China

[Spekulatius]

Interesting - I ran a screen for high dividend stocks in HK (>10% dividend yield as well as some quality and debt metrics and got a decent list). However ,I have not heard about any of these stocks. - does any of those look familiar?  I am sure there are some gems there but it’s very hard to do research from scratch in China.

	1171	Yankuang Energy Group Company Limited	HKG	1.18	12.62%	17.63%	1.30
	1378	China Hongqiao Group Limited	HKG	0.93	11.43%	6.25%	1.33
	9979	Greentown Management Holdings Company Limited	HKG	(1.77)	10.44%	18.92%	0.57
	777	NetDragon Websoft Holdings Limited	HKG	(0.70)	14.08%	7.93%	1.40
	1126	Dream International Limited	HKG	(1.09)	11.58%	20.60%	0.56
	1830	Perfect Medical Health Management Limited	HKG	(0.52)	12.30%	9.31%	0.30
	1571	Xin Point Holdings Limited	HKG	(0.57)	11.51%	9.64%	0.36
	6896	Golden Throat Holdings Group Company Limited	HKG	(1.76)	15.42%	15.96%	0.39
	9616	Neusoft Education Technology Co. Limited	HKG	1.13	12.12%	26.63%	0.33
	398	Oriental Watch Holdings Limited	HKG	(1.23)	15.47%	26.62%	0.42
	9908	JiaXing Gas Group Co., Ltd.	HKG	0.03	11.37%	7.26%	0.97
	1692	Town Ray Holdings Limited	HKG	(0.94)	10.75%	28.37%	0.32
	926	Besunyen Holdings Company Limited	HKG	2.09	50.14%	6.12%	0.46

 

 

 

Edited August 25 by Spekulatius

[Dinar]

4 hours ago, Spekulatius said:

Interesting - I ran a screen for high dividend stocks in HK (>10% dividend yield as well as some quality and debt metrics and got a decent list). However ,I have not heard about any of these stocks. - does any of those look familiar?  I am sure there are some gems there but it’s very hard to do research from scratch in China.

	1171	Yankuang Energy Group Company Limited	HKG	1.18	12.62%	17.63%	1.30
	1378	China Hongqiao Group Limited	HKG	0.93	11.43%	6.25%	1.33
	9979	Greentown Management Holdings Company Limited	HKG	(1.77)	10.44%	18.92%	0.57
	777	NetDragon Websoft Holdings Limited	HKG	(0.70)	14.08%	7.93%	1.40
	1126	Dream International Limited	HKG	(1.09)	11.58%	20.60%	0.56
	1830	Perfect Medical Health Management Limited	HKG	(0.52)	12.30%	9.31%	0.30
	1571	Xin Point Holdings Limited	HKG	(0.57)	11.51%	9.64%	0.36
	6896	Golden Throat Holdings Group Company Limited	HKG	(1.76)	15.42%	15.96%	0.39
	9616	Neusoft Education Technology Co. Limited	HKG	1.13	12.12%	26.63%	0.33
	398	Oriental Watch Holdings Limited	HKG	(1.23)	15.47%	26.62%	0.42
	9908	JiaXing Gas Group Co., Ltd.	HKG	0.03	11.37%	7.26%	0.97
	1692	Town Ray Holdings Limited	HKG	(0.94)	10.75%	28.37%	0.32
	926	Besunyen Holdings Company Limited	HKG	2.09	50.14%	6.12%	0.46

 

 

 

In case it matters to you, IRS does not consider Hong Kong and Singapore dividends qualified dividends.

[UK]

https://www.ft.com/content/c62ca855-c70b-4814-aa47-96d2a0020c16

 

In Vienna, for example, Sullivan stressed that Washington was not trying to spark a war, according to the second official. “We’re not trying to drag China into a conflict over Taiwan. Nothing could be further from the truth,” adds the second official, who added that Beijing had become “pretty conspiratorial” about US intentions. Underscoring the paranoia, Xi had told European Commission president Ursula von der Leyen a few weeks before the summit that the US was trying to goad China into attacking Taiwan. “The kind of basic notion of, ‘You guys are playing with fire on Taiwan’ remains a central feature of their thinking,” the first US official says.

