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Solar: Italian Market Soaring, Says iSuppli
We’ve heard some negative speculation today about the German market for solar panel technology installations. Now how about the brighter side?
Research firm iSuppli today said installations in Italy soared in Q4, doubling from Q3 to 975 megawatts of capacity, based on the firm’s interviews with “leading project developers and energy performance contractors” in the country. 2010’s total probably doubled to 1.9 gigawatts from 2009’s level, the projects.
Given projected caps in solar subsidies in France, the Czech Republic, and Spain, investors are “flocking” to Italy, where the feed-in tariff offers extremely attractive internal rates of return for solar projects of 15% to 18%, iSuppli’s analysis suggests.
Henning Wicht, iSuppli’s analyst on the case, says the market should be able to press on this year despite Italy’s own cuts in subsidies: a decline early this year following subsidy cuts “is set to last only weeks, rather than months, with the rate of new installations to rise rapidly again following this period.” High rates of return on investment will probably continue in Italy, propelling installations to one gigawatt per quarter in 2011, Wicht argues.
Copyright 2011 Dow Jones & Company, Inc. All Right
http://blogs.barrons.com/techtraderdaily/2011/01/03/solar-italian-market-soaring-says-isuppli/tab/print/
Thx
Squeezed to death
Short sellers have been attacking ad house China MediaExpress again after a scorching run-up in November. But despite the shorts piling on again, the media company's stock sits almost 30% below its 52-week high and it's trading for just six times forward earnings. Compared to Chinese rivals Focus Media at 17 times future profits and VisionChina Media (Nasdaq: VISN) at a nosebleed 232 times, they may have attacked the wrong ad house this time.
http://www.fool.com/investing/general/2011/01/03/do-the-shorts-know-something-you-dont.aspx
I have a question for the board about brokerage firms .
Is it true that only MM's can trade OTC, OTCBB and PINKS pre-market/after-hours ?
I do not have any experience with this. I have Ameritrade and can not buy these stocks pre and post market.
China has barred the PCAOB from inspecting Chinese based accounting firms (including the Big Four) on national sovereignty grounds. China has argued that the PCAOB should rely on Chinese regulators, yet Chinese regulators have assumed no responsibility for regulating accounting reports used overseas.
No matter who is auditing them Big 4 or not this sticking point could create a disaster . I am missing something here .
This is the scariest article i have read . If this picks up legs all US listed China stocks will be taken to the woodshed . All of the hit pieces , the Greenberg stuff is company specific but this could affect every China listed stock . Scary stuff . Am i reading this wrong ??
CGPI From another recent SA article 12-7-10
http://seekingalpha.com/article/241320-building-imbalances-in-china-not-appropriately-priced-by-market-stephen-taylor?source=yahoo
There are a lot of quality companies selling at very cheap prices; for example, we like Liandi Clean Technology Inc. (LNDT.OB), which provides software and control components that help clean up oil refineries and chemical plants. We also like Longwei Petroleum Investment Holding Ltd. (LPH) and Keyuan Petrochemicals Inc. (NASDAQ:KEYP), which is in the petrochemical and asphalt markets. Another is China Redstone Group Inc. (CGPI.OB), which is the only public operator of cemeteries and funeral homes in China. We like China Golf, a private company that is the third-largest operator and developer of golf courses in China, Oumei Real Estate, which is also private and China-Biotics Inc. (NASDAQ:CHBT), the largest manufacturer of probiotics in China.
RedChipNation Dave Gentry
Dave Gentry's appearance on CNBC's Strategy Session moved to Wednesday Jan. 5 @ 12:00 http://ping.fm/HoChg
think it was rescheduled to WED
This was a recent article on SA Re: CGPI
http://seekingalpha.com/article/242085-china-redstone-numbers-tracking-slightly-above-guidance
CGPI one of the last bargains available P/E under 3 fast grower . I continue to add here .
Unpopular Stocks Can Become Valuable New Friends: John Dorfman
Cancer Drugs
The final spot on the outliers list goes to Ariad Pharmaceuticals Inc., a Cambridge, Massachusetts, company working on small-molecule drugs to treat aggressive cancers. In May, Merck & Co. signed a licensing agreement to sell one of its drugs. Ariad sells for six times earnings.
http://www.bloomberg.com/news/2011-01-03/unpopular-stocks-can-be-valuable-new-friends-commentary-by-john-dorfman.html?cmpid=yhoo
Unpopular Stocks Can Become Valuable New Friends: John Dorfman
Cancer Drugs
The final spot on the outliers list goes to Ariad Pharmaceuticals Inc., a Cambridge, Massachusetts, company working on small-molecule drugs to treat aggressive cancers. In May, Merck & Co. signed a licensing agreement to sell one of its drugs. Ariad sells for six times earnings.
http://www.bloomberg.com/news/2011-01-03/unpopular-stocks-can-be-valuable-new-friends-commentary-by-john-dorfman.html?cmpid=yhoo
JANUARY 3, 2011
Wall Street Warms to China Story
By GREGORY ZUCKERMAN WSJ
Visiting China was considered an indulgence for most financial executives just a few years ago.
