1. 2007 Dec '07 Gave my top 7 clients "The Panic of 1907" by Robert Bruner as a Christmas gift. Forewarned is forearmed
2008 9/24/08 I emailed clients: "Buffet's interest in buying parts of AIG is like J.P. Morgan sending his broker into
the middle of the NYSE floor, at the height of the Panic of 1907, with orders to BUY"
Date Ticker STOCK INDEX
1 CONVICTION 10/22/08 Buy Mengniu 2319 HK 242% 52% FDR picked Joe Kennedy Sr to clean up Wall St in 20's. Same here with Mengniu founder Liu Gensheng
2 7/9/08 Buy Dongfeng 489 HK 209% -1% 30% profit growth in 1H beating full yr estimate, trading at historical low
3 11/18/08 Buy VanceInfo Tech VIT US 170% 26% Huge growth in R & D svs, apps dev revenues, and in China business
4 Pair Trade 11/18/08 Buy Dongfang Electric 1072 HK 199% Both Dongfang & Harbin power equipment pure plays, high revenue cover/order backlog, 7x & 4x '09E PE
Buy Harbin Power 1133 HK 55%
Sell Shanghai Electric 2727 HK -53% Engineering, procurement, & construction risk growing; slower non-power biz, large equity portfolio; 17x PE
74% 68%
5 Pair Trade 8/1/08 Buy *China COSCO 1919 HK 28% Steel-makers re-stocking iron ore, buy bulk shipping. * SWITCHED to SELL 9/1/08
Sell CSCL 2866 HK 39% Faster than expected rate declines, weaker peak season demand from Europe, sell container shipping
57% -5%
6 CONVICTION 1/9/08 Sell Huaneng 902 HK 42% State Council says no power price increase near term but fuel costs to rise more than expected
Pair Trade Sell Datang 991 HK 47%
Buy *Huadian Power 1071 HK -8% * Switched Huadian leg to SELL on 4/21/08
Buy China Res Power 836 HK -40%
41% -22%
7/8/08 Buy *TPV 903 HK 31% 2% Philip's 5 yr license, LCD industry consolidation, cheap valuation * SWITCHED to SELL 9/11/08
7 Pair Trade 4/21/08 Buy Air China 753 HK 25% China's flagship mega-carrier will win
Buy China Eastern 670 HK 0%
Sell China Southern 1055 HK 7% Questionable dual-hub strategy, highest unit cost ex-fuel, will lose
27% -12%
8 CONVICTION 7/14/08 Buy Yanzhou Coal 1171 HK 21% -2% High quality Yushuwan mine key construction completed, 30+% discount to peers
9 Pair Trade 7/10/08 Buy Hang Lung 101 HK 19% -1% Good China exposure, strong bal sheet, great mgt track record, defensive land bank
Sell Sun Hung Kai 16 HK 1% Potential sales launch delays, ASPs could disappoint
20% -1%
10 4/30/08 Buy Kingdee 268 HK 13% -16% Industry and company in transitiion, great rev growth , decent valuation
11 Pair Trade 7/14/08 Buy Cosco Pacific 1199 HK 2% Improving container leasing business, higher growth in Bohai bay than Pearl River Delta
Sell China Merchants Hldgs 144 HK 7% Highly exposed to global economic slowdown in China exports
9% -2%
12 Pair Trade 4/9/08 Buy Siam Cmm'l Bank SCB TB -4% Highest ROEs in sector, one of strongest in asset quality, still cutting NPLs
Sell Krung Thai Bank KTB TB 4% One of weakest banks in terms of gross NPL ratio and loan loss coverage ratio
0% -10%
13 5/7/08 Sell Li & Fung 494 HK -7% -15% Weak FY07 results in late March, trading 27x '08E PE in a poor macro environment
14 CONVICTIOIN 1/3/08 Buy Singapore Airlines SIA SP -4% -14% Betting SIA sells Virgin stake, rejuvenate balance sheet, possible approval to buy China Eastern stake
LOSERS
1 8/14/08 Sell Wilmar WIL SP -69% 3% Great headline earnings, but 26% of 1H earnings from currency gains, trades 20x PE
2 4/15/08 Buy Kowloon Dev 34 HK -41% -9% Trading at 45% discount to NAV, controlling shareholder buying back stock, 4.5% dividend yield
3 3/17/08 Buy *Swiber SWIB SP -39% 4% 2008 orders far exceeding '07, high ROE, good valuation * SWITCHED to SELL 10/10/08
4 CONVICTION 6/26/08 Buy KS Energy KST SP -35% -2% Acquired deepwater drilling expertise, plans to grow rig fleet, trades at half the valuation of peers
5 CONVICTION 9/5/08 Sell Parkson 3368 HK -27% 9% Slower growth, fewer future acquisition, mature stores, valuation 80% above peers
6 7/17/08 Buy Hidili Industry 1393 HK -27% 0% Rapid production growth, coking coal shortage, cost advantage, discount to local & global peers
7 1/17/08 Sell Yanzhou Coal 1171 HK -24% -14% Municipal charge to hit
8 5/5/08 Buy ASL Marine ASL SP -23% -9% Expanding ship repair capacity which could double revenues and profits
9 CONVICTION 5/21/08 Buy Sembcorp Marine SMM SP -17% -9% Surging semi-sub new builds, 38% 3 yr EPS CAGR, 15x PE, beneficiary of Brazilian oil find, has local shipyard
10 4/25/08 Sell KEPCO 015760 KS -13% -7% Earnings wiped out by rising LNG & coal copsts
11 7/7/08 Buy CNOOC 883 HK -6% -1% Strong production growth beyond 2009 not appreciated by mkt
12 CONVICTION 1/29/08 Buy Korea Exchange Bnk 004940 KS 1% 4% Favorite trade shown 6/5/07. New protections for US investors in Korea Free Trade Agreement; HSBC & others bidding
to Jan 15. 2010
THESIS