ADR Forum

rohit · Joined: 17 Nov 2007 Posts: 24

One of the biggest problems with China is the lack of transperency. So you have to rely only upon the numbers. And the numbers can be deceptive. Look at the pump and dump of JADE recently.

We may however be a little bit safe if look at the P/E and forward p/e of all chinese stocks and do a compare of apple to apple.

http://www.diggsamachar.com/chineseadrs/chinesestocks/chineseadrsbype.php

This will be basic start up point to do more research.

This will help up decide which chinese stock to pick up.

rohit · Joined: 17 Nov 2007 Posts: 24

According to the link above I think following four stock seem to be excellent buy based purely upon the P/E and forward P/E

The P/E and the Forward P/E are for today.

Stocks P/E forward P/E

tcm 11.01 1.45
ffhl 2.11 1.53
scr 20.17 2.21
solf 100.35 4.94
shi 13.68 5.83
yge 191.00 5.88

Anyone has idea which one's are not scammy. Which of these can we put trust upon ?

jona · Joined: 17 Nov 2007 Posts: 4

The Chinese stocks that I like better.
TCM - Tongjitang Chinese Medicines Company focuses on the development, manufacture, marketing, and sale of modernized traditional Chinese medicines.

Looks like a good buy. The motley fool give them 5 star ranking as of now. My thinking is these medicines do not have side effects. These are herbals - just as eating vegetables have only +ve effect these. The P/E and the forward P/E are very low.

They however have low volume, and may take some time.

SCR - The Motley fool rating is 4. The company manufacture and supply of branded generic pharmaceuticals in the People's Republic of China. It manufactures and sells 35 pharmaceutical products and distributes 3 additional pharmaceuticals under its brand names.

The generic pharma is not very profitable biz but is ok. I will recommend it. Not very high growth but looks stable.

YGE -

Yingli Green Energy Holding Company Limited, engages in the design, development, marketing, manufacturing, and installation and sale of photovoltaic products in China and internationally. Gets 4 star ranking. With quarterly EPS estimate of $1.37 it is one of the hottest pick, in my view

SHI Sinopec Shanghai Petrochemical Company Limited engages in processing crude oil into synthetic fibers, resins and plastics, intermediate petrochemical products, and petroleum products.

It gets 4 star rating from me. It high price of around $61 could be deterrant for small investors.

Those that I like less

SOLF - engages in the development, manufacture, and sale of photovoltaic (PV) cells and PV modules primarily in of China.

I will give it rating of 3. With gas prices rising this may be a profitable biz, esp in rural china.

FFHL - The average volume is low. I will give 3 star rating.

The company develops, manufactures, and distributes plastic films using the biaxial oriented stretch technique, otherwise known as BOPET film (biaxially oriented polyethylene terephthalate). The company's products include printing base film, stamping foil base film, metallization film or aluminum plating base film, laser holographic base film, single/double surface matte film.

Does not look very promising.

[/quote]

jona · Joined: 17 Nov 2007 Posts: 4

It looks like TCM and YGE are good buys at the moment. We can put money a little bit on all of them.

juelly · Joined: 17 Nov 2007 Posts: 3

TCM looks good. YGE and SOLF both are in photovoltaic so I will put money in only one of them. Dont have enought money for 60+ dollars SHI. The FFHL has too low future growth.

So my take is TCM and SOLF.

vikas72 · Joined: 21 Dec 2007 Posts: 651

TCM outlook for 2007 is around ~590 - 620 RMB mil. So far its made
148.3, 141.1 & 126.9 for last 3Q's. To meet their outlook, they have
to generate around 173.7 RMB mil this Q4. I think its possible to meet
that number with increased sales of XLGB. Winter is the hardest month
for people with Osteoporosis and I am thinking there will be increase
in sales of XLGB.

For 2006, Q3 revenue was just 98.66 RMB mil and for Q4 it was 151.71
RMB mil. There is plenty of hope to meet the outlook for 2007.

Not that this will generate more revenue, Chinese medicine is approved
for use during Olympics next year.
_________________
http://starredreviews.com

vikas72 · Joined: 21 Dec 2007 Posts: 651

TCM has a huge growth potential in China. They have a very small
national market share at this time with a lot of room to grow.

TCM has huge potential as it only serves a small percentage of market
share. 12% of hospitals, and 13% of retail pharmacies.

"XLGB’s long-term potential can be seen from its room to grow in
China. At this stage, XLGB is only carried in 2400+ out of more than
20,000 hospitals and 34,000+ out of 250,000 retail pharmacies."
_________________
http://starredreviews.com