This is what I call excellent Investor Relations from HengXin

As promised, i will post the reply I got from HengXin regarding their patents.



Dear Niversphere

We represent Hengxin Technology as its IR/PR consultant.

Thank you for your interest in the Company. Hengxin Technology has received 3 patents in the PRC for its super-flexible coaxial cables and leaky coaxial cables, and are in the process of applying for another 5 patents for its products and manufacturing equipment.

I've attached the relevant pages from its IPO prospectus with the details of the patents. If you have any further queries, pls feel free to contact us.

Many thanks
May Nah


May Nah, CHIN
August Consulting
Tel: (65) 6733 8873
Fax: (65) 6733 9913
Hp: (65) 8139 7083






Cheers
Niversphere.

Attachment received: Attachment

Technical Side of 3G Rollout in China.

As we all probably already know, China is impending a 3G rollout. Probably readers are not as familiar as the implementing 3G network that is to be rolled out in PRC as I am. My field of interest and research is in mobile communications and networks.

There are many standards of the IMT-2000* and the one that China is probably going to implement is the TD-SCDMA standard. A collaboration of the China Academy of Telecommunication Technology (CATT) and Siemens Corporation.It's mode of operation is the DS-CDMA (1.1136 Mcps) using the TDD(time division duplexing)duplexing method. The key features of this standard is that the RF channel bit rate is up to 2.227Mpbs. Use of smart antenna technology is fundamental (but not strictly required) in TD-SCMA.

The current system employed in China is still the GSM standard, which is what we folks here in Singapore use currently. M1 tried to introduce CDMA here way back which i could remember but failed. What a pity. The wireless subscriber growth in China is a phenomenon. See here. Research firm, BDA China, forecasted the number of 3G subscribers in China to grow at a compound annual growth rate (CAGR) of 268 per cent from 2006 to 2010. By 2010, the number of 3G users will hit 210 million, accounting for 34 per cent of the total number of the phone subscribers in the country. The number of the total mobile users is expected to grow at a CAGR of 9 per cent from 2005 to 2010 to hit 617 million.

The TD-SCDMA standard relies on its existing core GSM infrastructure. Just by adding a high data rate equipment at each existing GSM station, you can implement the 3G network. As mentioned earlier, a key fundamental feature of the TD-SCDMA system is the antenna. The radio channels are 1.6KHz in bandwidth and rely on smart antenna , spatial filtering and joint detection to achieve several times more spectrum efficiency than GSM. As such this standard TD-SCDMA is easily implemented and inexpensively added into existing GSM systems.

Some industry pundits expect China to build networks based on the world's 2 most popular 3G standards, the WCDMA standard in Europe and CDMA 2000 which is backed by US Qualcomm Inc with the TD-SCDMA technology being used for support rather than a standalone system.

Let me make a bold prediction here, China will implement their own 3G standard, TD-SCDMA. Research started in 1998 and the proposal approved in 1999. Chinese pride is involved here, we have all seen how proud they are when they successfully launch to space.

Now lets discuss on how we can take advantage of this knowledge in investment. Knowledge of the technology behind it can be advantageous to a savvy investor. "Know what you buy ...." A recent report by leading Chinese financial portal, CNFOL.com estimated that around RMB 172 billion will be spent on 3G networks rollout in 2006 and 2007, and 70%(RMB 120 billion) of this investment will be wireless coverage related.

I have identified 3 companies listed in SGX as potential beneficiaries of the 3G network.

1. Ace Achieve
2. HengXin Technology
3. LongCheer


1.Ace Achieve
---------------------------------
I have covered on the fact that Ace Achieve is currently undervalued compared to what the market has given for its price. Ace Achieve provides customised solutions to its customers and is involved in business of installing of repeaters** for its customers. Ace Achieve's book order continues to look strong however net profits is lower. Being a small company, it is being bullied into having to give credit to its customers which is why high book orders dont really translate to higher share prices. However, an interesting point I observed is that the book orders are for GSM repeaters. This could lead to some interesting possibilities. Notice the fact that TD-SCDMA can be build over existing GSM system. Probably, the mobile operators are sliently confident on TD-SCDMA being implemented in PRC. And why not ? The phenomenon subscription rate has pushed the mobile operator to expand its coverage needs to satisfy their customers.

My Fair Value on Ace Achieve

2.HengXin Technology
---------------------------------
HengXin Technology is one of the most easy business to understand and is positioned to take advantage of the growing telecommunication industry in PRC. HengXin's core business is in the manufacture of coaxial cables used in mobile communications and other telecommunications equipment.

HengXin is enjoying the largest market share in the PRC of around 35 percent for the manufacture of coaxial cables for mobile.

Looking ahead >>>>>>>>>>>..
> HengXin is immensely successful in passing on higher cost of copper to its customers.
> It has increased its annual production capacity of RF coaxial cables to more than 30,000 km. Further consolidating its dominance!
> Expanding sales and marketing network to Chengdu, Chongqing, Wuhan, Urumqi and Hehehaote before the end of the year. We have already seen its initial success with a foreign Korean company. This is definitely very exciting development. Wow.
> HengXin planned to expand its product range to include accessories like connectors and antennas so as to provide customers with a one-stop valued added manufacturing service.
> Plans to leverage on its 3G compatible products to enhance its market share further in view of the anticipated issuance of 3G licences this year.