Journal Report
Read the complete Year-End Review report .
But when Berkshire Hathaway Inc.'s Warren Buffett, J.P. Morgan Chase & Co.'s James Dimon, Kohlberg Kravis Roberts & Co.'s Henry Kravis and Carlyle Group's David Rubenstein all visited China in recent months, the trips were seen as something else entirely: crucial steps to keep their respective companies growing.
China has been important to global economic growth for years, of course. The country likely emerged as the world's second-largest economy in 2010. It is expected to show close to 10% growth in both 2010 and 2011.
Until recently, however, China was something of a sideshow for many financial professionals. Global growth was key to China's health, and the country had an impact on many economies. But China didn't seem to matter much to most deal makers and wealth creators.
Agence France-Presse/Getty Images
Shanghai is no longer a sideshow for U.S. financial professionals.
That's all changing. China is opening its markets, slightly loosening the reins on its currency, and is emerging as a key to the future of almost every Wall Street firm. It's also a linchpin of the investment strategies of a growing number of hedge- and private-equity funds.
Consider that global initial public offerings of Chinese companies amounted to $104 billion in 2010, according to data-tracker Dealogic, up from $54 billion in 2009. Last year's tally amounts to $126 billion if Hong Kong companies are included, though it includes domestic markets not fully accessible to foreigners.
By comparison, less than $34 billion of U.S. IPOs took place in 2010, the second consecutive year that Chinese companies topped U.S. companies in IPO issuance. Bankers that didn't participate in Chinese IPOs risked seeing smaller bonuses. No Chinese investment bank has emerged as a global power, reducing alibis for not establishing a presence in deals available to foreigners.
Meanwhile, mergers-and-acquisitions specialists are racing to China to work with companies like China National Offshore Oil Corp., known as Cnooc, and China Petroleum & Chemical Corp., or Sinopec, among the biggest deal makers in 2010. Chinese companies completed 3,235 acquisitions valued at nearly $190 billion, or 9% of all global deals in 2010. That was more than any other nation except the U.S. and more than the $162 billion of deals by U.K.-based companies. China also was the second-most frequent target of purchases by foreign companies in 2010, after the U.S.
In currency markets, analysts say more traders are laying big bets on whether the yuan will be allowed to appreciate further in 2011. Stock-trading volume on Chinese and Hong Kong exchanges now rivals that of U.S. markets. And some strategists, such as Tobias Levkovich of Citigroup, view the Shanghai market as a leading indicator for U.S. shares.
The Chinese economy is expanding so quickly it's helping to offset stagnant growth elsewhere in the world for a growing number of companies. And Chinese demand increasingly drives global commodity prices and shares of commodity providers.
View Full Image
Reuters
Apartments rise in China's Hubei province late last year. The country's urbanization is seen as key to growth.
That all helps explain why some of the largest investors are boosting wagers on—and against—China. The bulls say power will continue to shift to developing makets from developed countries. They cite China as exhibit A of this trend, arguing there are more opportunities in China and elsewhere in Asia than in the U.S. or Europe.
Already, some of the hottest investments over the past year, including rare-earth shares like Molycorp Inc. and Rare Element Resources Ltd., get their mojo from tightening Chinese controls or rising demand in the country.
Daniel Arbess, who runs a hedge fund for Perella Weinberg Partners, has been profiting by buying shares of global companies helped by Chinese growth, a strategy he calls "Shake Hands With China," and betting against those having a hard time competing with Chinese rivals.
Mr. Arbess is focused on companies like Solutia Inc., Apple Inc. and Yum Brands Inc. that are growing quickly in China, as well as those that produce commodities in demand in China. For example, Yum, the owner of KFC, Pizza Hut and Taco Bell brands, saw same-store sales rise in each division for the first time since the end of 2008. China enjoyed a 6% gain, while the U.S. and other international locations posted 1% growth.
But many investors find it challenging to directly wager on China. Few companies have enough shares outstanding, or trade with sufficient activity, to make larger investors feel comfortable making a substantial investment. A relative lack of financial and regulatory transparency also is a hindrance.
A recent incident is a reminder of the need to be wary: China Gas Holdings Ltd., a large natural-gas distributor, announced in late December that two of its executives were escorted from the company's offices by people claiming to represent the Shenzhen Municipal Public Security Bureau. China Gas said it hadn't been able to get in touch with executives, nor has the company been told why the executives were detained.
The incident has flummoxed firms providing analytical coverage of China Gas. UBS, for instance, produces estimates of China Gas's results through 2013. But as of last week, the firm, along with investors, had no details about the executives, and told clients it wasn't sure if the incident would affect the company's operations. The matter hadn't been resolved as the year ended and the stock remains suspended from trading.
That's all part of the reason China also is the target of some of the biggest short-sellers, such as James Chanos, who runs hedge fund Kynikos Advisors.