 

https://www.ft.com/content/7d6ca06c-d098-4a48-818e-112b97a9497a

 

Xi issued the warning in a meeting with von der Leyen in April 2023 that was described to the Financial Times by several people. He said the US was trying to trick China into invading Taiwan, but that he would not take the bait. Another person said he had issued similar warnings to his officials. The comments provide a window into Xi’s thinking on Taiwan — the most thorny issue in US-China relations. Some Chinese academics and retired military officers have claimed that Washington is trying to provoke Beijing by providing weapons to Taiwan and pushing other measures to lure China into military confrontation. Speaking at the Asia Society in January, Cui Tiankai, a former Chinese ambassador to Washington, said China would “not fall into the trap somebody may be preparing for us”, in a veiled reference to the US. Xi’s remark to von der Leyen is the first known case of him making the claim to a foreign leader. Xi also said that a conflict with the US would destroy many of China’s achievements and undermine his goal of achieving a “great rejuvenation” by 2049. “If Xi genuinely believes that the US actively seeks conflict with China over Taiwan, then concerns that Xi has created an information vacuum or is otherwise getting poor counsel from subordinates are, worryingly, true,” said Jude Blanchette, a China expert at CSIS, a think-tank.

[nsx5200]

10 hours ago, UK said:

“If Xi genuinely believes that the US actively seeks conflict with China over Taiwan, then concerns that Xi has created an information vacuum or is otherwise getting poor counsel from subordinates are, worryingly, true,” said Jude Blanchette, a China expert at CSIS, a think-tank.

It doesn't help when Xi's been getting rid of dissonant voices with his own party(thus government).  It's a typical flaw found in a dictatorship structure, as noted in Jared Diamond's "How To Get Rich":

"But because Europe in the Renaissance was divided among 2,000 principalities, it was never the case that there was one idiot in command of all Europe who could abolish a whole technology" [Jared was trying to explain why China, back then, with its enormous head-start in different technologies was not able to reach the industrial revolution before Europe].

 

We know from biology that diversity makes the system more resilient, and having CCP in power, with its tendency to use top-down control makes China less diverse as seen in their policy of forced assimilation of ethnic minorities.  We can only hope that the opaque inner Politburo in the CCP has more room for open discussion and dissent.

[formthirteen]

[Spekulatius]

On 8/25/2024 at 9:55 AM, Spekulatius said:

Interesting - I ran a screen for high dividend stocks in HK (>10% dividend yield as well as some quality and debt metrics and got a decent list). However ,I have not heard about any of these stocks. - does any of those look familiar?  I am sure there are some gems there but it’s very hard to do research from scratch in China.

	1171	Yankuang Energy Group Company Limited	HKG	1.18	12.62%	17.63%	1.30
	1378	China Hongqiao Group Limited	HKG	0.93	11.43%	6.25%	1.33
	9979	Greentown Management Holdings Company Limited	HKG	(1.77)	10.44%	18.92%	0.57
	777	NetDragon Websoft Holdings Limited	HKG	(0.70)	14.08%	7.93%	1.40
	1126	Dream International Limited	HKG	(1.09)	11.58%	20.60%	0.56
	1830	Perfect Medical Health Management Limited	HKG	(0.52)	12.30%	9.31%	0.30
	1571	Xin Point Holdings Limited	HKG	(0.57)	11.51%	9.64%	0.36
	6896	Golden Throat Holdings Group Company Limited	HKG	(1.76)	15.42%	15.96%	0.39
	9616	Neusoft Education Technology Co. Limited	HKG	1.13	12.12%	26.63%	0.33
	398	Oriental Watch Holdings Limited	HKG	(1.23)	15.47%	26.62%	0.42
	9908	JiaXing Gas Group Co., Ltd.	HKG	0.03	11.37%	7.26%	0.97
	1692	Town Ray Holdings Limited	HKG	(0.94)	10.75%	28.37%	0.32
	926	Besunyen Holdings Company Limited	HKG	2.09	50.14%	6.12%	0.46

 

 

 

From that bunch, I keep my eye on Netdragon 777. HK. It’s a gaming company. Seems or have  plenty of cash on the balance sheet and they pay a bi- annual dividend (almost 8% yield on those) plus a special dividend which pushes the yield above 10% but that is probably variable.

