I like SOKF for the following reasons:
1) IDG Capital ventures is the pre-eminent investor in China who started with a 15% stake in Soko, bought another 5% in the market as the Company was not willing to sell them more. Portfolio companies include, baidu, ctrip, dangdang among others
2) CEO owns 40%
3) The Company is well funded with virtually no debt
4) Significant moat as they continue to lock up prime locations
5) Earnings understated as investment in new locations opening expenses and maturation curve mask true operational earnings
6) Growth trajectory is predictable as locations mature and after dominating Harbin they expand to other provinces, with 20-25% growth pretty much locked in.
7) A play on the growth of the chineses high end consumer, growth in tier II cities and burgeoning health trends
8) 25%+ ROE business and 35% profit margins
9) Compelling valuation
10) Highly attractive acquisition target
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