The bears also point to China's expensive real-estate market and so-called ghost cities that relatively few inhabit, despite billions poured into them by Beijing. Mr. Chanos is shorting Chinese property companies based in Hong Kong, among other shares.
"Large-scale capital projects grow sillier by the day," Mr. Chanos said at a recent conference, in which he focused on what he called a "record lending spree in China" that is "fueling a speculative boom." Indeed, fixed-asset investment grew 23.5% last year, and is forecast to grow 20% this year; analysts say banks far exceeded China's central bank's cap on lending in 2010.
Meanwhile, many private-equity firms are racing to cut deals in China, to tap into the nation's growth—and to demonstrate to clients that they're capable of finding opportunities in China.
Mr. Kravis's KKR is putting the finishing touches on a $1 billion fund to invest in fast-growing companies in China, its first China-focused fund after several years of investing in China through broader funds. Rivals like TPG and Carlyle, which have long has been active in China, are stepping up activity. TPG recently announced plans to raise two Chinese currency-denominated funds, each sized at more than $700 million.
To be sure, a number of private-equity and hedge-fund chiefs privately share frustrations about China, even as they search for opportunities in the country. The rule of law is weak, some say, making it harder to resolve disputes. Others question the reliability of data published by private and public bodies, or aren't sure who controls Chinese companies, which usually are influenced by Chinese government officials.
Still other private-equity executives worry that assets in the eastern part of the country are so picked-over that they're heading to central and western hinterlands to find opportunities.
Some see this shift as a sign that these investors are embracing risk. Indeed, experts say it's even more difficult to obtain reliable data or gain influence over local businesses in these parts of China.
There's some rationale to the strategy, however. Although the eastern region has long dominated the country, central and western China surpassed the eastern region on most measures of economic growth in 2010, according to Nomura International, including gross-domestic-product growth, retail sales growth, export and imports.
"The western region's growth is accelerating, thanks to rising demand for and rapid development of resources and related industries," Nomura says.
At the same time, it's risky to bet against an economy with $2.6 trillion of foreign currency reserves and where the majority of the population is only beginning to fully urbanize and embrace higher standards of living, a trend likely to bring more investment opportunities.
The open question for 2011 and beyond is whether Chinese authorities can keep the country growing apace, even as they press the brakes on inflation, which is growing at a clip of more than 5%. Strong future growth may come only if Chinese leaders can transform the nation into a consumer-focused economy. But it may be hard to spark much more spending among a populace that has a relatively flimsy safety net, though the government is aiming to boost social welfare spending.
Whether Chinese development and growth can continue without major setbacks could be more important to global markets and financial firms than anything the Federal Reserve or European Union do in 2011.
"The transition to a consumer society in China represents the single biggest challenge for the global economy," says Perella Weinberg's Mr. Arbess, "and the biggest opportunity for markets."
Write to Gregory Zuckerman at gregory.zuckerman@wsj.com
Puda: Best of Coal Stocks
http://stocksandsectors.com/puda-best-of-coal-stocks/
Coal has been on a run, spiking up with oil, since both are used to produce energy. Demand for coal has been hot, especially from China, the world’s fastest growing economy and India, the world’s second fastest growing economy. Although China is trying to reduce its pollution by investing in green energy, its demand for coal likely won’t slow anytime soon. China still lacks the technology to massively produce green energy, and coal power plants are still by far much cheaper than any green power plant. And as oil continues to climb, coal will always be an alternative. Thus, China will still favor coal to meet its energy needs. India and other emerging markets such as Singapore and Malaysia are no exception to this, either. Coal will be in heavy demand in the developing world.
Coal may have less importance as an energy source in the developing world. Already, the percentage of total energy produced from coal has been declining. But coal is also needed for steel making. And steel, once thought to be a dying industry, will not go away. Buildings, bridges, cars, airplanes and ships all need steel. Thus, coal, believed by some to be a dying industry, may prove critics wrong again.
Below is a list of some coal miners attracting attention and statistics from Yahoo Finance.
China Expands Easing of Capital Controls on Exporters
WSJ
BY AARON BACK
BEIJING—China on Saturday eased capital controls on exporters' foreign-currency earnings, a move that over time could damp inflationary pressures and slow growth in the massive foreign-exchange reserves that have made Beijing a heavyweight global investor.
The move, an expansion of a program allowing exporters to keep their foreign-currency earnings overseas instead of changing them into yuan, was announced Friday. It could eventually ease pressure on the Chinese currency to appreciate by reducing demand for the yuan from exporters—although ultimately China's political leadership controls the exchange rate and the impact of such market forces is limited.