 

I love companies that pay special dividends as it shows they pay attention to capital allocation and rewarding shareholders. 777.HK reports entering later this week, so I will take a look at those and might buy sone shares.

 

It’s really quite cheap, has been growing and pays out very well. It’s my kind of stock.

Edited August 28 by Spekulatius

[Luke]

9 hours ago, Spekulatius said:

From that bunch, I keep my eye on Netdragon 777. HK. It’s a gaming company. Seems or have  plenty of cash on the balance sheet and they pay a de turn in- annual dividend (almost 8% yield on those) plus a special dividend which pushes the yield above 10% but that is probably variable.

 

I love companies that pay special dividends as it shows they pay attention to capital allocation and rewarding shareholders. 777.HK reports entering later this week, so I will take a look at those and might buy sone shares.

 

It’s really quite cheap, has been growing and pays out very well. It’s my kind of stock.

Edited August 28 by Luke

[Hektor]

https://finance.yahoo.com/news/china-considers-allowing-refinancing-5-035032297.html

 

China Considers Allowing Refinancing on $5.4 Trillion in Mortgages

 

Under the plan, homeowners would be able to renegotiate terms with their current lenders before January, when banks typically reprice mortgages, people familiar with the matter said, asking not to be identified discussing private information. They would also be allowed to refinance with a different bank for the first time since the global financial crisis, the people said.

 

If approved, it may serve to ease mortgage burdens faster than expected. While China has pushed average mortgage costs to a record low this year, most households haven’t benefited since banks won’t reprice existing loans until next year.

 

China’s outstanding amount of individual mortgages stood at 38.2 trillion yuan ($5.4 trillion) at the end of March, and count as prime assets at Chinese lenders. More than 90% of China’s outstanding mortgages were for first homes as of late 2021, according to the latest public data available from the banking regulator.

[Spekulatius]

39 minutes ago, Hektor said:

https://finance.yahoo.com/news/china-considers-allowing-refinancing-5-035032297.html

 

China Considers Allowing Refinancing on $5.4 Trillion in Mortgages

 

Under the plan, homeowners would be able to renegotiate terms with their current lenders before January, when banks typically reprice mortgages, people familiar with the matter said, asking not to be identified discussing private information. They would also be allowed to refinance with a different bank for the first time since the global financial crisis, the people said.

 

If approved, it may serve to ease mortgage burdens faster than expected. While China has pushed average mortgage costs to a record low this year, most households haven’t benefited since banks won’t reprice existing loans until next year.

 

China’s outstanding amount of individual mortgages stood at 38.2 trillion yuan ($5.4 trillion) at the end of March, and count as prime assets at Chinese lenders. More than 90% of China’s outstanding mortgages were for first homes as of late 2021, according to the latest public data available from the banking regulator.

The  banks are taking a bath here with lower interest income, possibly followed by cuts in principal later. I think China going to japanize their financial system.

[UK]

4 hours ago, Spekulatius said:

The  banks are taking a bath here with lower interest income, possibly followed by cuts in principal later. I think China going to japanize their financial system.

 

Well, Xi/CCP always talks a lot and seems to prefer 'stability' against some sudden cleaning of the system (crash) or dealing with the problems in some other ways quickly, and they already have a track record of doing this, so this very well might be a right call.

 

Edited August 30 by UK

[Spekulatius]

On 8/30/2024 at 2:46 PM, UK said:

 

Well, Xi/CCP always talks a lot and seems to prefer 'stability' against some sudden cleaning of the system (crash) or dealing with the problems in some other ways quickly, and they already have a track record of doing this, so this very well might be a right call.

