Tuesday, June 12, 2007

How Overvalued Is China ?

i don´t know any Chinese company enough to judge them on a fundamental basis but when you read stories with a pe in the triple digit you should get nervous...especially when it is a meat company and just over the (stock) border you can buy a similar company for a steep discount........ but as long as the music plays........

ich kenne nicht eine chinesische aktie um mir fundamental ein urteil erlauben zu können. aber immer wenn ich geschichten mit einer dreistelligen kgv lese werde ich hellhörig ...das gilt besonders wenn es sich um einen fleischproduzenten handelt und vergleichbare werte die an einer anderen börse gelistet sind für einen bruchteil erwerben kann.....aber solange die musik noch spielt.....

June 11 (Bloomberg) -- What's a Chinese meat producer really worth?

On the mainland, investors pay 147 times earnings to own Fortune Ng Fung Food (Hebei) Co. Hong Kong-listed China Yurun Food Group Ltd. trades at 26.7 times profit. And in Singapore, People's Food Holdings Ltd. is valued at 11.7 times earnings.

``There is not that big a difference in their businesses, so there shouldn't be such a difference in their prospects and valuations,'' says Greg Lesko, who helps manage $900 million at New York-based hedge fund Deltec Asset Management.

Trading restrictions are partly responsible for the variations. That has sparked a search for more rational price-to- earnings valuations in Chinese equities. To some investors, even Hong Kong is looking overvalued. Increasingly, they are finding the most sensible multiples in one market: Singapore. .....

China's benchmark CSI 300 Index would need to fall as much as 54 percent to come in line with the price-to-earnings ratio of Hong Kong's Hang Seng China Enterprises Index, which tracks shares of 41 mainland companies listed in the city. The CSI 300 would have to drop 65 percent to match the average multiple for Chinese shares traded in Singapore........
`I've Made Mistakes'
Tan Jiong, 33, a security guard in Shanghai's Lujiazui financial district, invested 90,000 yuan ($11,737), equivalent to about half of his savings, in local stocks in March. He said he was ``extremely upset'' by the government's decision to triple the stamp duty but decided to maintain his holdings.

``To sell now would be admitting I've made mistakes, which I can't reconcile myself to,'' Tan said. .......

>this attitude could be an expensive one.......

>diese einstellung könnte am ende teuer werden......





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