I think the Board is getting more looks for two reasons . First reason is all of the China bashing of US stocks has brought incredible mainstream attention to US listed China stocks .People came to see the train wreck . Starting last summer many clueless mainstream press journalists have taken to bashing these listings almost on a daily basis from Barron to CNBC . Are these guys investors ? No . They have no skin in the game . This attention has brought many pro investors and institutions to examine these companies and they are picking over the carcases . Number two is most US China shares are way up in the 4th quarter and this has led to increased eyeballs on this board . I have been following this board for a year . I recently joined Ihub premium because of this board and a premium Biotech board that i am fond of . My only core holdings right now are CGPI and CCME . I trade in and out of these stocks right now and look for fallen angels . I am up 40% since the lows and i am actually even on CGS for the year even though i started last Jan at the highs .I recently sold CKGT LPH SPU WKBT at considerable profit. I will try in get back in some of those names or others 10 to 20 % lower .I may miss a 30 % upside opportunity but i dont want to be down 50% ever again.In this space there is always s few stocks trading at an imbalance .Right now its CCME not because of valuation but because it is being valued like a risky US listed China stock . It is really much safer than all of the other stocks listed here and should receive a higher valuation. I consider myself extremely lucky and i have received a free education by watching your resident traders on this board even though i have over 20 years of investing experience and have worked for 3 brokerage firms in an investing advisory capacity. I think with the volatility i need to be nimble .
Excellent post !
2011 will be very volatile . We still have a lot of obstacles but the near term printing press will push the market up quickly in Jan Feb but then reality will set in . I do have to say that we are in better shape than when the Lehman crisis hit and the economy is getting better . The only problem in the US is the market is way up in the past year and will soar in the next few months due to Qe2 but a jobs recovery has been unusually absent . Its only because of Asia South America India and Russia that the world will do ok . You are right hard assets will do well . I think a soft commodity like sugar could double in 2011. I love all these pundits who think China will go south while the US will outperform . The US companies like Caterpillar are only doing well because of China and Brazil . If they go south look out below .
Slightly OT-The IBD 100 is becoming the IBD 50
http://www.investors.com/forums/p/2894160/3269991.aspx?z
China’s Companies Dump U.S. Stock Listings
DECEMBER 27, 2010, 11:05 AM ET
WSJ http://blogs.wsj.com/deals/2010/12/27/chinas-companies-dump-us-stock-listings/tab/print/
By Dinny McMahon
It has been a banner year for Chinese companies launching initial public offerings in the U.S. But even as the 2010 class of newly listed stocks celebrate a string of strong debuts, other Chinese firms have been reconsidering their decision to list overseas.
Industry professionals say small Chinese companies, frustrated by a sense that their shares are underappreciated in their adopted home, are looking longingly toward China and the higher valuations seemingly on offer in Hong Kong and in the mainland bourses.
Some are even doing something about it.
In recent months the chairmen of Nasdaq Stock Market-listed companies Harbin Electric Inc. and Fushi Copperweld Inc. declared their intentions to take their firms private with the support of private-equity funds. Meanwhile, Chemspec International Ltd. and Tongjitang Chinese Medicines, which have American depositary shares listed on the New York Stock Exchange, said their chairmen have proposed taking the companies private as well.
While it is still early days, market watchers suspect the companies may ultimately list again, possibly in Hong Kong, where the IPO market has just finished a strong year. “We have certainly seen an uptick of this [sort of] inquiry,” says Rocky Lee, a partner with law firm Cadwalader, Wickersham & Taft in Beijing.
Almost 40 Chinese companies listed in the U.S. this year, with Internet companies among the standouts. But for many other Chinese firms, often in more traditional industrial businesses, their U.S.-listed stocks are trading at a significant discount to their counterparts in similar industries in Hong Kong or mainland China, as well as in the U.S. For companies that need to raise capital and are thinking about selling stock, that means they wouldn’t be able to raise as much money in the U.S. as they would elsewhere.
John Ma, director of China research at Roth Capital Partners, a research house that covers small Chinese companies, says the frustration is most acute for those firms that originally listed in the U.S. through a reverse takeover—a process that involves merging with a dormant shell company. The result is that the Chinese company gets a public listing in the U.S. without being subject to the same rigorous disclosures as an IPO.
Bloomberg News
Chinese Internet company Youku.com’s first trading day on the NYSE earlier this month.
But past accounting irregularities and a perceived lack of transparency have weighed on the reputation of companies that listed via a reverse takeover. Last week, The Wall Street Journal reported that the U.S. Securities and Exchange Commission has begun an investigation into reverse takeovers and is targeting individual Chinese companies for accounting violations and lax auditing practices. It isn’t clear which companies are being looked at.
“They’re so frustrated by all the negative publicity surrounding companies that went through a reverse takeover,” Mr. Ma says. “The market doesn’t differentiate between the good and the bad.”
The price/earnings ratio for Fushi Copperweld—which makes wire products—based on Mr. Ma’s forecast of 2011 earnings is 6.2, well below 20.3 for Shanghai-listed Jiangxi Lianchuang Optoelectronic Science & Technology Co. according to data from Thomson One Analytics. Harbin Electric, which makes motors, has a 2011 P/E ratio of 5.6, significantly lower than the 17.2 of Hong Kong-list China Automation Group Ltd. Shanghai-based Mr. Ma covers both U.S.-listed companies and counts Jiangxi Lianchuang and China Automation as their respective peers.