 

Correct. Maybe it’s even the right thing to do, I am just putting this out there because it’s not a free lunch and some one is on the losing side of this, which in this case are the banks.

China is also aggressively lowering interest rates which isn’t great for the banks either. I think XI is willing to sacrifice the banks for here greater good, most are state controlled anyways. This is probably a sector to avoid in this context, since so much of their performance is driven by central bank decisions as well as the economic environment.

[Spekulatius]

I checked on NetDragon after they reported and numbers weren’t that great but also some reporting seems weird, especially a round the partly spun off educational business- now named MYND.

Also some reported numbers look weird to me. NetDragon 777. HK went into the too hard pile.

 

Just posting this in case anyone is interested or has done some work on this stock as well.

Edited September 1 by Spekulatius

[Hektor]

Reality check on de-risking China relationship!

 

https://www.washingtonpost.com/world/2024/09/02/india-china-manufacturing-supply-chains/

 

India’s growing reliance on China poses challenge for U.S. trade strategy

The United States is looking to Indian manufacturing as a way to reduce commercial ties with Chinese factories and avoid supply disruptions.

 

 

American businesses looking to reduce their reliance on China have increasingly been eyeing India in the past few years as a new manufacturing hub — and as a hedge against potential disruptions in Chinese supply chains caused by rising geopolitical tensions or another pandemic.

 

But as India has amped up its production of goods like smartphones, solar panels and medicine, the Indian economy itself has become even more dependent on Chinese imports, in particular for the components that go into these products, according to trade figures and economic analysts.

 

This dynamic serves as a reality check for U.S. policymakers, who have been urgently promoting efforts to diversify supply chains away from Chinese factories and “de-risk” the commercial relationship with China.

 

[WFF]

On 8/30/2024 at 9:27 PM, Hektor said:

https://finance.yahoo.com/news/china-considers-allowing-refinancing-5-035032297.html

 

China Considers Allowing Refinancing on $5.4 Trillion in Mortgages

 

Under the plan, homeowners would be able to renegotiate terms with their current lenders before January, when banks typically reprice mortgages, people familiar with the matter said, asking not to be identified discussing private information. They would also be allowed to refinance with a different bank for the first time since the global financial crisis, the people said.

 

If approved, it may serve to ease mortgage burdens faster than expected. While China has pushed average mortgage costs to a record low this year, most households haven’t benefited since banks won’t reprice existing loans until next year.

 

China’s outstanding amount of individual mortgages stood at 38.2 trillion yuan ($5.4 trillion) at the end of March, and count as prime assets at Chinese lenders. More than 90% of China’s outstanding mortgages were for first homes as of late 2021, according to the latest public data available from the banking regulator.

China Merchant Bank said that they haven’t recieve opinion requests from the authorities (usually step 1), but if it does happen he expects a huge decline in mortgage interest incomes.  That said, I don’t think it will impact much, on an individual basis, as most that bought years ago, esp first time owners have LPR - first time owner discount.  The recent decline is small, though welcome but relieve won’t come until Jan, or when they pay in Feb.  if they can allow refinance to cash out the equity portion, that will help consumer tap into the equity portion, as many wants to tap but don’t want to sell given low prices. 

[nsx5200]

Interesting take on the structural economic issues that China's currently facing.

 

https://www.foreignaffairs.com/china/chinas-real-economic-crisis-zongyuan-liu

"Despite vehement denials by Beijing, Chinese industrial policy has for decades led to recurring cycles of overcapacity"

"In prioritizing industrial output, China’s economic planners assume that Chinese producers will always be able to offload excess supply in the global market and reap cash from foreign sales.  In practice, however, they have created vast overinvestment in production across sectors in which the domestic market is already saturated and foreign governments are wary of Chinese supply chain dominance."

"A larger problem with China’s reliance on local government to implement industrial policy is that it causes cities and regions across the country to compete in the same sectors rather than complement each other or play to their own strengths."

"These dynamics all contribute to a vicious cycle: firms backed by bank loans and local government support must produce nonstop to maintain their cash flow."

