China Growth Stocks

[Shinisaurus]

OT: Tech Investors

I don't usually invest in Tech (other than Apple)so I might be missing something.

Anyways I'm looking at MU the memory manufacturer. It trades at 9.6x 2012 earnings, and therefore Im assuming everyone is paranoid about declining ASP's crushing margins (like with recent Q in which margins dropped 400 basis points from Q1 to Q2)?

For this most recent Quarter over Quarter comparison, DRAM ASPs decreased 23%, NAND's ASPs decreased 4%, and NOR's ASPs decreased an undisclosed amount. However it seems like margins can only rise, as management has stated ASP's will stay flat/rise and even with them staying flat, margins will expand due to them cutting costs. My take is margins should explode higher, as NAND/DRAM pricing seems very strong now after the Quake. While MU won't state they are a benefactor of the quake, they said their competition is hurt far worse than them, and they are minimally affected on production. Because of the quake and the unexpected strength in NAND/DRAM pricing (as evident in the post quake price surges) I'm thinking they should crush numbers.

I'm thinking this is a nice 6 month trade. Opinions?