Another Chinese company, Sihuan Pharmaceutical Holdings Group Ltd. listed its shares in Hong Kong in October after having delisted them at the end of last year from the Singapore exchange, where analysts say company valuations have lagged those in Hong Kong in recent years.
The move seems to be paying dividends. Prior to its Hong Kong IPO, Sihuan Pharma sold shares at a price equal to 26.7 times forecast 2011 earnings, considerably higher than the five times expected annual earnings it was trading at in Singapore. The stock closed Friday at 5.63 Hong Kong dollars (72.3 U.S. cents), up 22% from its IPO price.
“Delisting is certainly one way to alleviate [the] frustration [of] small Chinese companies, many of which are excellent companies in China but went to the wrong exchange at the wrong time with the wrong expectations,” CWT’s Mr. Lee says.
If the Chinese companies leave the U.S. and relist, it is likely to be Hong Kong that benefits most. Foreign companies still aren’t allowed to list on China’s domestic exchanges. That category includes overseas-listed Chinese firms that restructured into offshore entities, even though their operations and assets are predominantly in mainland China.
Beijing has signaled its intention to set up an international board in Shanghai, which may open the way for Chinese firms to come home. The international board would allow companies to sell stock directly in yuan, rather than raise funds in a foreign currency and then negotiate with the foreign-exchange regulator to bring them into the country. But it is unclear when that might happen.
Companies leaving the U.S. for a venue closer to home also may not have much time. Some poor debuts and pulled offerings have raised questions as to how long the IPO rush will last.
And in some ways, local results still pale in comparison to what a Chinese company can reap in the U.S. Youku.com Inc. more than doubled on its first day of trading on the New York Stock Exchange this month.
– Prudence Ho contributed to this article.
Top 10 U.S.-Listed Chinese Stocks with Highest Short Interest: CMED, HRBN, CHBT, TSTC, JASO, MR, APWR, CAGC, DGW, UTA (Dec 30, 2010)
http://www.cnanalyst.com/2010/12/top-10-us-listed-chinese-stocks-with-highest-short-interest-cmed-hrbn-chbt-tstc-jaso-mr-apwr-cagc-dg.html
China: 18 Million Cars. Now What?
( We are only in the first lap of this race )
http://carnewsarticles.com/2011/01/01/china-18-million-cars-now-what/
My take? A very simple one: There are anywhere between 1.3 billion and 1.5 billion (nobody really knows) people in China. Only 6 percent own a car. The rest wants one. Combine that with rising incomes, even for the lowly farmhand, and there are enough car buyers for decades to come. Sure, there will be the inevitable ups and downs, but the long term trend is up. (If there ever is a serious market tremor in China, it could bring GM down. Ford and Chrysler – if still alive- would gain.)
I think the US market will rise 20 % and then fall 30 % only to recover with an 8 % return .
I think the Shanghai will rise 10 % fall 15 % around the middle of the year and then outpace the most of the world with a 25 % gain.
I think US listed China shares as a group will rise 5 % then fall 25 % and end the year 10 % down .
I believe within that group companies like CCME will almost triple at some point in the year but will end the year with a 30 to 50 % gain .
Next year the wheat will be separated from the chaff . The market movers in stocks like CCME will be due to institutional investment only . Most retail investors in the US will avoid all China stocks . Only savvy retail investors like the board members here will invest in China .
Btw Brazil which was only up 1% will gain more than 50 % as will Singapore Russia and several other high output countries . Europe will fall 20 % more except Germany which will gain 10 % and start to separate Europe in to two trading blocs.
This is Chinas next big move imo .
When Innovation, Too, Is Made in China
By STEVE LOHR
Published: January 1, 2011
AS a national strategy, China is trying to build an economy that relies on innovation rather than imitation. Clearly, its leaders recognize that being the world’s low-cost workshop for assembling the breakthrough products designed elsewhere — think iPads and a host of other high-tech goods — has its limits.
So can China become a prodigious inventor? The answer, in truth, will play out over decades — and go a long way toward determining not only China’s future, but also the shape of the global economy.
Clues to the Chinese approach emerge from a recent government document containing goals for drastically increasing the nation’s production of patents. It offers a telling glimpse of how China intends to engineer a more innovative society.
The document, published in November by the State Intellectual Property Office of China, is called the “National Patent Development Strategy (2011-2020).” It discusses broad economic objectives as well as specific targets to be attained by 2015.
In a recent interview, David J. Kappos, director of the United States Patent and Trademark Office, pointed to the Chinese targets for 2015 and called them “mind-blowing numbers.”
According to a translation of the document provided by the patent office, China’s goal for annual patent filings by 2015 is two million. That number includes “utility-model patents,” which typically cover items like engineering features in a product and are less ambitious than “invention patents.” In the American system, there are no utility patents.