[Luke]

16 minutes ago, nsx5200 said:

Interesting take on the structural economic issues that China's currently facing.

 

https://www.foreignaffairs.com/china/chinas-real-economic-crisis-zongyuan-liu

"Despite vehement denials by Beijing, Chinese industrial policy has for decades led to recurring cycles of overcapacity"

"In prioritizing industrial output, China’s economic planners assume that Chinese producers will always be able to offload excess supply in the global market and reap cash from foreign sales.  In practice, however, they have created vast overinvestment in production across sectors in which the domestic market is already saturated and foreign governments are wary of Chinese supply chain dominance."

"A larger problem with China’s reliance on local government to implement industrial policy is that it causes cities and regions across the country to compete in the same sectors rather than complement each other or play to their own strengths."

"These dynamics all contribute to a vicious cycle: firms backed by bank loans and local government support must produce nonstop to maintain their cash flow."

What the financial media calls overproduction is just gaslighting. China is not allowed to participate in a market where the market participants find the right price for what is produced. Id gladly take a cheap EV but I am not allowed to buy it at the right price, henceforth china sits on lots of production it can't sell to me, a market participant looking for things. 

 

Everybody knows that once China is allowed to fully compete globally, 90% of industries will be immediately commoditized because there is (and soon wont be) no moat in cars, appliances, food, clothing etc (except for luxury nieches). That of course can not happen because the SP 500 trades at 30x earnings and would collapse, billionaires wont be billionaires, China would have even more control, capitalism as we know it changes from the financial engineered high margin system led by the US to a consumer oriented actual free market economy where the country that works the hardest, offers the best product and prices and hence earns the most money! 

 

 

 

Edited September 3 by Luke

[Luke]

BUT YOU CANT SUBSIDIZE YOUR COMPANIES (except if we do it its okay because whatever). 

BUT YOU CANT OVERPRODUCE (because all our capital backers will lose money and be angry)

 

Chose your fighter, would you rather be an ally with a country that has a huge industrial base for all sorts of things everyone needs, at cheap prices or would you want to be an ally with a country that has highly concentrated monopoly firms that will eat your own countries lunch, buy your politicians and squeeze the maximum price out of everyone's pocket? 

 

Thats why countries side with China, especially developed countries that want to rise up...because rising up is hard when everything is protected to death by patents and politics and you can make 30% margins selling toilet paper  

Edited September 3 by Luke

[Luke]

I think everybody in the western world would preorder an EV at the right price. It might be at a 2% margin for a Chinese player but at global scale that's still a lot of cash. But you cant guys! Because some shareholders and family owners don't want it! (of course they could just go bankrupt and then I work for a Chinese company that does everything better but they don't tell you that!) 

[Luke]

So we gotta protect the teslas, exors, apples, amazons etc because their projected earnings don't price in that they get any competition or lower margins and if that happens, well, we will implement lawsuits, tariffs, maybe start a war against that country, coerce them etc 

[Luke]

So what China is doing now of course makes absolute sense, go into developing economies, help them build their infrastructure so they can all become consumers and buy China stuff! Thats the essence of the American dream! (well, now its Chinese! ha!) 

[Luke]

I ordered a bunch of nice shit on temu, 8€ 44 in 1 tool that would cost 50€ made in Germany, swiffer replacement that costs a tenth of what the brand takes here, just amazing! But you can never make bargains! Gotta pay that 30% tax to the 35x PE family business! 

 

Edited September 3 by Luke

[hillfronter83]

On 4/9/2024 at 9:36 AM, hillfronter83 said:

how often do we see billion$ market cap wiped out in 10 minutes?

 

https://finance.yahoo.com/quote/1252.HK?.tsrc=fin-srch

Oops, did it again.

