Dato Cheah on Chinese Stocks (London Value Investor Conference)

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#1
Notes From London Value Investor Conference 2015: Woodford, Ruffer, Brandes & More (LINK)

I was unfortunately unable to attends this years conference. Market Folly has done a write-up of the event. I was looking forward to hearing the presentation by Dato Cheah (Value Partners), and here’s an interesting comment by him:

An equity culture has not developed properly in China yet with the total number of stockbroker accounts only on par with Brazil. Chinese people are under-invested with only 6% of their wealth in the market. There is a general feeling of mistrust of stock markets because people have had their ‘fingers burnt.’

The recent dramatic rally in China stocks has further to go. The Hang Seng China trades on a forward PE of 9.8, 1.3x PB. There is an opportunity to invest in the ‘H’ shares as they trade at a 30% discount to the ‘A’ shares. It might be better to invest in larger companies as small-caps have already had a good run.”

He warned that ethical standards were low on the mainland. Investors have to do lots of due diligence but the market is inefficient so there are opportunities.

Comments:

I looked at a bunch of state owned enterprises (SOEs) somewhere around September 2014, but passed as I had difficutly getting comfortable with their leverage ratios. I eventually invested in some Hong Kong companies.

Now I know how people living in the dot-com era felt. I still feel a tinge of regret that I passed on it. Can’t win them all.
http://theasiareport.com - Reflections From Finding Value In Asia
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#2
Yes, I am looking at one big-cap months ago, but decided to pass when its price was around HK$ 8 per share. The stock now is more than HK$ 20 per share.

But anyway, still need to stay discipline. Only invest when you are reasonable convinced and clear on its biz model. Tongue

(not vested in any SEHK stock)
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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#3
Sometimes, I really question why Chinese companies would come to Singapore to raise capital.

It's not that there isn't a vibrant stock market in China and Hong Kong. Have my own suspicions own why this is the case...
http://theasiareport.com - Reflections From Finding Value In Asia
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#4
(28-05-2015, 05:10 PM)theasiareport Wrote: Sometimes, I really question why Chinese companies would come to Singapore to raise capital.

It's not that there isn't a vibrant stock market in China and Hong Kong. Have my own suspicions own why this is the case...

I wonder this too. I believe in the past, many small Chinese companies chose to list in Singapore because they couldn’t meet the stricter listing standards imposed by their home country.

I also wonder why SGX let so many S-chips in in the first place, 140ish out of the 7-800 odd counters here. Was it merely because of volume and commission?
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#5
(02-06-2015, 04:53 AM)beau Wrote:
(28-05-2015, 05:10 PM)theasiareport Wrote: Sometimes, I really question why Chinese companies would come to Singapore to raise capital.

It's not that there isn't a vibrant stock market in China and Hong Kong. Have my own suspicions own why this is the case...

I wonder this too. I believe in the past, many small Chinese companies chose to list in Singapore because they couldn’t meet the stricter listing standards imposed by their home country.

I also wonder why SGX let so many S-chips in in the first place, 140ish out of the 7-800 odd counters here. Was it merely because of volume and commission?

SGX business relies on fees (commission, and indirectly the volume) of tradings and services. All listings were done because of same reason. None of the listing was done, due to other reason, I guess Big Grin
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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