In 2009, about 300,000 applications for utility patents were filed in China, roughly equal to its total of invention patents, which have been growing slightly faster than utility filings in recent years. But even if just half of China’s total filings in 2015 are for invention patents, the national plan calls for a huge leap, to one million, by 2015. By contrast, patent filings in the United States totaled slightly more than 480,000 in the 12 months ended in September, according to the patent office.
China’s patent surge has been evident for years. In October, Thomson Reuters issued a research report, forecasting that China would surpass the United States in patent filings in 2011. “It’s happening even faster than we expected,” said Bob Stembridge, an intellectual-property analyst at Thomson Reuters.
Yet if the trend is not surprising, the ambition of the Chinese plan is striking. The document indicates, for example, that China intends to roughly double its number of patent examiners, to 9,000, by 2015. (The United States has 6,300 examiners.)
China also wants to double the number of patents that its residents and companies file in other countries. Recent Chinese filings in the United States, Mr. Kappos says, are mainly in fields that China has declared priorities for industrial strategy, including solar and wind energy, information technology and telecommunications, and battery and manufacturing technologies for automobiles.
To lift its patent count, China has introduced an array of incentives. They include cash bonuses, better housing for individual filers and tax breaks for companies that are prolific patent producers.
“The leadership in China knows that innovation is its future, the key to higher living standards and long-term growth,” Mr. Kappos says. “They are doing everything they can to drive innovation, and China’s patent strategy is part of that broader plan.”
China’s strategy is guided and sponsored by the state. Should that be a source of concern for the United States, and perhaps a trade issue? Or is the plan likely to resemble past efforts by other governments to give their companies an edge in global competition?
In the 1980s, the Japanese government was widely viewed as the master practitioner of industrial policy, and Japan Inc. seemed poised to overrun one American industry after another, including computers.
As we know, it didn’t turn out that way, partly because of steps taken by the American government and industry. A semiconductor trade agreement was intended to pry open the Japanese market, and I.B.M. invested in a crucial but then-struggling supplier, Intel.
More important, however, Japan never became a force in a particularly unruly, imaginative side of computing: writing software. Generalizations are risky, but it seems that Japan, as a society, has not produced enough of that kind of innovative skill, despite being a formidable patent generator. (In that area, Japan is still slightly ahead of the United States by some measures, though Japan’s patent filing pace is slowing.)
To call Japan’s industrial policy an outright failure would be simplistic. In some industries — autos, machine tools and consumer electronics, for example — it has done quite well.
“They are still in the game in those industries and going gangbusters — and we are not,” said Clyde V. Prestowitz Jr., president of the Economic Strategy Institute and a former United States trade negotiator. Still, just how strong a hand government policy had in those successes is open to debate.
The Chinese patent strategy document is filled with metrics, right down to goals for patents owned per million people. It speaks of an innovation-by-the-numbers mentality, much like a student who equates knowledge with scores on standardized tests.
“It is a brute-force approach at this stage, emphasizing the quantity of innovation assets more than the quality,” said John Kao, an innovation consultant to governments and corporations.
But it would be a mistake, Mr. Kao said, to assume that China will necessarily follow a path similar to Japan’s. China, he says, is not only much bigger than Japan, but it also has a more individualistic entrepreneurial society, despite its Communist government. Someday, he predicts, China will have its entrepreneurial equivalents of Steven P. Jobs and Mark Zuckerberg.
DESPITE China’s inevitable rise, Mr. Kao said, the United States has a comparative advantage because it is the country most open to innovation. “American culture, more than any other, forgives failure, tolerates risk and embraces uncertainty,” Mr. Kao says.
Many innovative products and technologies, he says, will be made elsewhere. “But America’s future lies in being the orchestrator — the systems integrator — of the innovation process,” Mr. Kao said. “Look at Silicon Valley. It is a place where smart people from all nations, all languages and all ethnic groups come together. It’s the capital of innovation assembly.
http://www.nytimes.com/2011/01/02/business/02unboxed.html?src=busln
I have been big into China stocks and Biotech but i am going to start to focus more on US growth stocks based on what is happening in the overall markets . I saw this guest on CNBC today and now it makes sense to me what has been happening .
http://www.mefeedia.com/video/34250121
I know that the main reason for the sell off in China stocks has been attributed to the negative focus on potential fraud . But there may be a much larger phenomena happening . I watched this fellow Chris Johnson on CNBC talk about the sector rotation that is going on right now . Its an interesting video and i have posted it here.
http://www.mefeedia.com/video/34250121
These type of rotations can be prolonged . So i am trading very quickly on most of my positions until we get some stability back into our sector
Right behind U on ZSTN and LLEN
SPU up to 4.68 in premarket . I got lucky with this one along with LTUS and WKBT . All 3 have a ways to ride along with NEP . What scares me about NEP is they could pull a SBAY type of move.
China-based IT education provider BJB Career Education withdraws IPO
12/22/10
BJB Career Education, one of the largest vocational IT education providers in China, withdrew its plans for an initial public offering on Wednesday citing unfavorable general market conditions. The Beijing-based company was founded in 2006 and booked $80 mil in sales for the 12 months ended June 30, 2009. Credit Suisse, Goldman Sachs (Asia) L.L.C. and William Blair were set to be the lead underwriters on the deal.
