Tuesday, May 17, 2011 4:07:18 PM
You're assuming they have the same number of employees as last quarter and everyone got a big raise. I agree with you that Liu's bonus seems high, but don't you think it's reasonable to assume some of this money went to building out their sales staff?
The filing said "The growth in retail revenues was primarily attributable to the success of the Company's sales force and new general manager for its Over-the-Counter Drug Division, which served the Company's 10 stores and more than 1,000 other OTC drugstores in Beijing during the quarter."
It takes a lot of salespeople to cover 1,000 drugstores. The way I read the filing it sounds to me like they are in the process of beefing up their salesforce. That costs money (salaries). But presumably there is a payback on this investment.
I agree this is a long term investment. The share price may in fact dip lower in the short term, but I'm a lousy market timer and prefer to invest rather than trade. I still feel pretty comfortable that 2-3 years from now I'll be happy I still have my shares. Could I sell them now and buy lower in coming months? Perhaps. But I could also sell, thinking I'm going to buy lower, but then three days from now they announce the sale the Mongolian land for a huge premium, and then I'm kicking myself.
I'm happy staying put.
"The 19th century belonged to England, the 20th century belonged to the U.S., and the 21st century belongs to China. Invest accordingly." -- Warren Buffett
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