You are in good company my friend. To relive you further (and also my troubled soul) markets have short memories both on the upside and downside. Fibre is a basic material for clothes something which you will always need unless we wll go naked...hmm won\'t that be a bad idea. Regardless, there will be evntually one or two survivors and right now with the apparent demise of Fibrechem who do you think will stand to benefit...the remaining players will pick up the share. My wild guess will be Li Heng, SinoTech and China Sky. One of those will be a big lottery winner...very big. If push comes to shove...I will choose Li Heng as they are the biggest.I just hope the cash is really there and chances ae pretty good since they just had their IPO and I\'m sure that the owners management will see more value in transparency and corporate governance rather than stealing a few bucks and be on the run for the rest of their lifes. To reiterate, thee is just too much greed and fear out-there and once all this mess is cleared up and the first company that comes clean will be the BIG winner. The next time I\'ll be posting a new thread titled...\"Miss the boat???
i really do hope it will be titled, \'miss the boat\', and not \'miss the titanic, the big ship that sank\'... i was also harbouring the thought that Li Heng could snap up the market share in its industry, although its into high end nylon, if it could continue to withstand the market & confidence of the investors, to eventually grow bigger, despite issuing a profit warning which could be worrying. Do not think China Sky could undo itself anymore this time round. Sino Tech should be able to hold its own if this industry does not get forgotten by the investors. What other good stocks do you have in your portfolio??
Right now I would only safely recommend the following...caveat emptor. 1. china milk. - unique, really unique. 2. china zaino. - market leader in category 3. china taisan. - market leader and technological edge. All three has great balance sheet assuming they are what they are...sheez..and great cash earnings. China Zaino and Taisan may take 2 quarters of hits to their earnings but I do see them registering strong growth over the next few years. All with good business moats.
Hi Gary Teh, What are the demand-side factors to consider for China Milk and what constitutes most of their customer base ? I also heard they are launching a new line of milk products under their own brand. What do you think of this venture ? Also, does the Company have pricing power with regards to its bull semen ? Are there similar competitors with their own herds as well in the market ? Thanks in advance for any info you provide.
There is a lot of information from their past year reports and also continuous streams of reports from analyst. As for the demand for bull semen, it is the lowest cost way instead of trying to breed your own stock which again may result in inferior quality cows. They are rather upstream in the whole supply chain and especially in China, I would consider it to be unique in that sense. The have the home ground advantage and the region of Helongjiang is known to be one of the best places for cow grazing...call it the great plains of china and the weather conditions is suitable to raise Canadian Holstein and Australian version of it. Their customers are mainly small time farmers who eke out a living by milking raw milk and then selling the raw milk to downstream producers. The main problem with the melamine scandal is that due to stringent demand for higher quality milk ie: protein levels but the upstream farmers does not have the good quality cows to produce high quality milk as such there was a huge incentive to add \'melamine\' to pass the incoming QC. It was a convenient way and maybe it did not add to the margins but if they did not do it they would have no outlets to sell the raw milk. Getting or buying new good grade cows would be too costly for the average farmer. To breed them on the hand would take too long. So they took the short cut..and you know the rest. That is why I said the melamine scandal is the inflection point for China Milk from a demand perspective as now the milk farmers would have no choice but to breed good quality cows and walla...China Milk is right there waiting. Another point to note is that they pass with flying colors as the test showed that the milk from China Milk\'s herd met all the quality standards. I am two minds about their recent foray into producing end user milk products. This is a totally different ball game. Maybe they are taking advantage from the scandal and break into this highly competitive market. Of course they will have some share but that is yet to be proven as they have not done so in the past. As for pricing power, in the bull semen I am not too sure about it. However said so, I think being big China Milk would have perceived quality and that comes with pricing power over being purely commodity. I have not heard of competition to any significant scale to take on China Milk and if there is any it would come from outside China which will certainly be a big logistical disadvantage for the competition. On another note, they have so many cows that their raw milk growth may be the main revenue driver. Maybe you can do more intensive research and let me know whether I did miss anything.
hello, everyone. i was also kicked around by the market. now in blue-black and stunned status. by the way, how long this bear mkt will last? thank you.