View IPO Profile: BJB
Source: www.RenaissanceCapital.com
Very well written rational article based on The Chinese Academy of Social Sciences (CASS) annual 'Blue Book' and several other hard sources unlike rumor and guess work we are pounded with all day from the main stream press.
Very balanced points on both sides. The last paragraph caught my eye and reminded me that as Chinas economy shifts as an investor i want to ride that changing curve . So companies that focus on innovation will be the biggest winners in the next few years . China needs to start to shift from making the Ipads and Ipods to developing the ideas for these types of products . They already have but the super high growth will come from these type of companies . The water , printing and travel type companies will still do well but the innovators will fly .
http://www.ibtimes.com/articles/94910/20101223/china-outlook-2011-economy-perform-risks-inflation-reflation-rebalancing-stimuklus-rates-labor-expor.htm#
growth could breach the 10 percent mark in 2011. It put 2010 growth at 9.9 percent.
According to CASS, inflation will remain moderate next year, with the consumer price index (CPI) rising 3.3 percent. However, according to a Goldman Sachs research, inflation rate will surge to 4.3 percent next year.
The Goldman Sachs report says though it's certain that the People's Bank of China will raise interest rates there won't be steep hikes that could result in a deceleration of growth coupled with excessive exchange rate appreciation
The Morgan Stanley report paints hope on this front. It says Chinese consumer spending will become the biggest contributor to GDP growth in 2011, accounting for more than half of the forecasted 9 percent growth.
"This ongoing process of rebalancing from export-led to domestic demand-led growth and vice versa has two important implications. First, it requires a shift of resources (capital and labour) from the external to the domestic goods-producing sectors or vice versa, which takes time and thus weighs on growth in the meantime."
The CASS report says rising labor costs could hit the rapid growth of the economy. "The first challenge comes from the rapid rise of labor costs in the country," Liu Shijin, deputy director of the Development Research Center of the State Council said. "The competitiveness of Chinese companies will be threatened by rising labor costs unless they find a new source of growth, such as innovation."
Macro Call of the Year: Buy Chinese Micro Caps
( sorry if it has been pasted before )
http://seekingalpha.com/article/243253-macro-call-of-the-year-buy-chinese-micro-caps?source=yahoo
"China is on a treadway to hell" - Jim Chanos
"Dangers lurk in Chinese reverse mergers" - Herb Greenberg
"SEC probes China stock fraud network" - TheStreet.com
Every few weeks it seems another Chinese smallcap faces fraud allegations: Orient Paper (Amex:ONP), Fuqi International (Nasdaq:FUQI), RINO International (Nasdaq:RINO), China Education Alliance (Amex:CEU). The list goes on. In many cases the allegations seem to be correct.
Fears of fraud have many investors fleeing Chinese smallcaps and microcaps altogether, just as many of these companies are improving performance and in some cases, corporate governance. There are huge bargains to be had…if the companies and the numbers they report are real.
Betting on the legitimacy of a company half way around the globe is a gamble that most investors now want to avoid like the plague. That's why the odds are so good. I believe that a diversified basket of Chinese smallcaps and microcaps is likely to outperform most asset classes over the next six months, and I have put a lot of my own capital on the line to test that proposition.
There will be frauds, so owning only one or two of these companies is — in my view — a mistake. I spread my risk capital across a dozen of them, and plan to increase that number over the next month. Some will turn out to be frauds. I accept that. In fact, I always believe that to be the case when investing in a basket of microcaps. It's certainly an enhanced risk in the Chinese reverse merger space, and should not be disregarded. Part of that risk can be managed by watching for red flags and technical signals, but not all. The basket will succeed or fail not because of fraud, but despite it. The remaining companies will have to offset the performance hit from the bad apples.
Here are some of the China stocks in my basket, along with my approximate entry price. I'm not wedded to any of the particular positions and plan to trade the basket actively. However, gun to head, I would say my favorites are China MediaExpress Holdings (Nasdaq:CCME) followed by China Redstone Group (CGPI.OB).
Stock symbol ~ avg. entry
American Jianye Greentech Holdings AJGH.OB 0.81
Artificial Life ALIF.OB 1.07
Bona Film Group BONA 6.01
China Botanic Phamaceutical CBP 1.99
China MediaExpress Holdings CCME 15.05
China Redstone Group CGPI.OB 4.35
China Industrial Lighting CIL 2.80
China Mass Media CMM 3.45
China Sunergy CSUN 4.45
DeHaier Medical DHRM
5.30
Sky Mobi MOBI 5.50
Weikang Bio-Technology Group WKBT.OB 2.68
Do you have a view on any of these stocks? Is there a China stock you think I should look at? If so, leave a comment.
DISCLOSURE: Long AJGH.OB, ALIF.OB, BONA, CBP, CCME, CGPI.OB, CIL, CMM, CSUN, DHRM, MOBI, WKBT.OB.