All these are positive developments for HengXin Technology moving ahead. Single product multiple applications in demand.

It's major customers can be categorised as following:-

i) Major telecommunications operators - these include the various branches or subsidiaries of China Unicom, China Mobile, China Telecom and China Netcom.

ii) Equipment manufacturers - these include Huawei Technologies Co Ltd, ZTE Corporation, Siemens (China) Limited, Lucent Technology (China) Co Ltd, Shanghai Bell Samsung Mobile Communication Co Ltd, Shanghai Datang Mobile Communications Equipment Co Ltd and Nortel Network (China) Co Ltd.

iii) Cable television networks - these include the cable television network and broadcasting stations in the various provinces and cities.

My Fair Value on HengXin Technology


3.LongCheer
-------------------------------------------
LongCheer could be the closest proxy to the widespread rising style conscious consumerism of the Chinese in PRC and also hitch onto the rising adoption of the mobile lifestyle in China. Mobile handsets has practically been unirreplacable part of our lives. Can you imagine going out without your handset? It's as if we are born with handsets(obviously not I was born with pagers. Just joking). My first mobile was the Motorola StarTec X , then Nokia 6650, Nokia 6610, 3 Samsungs, 2 Sony Ericssons and now the lastest addition SE W810i. Imagine the mini fortune, I had spent on phones. Maybe you might not change handsets as often as I do. I work on them for research and development though. I would like to highlight the current widespread spending generation of Chinese. The need for a better quality of life. Not to be caught dead pulling out a outdated phone model from your pocket. Chinese are particular about the face-value factor. Laughs.

LongCheer is a relatively new listing here in SGX. So far, its results released has been impressive. LongCheer achieved y-o-y sales and earnings growth of 102% and 69% respectively in the 3Q06. Gross margin improved from 16.1% to 19.1% q-o-q driven by new products. Staff size has grown considerably from 300 to 600 which bodes for further expansion.

LongCheer is deeply undervalued given its rosy growth prospects. LongCheer has a cash position of RMB 429.9M and I expect another generous dividend payout from the company. CIMB-GK has a TP of S$1.59 while DBS Vickers has a fair value of S$2.00 for LongCheer. Currently, I have a fair value of S$1.20 for LongCheer which is approximately 67% undervalued from the current share price of S$0.71.


Cheers
Niversphere.

================================================

Please read the prospectus and perform your analysis before making any investment decision. The above does not constitute a recommendation to apply for this company. I will not be liable for any losses incurred by anyone who invests based solely on the above-mentioned information

Terms used in this article:
**Repeaters: often used by mobile operators to provide dedicated coverage for hard to reach areas, such as buildings, or in valleys or tunnels. They are bidirectional in nature, and simultaneously send and receive signals from a serving base station.

IMT-2000: The standard for 3G cellular networks is called IMT-2000(international mobile telecommunications beyond 2000). IMT-2000 is the overall name for the 3G standard under ITU(international telecommunication union).



References used:
1)Wireless Communications Principles and Practice 2nd Edition by Theodore S. Rapport
2)Principles of Wireless Communications and Data Networks 2nd Edition by Benjamin PremKumar and Cai Jianfei.

News Articles:
1)Siemens sees delay in China 3G licenses to H1 '06
1)UPDATE: China Mobile Feb Growth Outpaced China Unicom

Youcan

Cheers
Niversphere.

HengXin Technology showing executionary, recognition and ambition.

HengXin Technology has since executed its executionary capabilities we expected of it and has been rather busy delivering good positive news to fellow investors. After my analysis of this company dated June 30th, several analyst has since released their analysis on HengXin Technology.



17 June 2006: JiangSu HengXin Technology granted tax exemption for 3 years.

17 June 2006: First major overseas contract with Korean-listed Taihan electric.

18 June 2006: China Mobile increases its contract with HengXin Technology.



Announcement


Regards
Niversphere.

Focus

Video interview of Warren Buffett in 3(1 hr) parts:



Google video : Heard it from the man




Focus.




Cheers
Niversphere.

Personal Thought Inspired By Buffett's Act Of Charity

Everyone is entitled to dream. To dream big, to feel the adrenaline of staying alive. Buffett lived his dream and also mine. I thought of distributing my wealth when I am old as Buffett and only sufficient amounts to my children. I stopped talking to friends about this as they would reply "You siao ah".

Personally, I am not a person easily swayed by other people's opinions. I lived my own life and so do they. It's easy to fall victim to the symptom I call "commander", giving orders on how others should live their own life.

That is really what I wanted to do, if I ever to be as successful as Warren that is. Success is relative. Just do your best.

