Replies to post #33838 on China Growth Stocks

[ratobranco]

TSTC - with respect to credit, I think the problem is that TSTC doesn't have the collateral to secure significant amounts of money in the debt markets. It's a chinese small cap. Who is going to loan them a large amount of money, with no equity upside, and very little backup in terms of tangible book value, at 6%? They would have to accept a much higher interest rate than that, which would make a deal less attractive.

With that said, I think the dream outcome here would be some combination of equity and low interest rate debt, secured from a fancy name--like China Mobile--at whatever price the stock is trading at after a strong earnings report--$30? In a scenario like that, I think $60/share becomes quite realistic.