 

 

[nsx5200]

2 hours ago, Luke said:

What the financial media calls overproduction is just gaslighting. China is not allowed to participate in a market where the market participants find the right price for what is produced. Id gladly take a cheap EV but I am not allowed to buy it at the right price, henceforth china sits on lots of production it can't sell to me, a market participant looking for things. 

https://insideevs.com/news/717977/china-byd-ev-sales-struggling/

"The many Chinese EV manufacturers that had previously been reporting consistent growth are now announcing a drop in their sales and revenue, and there’s a price war between local manufacturers that seem to be fighting for buyers."

 

There are some other more recent articles that I ran across that indicates that some Chinese EV manufacturers actually lose money on every EV sold due to this race to the bottom.  The Chines EV market is not controlled/restricted by non-Chinese entities, so this is more evidence in support of the previous article.  There are similar stories like that for other industries that CCP cares about, like solar panel.

 

In regards to not able to participate in other markets, IMHO, it's a natural and fair reaction to how the CCP mislead foreign companies into believing they have an fair shot at accessing the Chinese market.  We've seen many foreign corporations withdraw from the Chinese market once they realized that fair access to the Chinese market is only a myth.

 

Quote

So what China is doing now of course makes absolute sense, go into developing economies, help them build their infrastructure so they can all become consumers and buy China stuff! Thats the essence of the American dream! (well, now its Chinese! ha!) 

We're starting to see failures from these BRI loans, and so the borrowing countries are starting to become a new form of tributary states to the CCP.  To the Chinese government's credit, some loans have been renegotiated and partially forgiven.

 

Despite the articles that I posted, I actually have a decent chunk of my holdings in Chinese-based companies, so I'm actually rooting for the Chinese economy(and for the people) to succeed as well.  In my naïve mind, everyone in the world, no matter where they are, should have access to the best products and selection, no matter where they're produced.  But unfortunately the reality is that other forces are in play, and so we see the type of restrictions and reactions from those forces.

 

It's possible that my view is restricted by the sources, but if you have different view points, it would be good to supply links to the sources that create those view points so proper calibration can be applied.  TIA, and I always appreciate a different view point.

[Luke]

36 minutes ago, nsx5200 said:

https://insideevs.com/news/717977/china-byd-ev-sales-struggling/

"The many Chinese EV manufacturers that had previously been reporting consistent growth are now announcing a drop in their sales and revenue, and there’s a price war between local manufacturers that seem to be fighting for buyers."

 

There are some other more recent articles that I ran across that indicates that some Chinese EV manufacturers actually lose money on every EV sold due to this race to the bottom.  The Chines EV market is not controlled/restricted by non-Chinese entities, so this is more evidence in support of the previous article.  There are similar stories like that for other industries that CCP cares about, like solar panel.

The result of this fierce competition will be an incredible edge and advantage in development for the survivors IMO. 

36 minutes ago, nsx5200 said:

In regards to not able to participate in other markets, IMHO, it's a natural and fair reaction to how the CCP mislead foreign companies into believing they have an fair shot at accessing the Chinese market.  We've seen many foreign corporations withdraw from the Chinese market once they realized that fair access to the Chinese market is only a myth.

If China wouldn't have had protections themselves its them who would never would have had a chance against US companies. Its always about who controls technology, resources, etc if you are behind you want to get an information edge and use tariffs etc.

 

Reality is that now the playing field is in favor of Chinese companies which is why the US needs to have all this "make America great again" talk. 

36 minutes ago, nsx5200 said:

We're starting to see failures from these BRI loans, and so the borrowing countries are starting to become a new form of tributary states to the CCP.  To the Chinese government's credit, some loans have been renegotiated and partially forgiven.

Yes, exactly how Western foreign policy worked previously. Contrary though I think once China has that developmental control, they can and will do more than just extract resources from those countries an do more actual development. 

 

I am personally just rooting for a more multipolar world where companies are not concentrated at 60% in the US. Would be great to see more from Asia but also Africa, have good human development and diversity. A world where its not "buy SP 500 and chill" but "buy world etf and chill". 

Edited September 3 by Luke

[zippy1]

4 hours ago, hillfronter83 said:

Oops, did it again.

 

 

High insider ownership。
BREAKING: Sanergy collapses 98.4% after people discover 98.4% of shares are held by insiders.