1] this was interesting quote from the piece that supply / demand was out of sync.

"Last year, some developers were skeptical about the price increases and cut back on construction starts until the fourth quarter, so there's no supply in the market," he said. "Whatever the developers are putting out, people are grabbing."


I've emailed IR about how much relies on new construction, uplisting and the bid ask spread and see what happens... I'll phone them tomorrow if no reply.

rich

[1] http://www.chinadaily.com.cn/business/2010-04/14/content_9728928.htm

[redman_2014]

I think this quote sums up perfectly what investors might be thinking, and what the Chinese government wants to avoid: "Fool me once shame on you, fool me twice shame on me"

The U.S. housing crisis is still very fresh in everyone's minds and any hint of a bubble sends everyone scurrying to safety because they would rather miss a great opportunity than risk the chance of looking like a fool.

But the Chinese government also doesn't not want to have egg on their face by not learning from the mistakes of the West. I'm sure if a bubble exists they will find a way to let the air out slowly. The way prices are appreciating it's possible a price bubble may exist in the Tier One cities but I doubt it extends much farther afield than that. And I don't think there is a supply glut at all such as the U.S. has. Here is an article from today about the government's intentions:


Reining in housing speculation in high-price cities
By Zhao Tingting (chinadaily.com.cn)
Updated: 2010-04-14 11:48

China will restrict housing speculation moves in cities with skyrocketing housing prices and insufficient supply, the National Business Daily reported Wednesday, citing an unidentified official with the Ministry of Housing and Urban-Rural Development (MOHURD).

Multiple and bulk home purchases will be restricted, the official said. The ministry also stressed that it would curb the alarming rise of housing prices in some cities.

More strict and differentiated credit and tax policies will be implemented to multiple home purchasers to rein in housing speculation, according to the official.

The ministry urged governments at all levels to support low-income housing construction.

The national goal for 2010 is to build 3 million apartments for low-income families, renovate 2.8 million in urban shantytown areas, and expand renovation of dilapidated houses in rural areas, said the official.

http://www.chinadaily.com.cn/business/2010-04/14/content_9728689.htm


-Adam

[stocktrader2222]

I don't see it being a problem at all, the company hasn't warned about it. You guys need to concentrate on why the spread is over $1, why there's no liquidity, how are we going to get uplisted, is CCLTF management interested in getting the stock price and warrants up, etc....

Once those things start happening then worry about the housing bubble, but CCLTF is expanding production, they dont see a collapse coming.

[saltvine_00]

The scare of a housing bubble probably is keeping this stock down. It even makes me second guess it. links like this don't help: http://www.beersteak.com/breaking-news/ordos-china-empty-city/

however I think even even mortgages on 2nd homes have to be 40% paid down. Chinese are using the housing as a way to save, instead of investing in financial markets which are not well developed yet.

Things probably will cool down, and hopefully will not collapse. In which case china ceramics will do just fine.

any thoughts?

[GorillaGorilla]

Uplisting will help, I agree. I'm happy to buy stocks with little liquidity if I'm convinved by the story - say China Redstone.

You know what the first question they get on the road show will be? How they handling the property bubble. The question is how much is it a perceived risk vs and actual risk?

I haven't read any good thoughts on that, yet. I'm guessing investors don't know either.

rich

[stocktrader2222]

None of what you're saying matters, did you see their earnings and guidance? What matters is this one has a huge huge spread, with 0 liquidity, and OTCBB listing, no one wants to touch it. The company needs to get an advisor that will get them uplisted, bring liquidity, and need to go on road shows etc...

[GorillaGorilla]

I guess the question is how much of their sales is to new properties? It feels more that there has to be a property crash or slump now.

Investing community needs a worse case / best case scenario. How will it handle the downturn? *shrug*

rich

[Traderfan]

This one is unreal. Can't believe that nobody is interested in the warrants at these levels. Some companies run after earnings with 100 times worse numbers and this one just stays flat or even went down since the earnings.

[GorillaGorilla]

I agree it's the housing bubble that has people worried. CCLTF only need what China needs which is more houses; ideally with tasteful ceramics.

If there is a property crash will the builders lose out and go bust? That's the crux - if they pass on the properties on completetion and don't hold a large inventory and don't overpay for land then they should be shielded from the worst of a price downturn. As long as they keep building were in the money.

Management need to map out a worst case scenario using contracts / retail sales or whatever. Certainly in China the property companies have lagged the rest of the market this year.

rich

[redman_2014]

Trailing PE of 5 takes us to $13.00.

At present price of $8.05:
PE of 2.74 using 8.9M shares(EPS of $2.94).
PE of 3.11 using fully diluted 10.1M shares(EPS of $2.59).

I think people are focusing too much on the supposed housing bubble and missing out on the fact that all of that negative news is fully baked in already. A PE of 3 is ridiculous. The company has been around for 17 years so it's not like they are a flash in the pan. They could have flat earnings in 2010 and still be dirt cheap.

A $13 stock price gives the warrants an intrinsic value of $5.50, or a 280% potential gain from todays price of $1.45.

I just might have to buy more if things keep going like this.


-Adam