Here is a post from YMB that sounds halfway believable about the upcoming NEP call .
" Hey I received a call today from a company representing NEP. It a seems they are still short the votes needed for the meeting on the 29. Any one else get contacted? We don't need another delay.
Dawg "
" Ok it's an agent for them called Interwest Transfer co. #801-277-3147. There exact duties I don't know. The call was preceded by a letter from China North East Pet trying to secure my proxy for the election.
"
http://messages.finance.yahoo.com/Stocks_(A_to_Z)/Stocks_C/threadview?m=te&bn=96240&tid=20095&mid=20095&tof=2&frt=2#20095
Lotus Pharmaceuticals: The Big Little Chinese Drug Manufacturer
http://seekingalpha.com/article/243364-lotus-pharmaceuticals-the-big-little-chinese-drug-manufacturer?source=yahoo
While speculative opportunities in small cap biotech continue to entertain investors, halfway across the world a big little drug manufacturer, Lotus Pharmaceuticals, Inc. (LTUS.OB), is operating to the tune of explosive growth - and out of its own pocket, too.
In addition to manufacturing their own branded drugs and pharmaceuticals products, Lotus Pharmaceuticals distributes over 5000 western drugs, Traditional Chinese Medicines (TCMs) and medical equipment items through wholesale and retail channels such as ten of their owned and operated pharmacies in Beijing.
For the first three quarters of 2010, revenues totaled $52.5M or 31% higher than the comparable period in 2009. Wholesale revenue saw 18% growth while retail sales growth, at 83%, was the driving force behind top-line growth. This falls in line with the company's recent announcement to forgo construction of a new facility outside of China and instead focus more on core business in Beijing.
We have decided not to move forward with the construction of our planned facility in Inner Mongolia in order to focus our efforts and resources on expanding our core business in Beijing. We believe that selling or transferring this property will be a more effective use of our capital.
In December of 2008 the company had acquired the property in Chahaer Industrial Park, Inner Mongolia for $26.3M. Assuming the property is sold on a timely schedule and at or near cost, proceeds from the sale will in part, if not wholly, finance growth and expansion plans in the upcoming period. Cash inflows from operating activities, which brought in $19M in the first three quarters of 2010, have helped balance outflows in investing activities.
As a growing entity it is expected that the company will continue to invest in property and equipment. The beauty of the situation lies in that in case of a draught, the company always has the option of turning to shareholders or a low interest bank loan for quick access to capital resources.
Based on diluted EPS of $0.39, Lotus Pharmaceuticals currently trades at a trailing P/E ratio of 3.07. In contrast, companies in the healthcare sector boast double-digit P/E ratios. And while, in general, the recent fright over legitimacy of small-cap Chinese companies may continue to daunt investors, there are reasons beyond the scope of growth that deem Lotus Pharmaceuticals undervalued at its current price.
For instance, the market hasn't taken into consideration Lotus Pharmaceuticals' pipeline of drugs awaiting approval from China’s State Food and Drug Administration (SFDA).
Laevo-Bambutero, Lotus' asthma drug, is anticipating SFDA approval by 2012. While that seems like light-years away it's this type of inherent value that attracts large industry players to hostile takeovers.
Elsewhere, most recently being the PHARMCHINA 64th National Drug Fair Conference, the company continues to build its list of product distributors, which now totals 200. In the CEO's own words,
Our participation in the PHARMCHINA conference was very fruitful, as we came away with six new contracts upstream and five downstream. We believe we are well-positioned to reach our goal of 25% top-line growth in 2011.
And whether you like it or not, Lotus' management is taking strides towards qualifying for a higher-exchange listing. More on this another time.
Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in LTUS.OB over the next 72 hours
Question about NEP
First of all today is my first time posting on this board. Although i have been following the board for a year now . I was one of the investors who got shook out of CCME several dollars ago . I actually sold it above 11 on the way down and re-bought it under 10 and sold it below 12 because of the extreme pessimism everywhere at the time and los out on some super gains. I have managed to make most of my losses back on CGS and Biotech trades . I recently bought big into to NEP at 4.30 LTUS at 1.07 SPU at 4.05 and WKBT at 2.45 . I have changed my strategy to buying stocks that have sold off hard but yet have good fundies. I am a little worried about NEP after reading a post on YMB saying they had been contacted about the upcoming meeting not having enough shareholders.
Has anyone else received notice ? Thanks for all of your excellent posts .
I loaded up below 1.10 . I am so happy i did.
More bids coming into NLTX overwhelming the shorts that have been trying to hold it down
NLTX
check out the buy order on the bid for 61 92200
Wow
Peter
What other Biotech companies are you high on ?
Tia Shen
Vote for the Worst Biotech CEO of 2010
http://www.thestreet.com/story/10934643/1/vote-for-the-worst-biotech-ceo-of-2010.html?kval=dontmiss
Very nice . I am sure you are aware of Rames site . He also does an indepth score card system.
Thanks