Buffett has for decades declared his intention to donate his wealth to philanthropy unlike his friend Mr Willam Gates. I think I can relate to why that is so. A measure of wealth is how long you can substain your current lifestyle comfortably without any form of active income.

Have you ever wondered why the poor remained poor? Because they are poor. Huh ? You may say but let me elaborate on it. Let say you have less than $1000 dollars in your bank account or say less than $500 in your bank.(if you are those in below $500, hey you are donating $2 to the bank on "admin" charges, $2*12 = $24 ; $24/$500 * 100% = 4.8%P.A!! and assuming principal of $500 throughout. The bank is never going to offer you that rate even for your FDs. Compounding it and well be you know maths dont you.) I bet you would not even care a hood to fork out that $600 dollars for say the lastest phone in the market. But why? That is because to be rich, you had to feel rich first. To be rich is not what many imagined to be, living lavishly and using sharkfin for brushing teeth. In fact what I observed from rich pals are they are just like you and me but only that they can afford the occasional lavish treats. Deep down they are really misers, like the Uncle Scrooge. Haha. When you are there, you want to maintain at that wealth level and feel motivated to earn more and keep the number of digits running. You feel miserable when you over spend on somethings. Maybe Buffett overdone the feel rich factor. (shrugs shoulders)

The government recently released a new series of personal finance education program on Channel U. Quite a decent attempt at least, but not good enough. Action is the keyword, involve the people that really need it, not just celebrities.


Warren and all other successful people in life did one thing, enjoy doing what they like to do. I wish I could do that too, I know I can.

Take this with you from the Sage of Ohama,
"I Know what I want to do, and it makes sense to get going"
~ Warren Buffett

“为何指纹只长在手心而不是在手背，那有可能是老天爷要我们把命运掌握在手里“

Video Links:








Cheers
Niversphere.

Technical Chart Analysis on HengXin By Quest.

A little help from Quest and he did his analysis on HengXin Technology.





The chart can be viewed here 21st Century Quest!


Thanks Quest.





Cheers
Niversphere.

Singapore firms must not rush blindly into M&A deals: PwC By Wong Choon Mei, Channel NewsAsia

SINGAPORE : In their quest to internationalise, Singapore firms must prioritise which markets to move into first.

That is the advice from PricewaterhouseCoopers (PwC).

It says Singapore firms should not rush into acquisitions just for the sake of extending their regional footprint.

They should rather seek value through a patient and strategic selection process.

The mergers and acquisitions (M&A) market in Asia is growing fast, thanks to the sanguine global economy and burgeoning corporate wealth.

Last year, the value of M&A deals transacted in the region totalled US$38.7 billion.

Here in Singapore, firms too have shown keen interest to expand - not just domestically but also regionally.

And PricewaterhouseCoopers says this is where they have to be cautious and avoid over-aggressive moves.

"The markets are getting pretty efficient all over the world. So if you spring a deal anywhere, but can't earn back the cost of capital on the investment that you're making, you'll be negatively impacted no matter where you are. And if you can show, anywhere in the world, that you can actually increase the spreads between your return on capital and cost of capital, you'll be rewarded by investors anywhere," said Dr Mark Sirower, partner at PricewaterhouseCoopers.

According to PwC, most acquirers in an M&A transaction lost shareholder value, while sellers usually gained.

This is because firms tend to lose sight of the basics during the hunt for market share.

It says the keys to any successful merger are prudent pricing, business synergy and the ability to deliver upon integration.

"That's to basically understand the markets they are looking at. It's about understanding how their customers buy in those markets, how their customers' buying decisions are different across markets, what the underlying markets' growth rates are and what their competitors can do," said Dr Sirower.

"Some markets are going to have stronger competitors than other markets. So at the end of the day, I want to prioritise the market, I'm not going to go in everywhere at the same time. So I want to find those markets that have the capabilities," he added.

OCBC and DBS are among some of the top Singapore firms that launched high-profile M&A bids this year.

- CNA /ls

Article excerpted from:
http://www.channelnewsasia.com/stories/singaporebusinessnews/
view/217217/1/.html

Cheers
Niversphere.

HengXin Technology

HengXin Technology is a relatively new listed company in SGX. HengXin core business is in the manufacturing of radio frequency coaxial cables for mobile and telecommunications equipments in the PRC. HengXin Technology has a strong research and development base. Its strategic location allows the company to tap into the raw talents from Shanghai Cable Research Institute and Zhejiang University, Electronics Information Technology and System Analysis Institute to help improve and innovate new products for the company. So far, the company holds 3 patents and 5 pending patents from the 27 products they have developed. This is an impressive figure.
Coaxial cables find its many uses in (1) Outdoor wireless mobile signal coverage, (2) Indoor wireless mobile signal coverage, (3) Wireless mobile coverage in underground railways and tunnels, (3) Cable television network systems and (4) Broadband network access.

Hengxin Technology recently announced that they were awarded a contract worth 119 RMB million from China Mobile Communications Group Corporation and completion is expected by 30 Sept 2006. The contract involves supplying RF frequency coaxial cables of about 3100 kilometres and telecommunciations equipments to 31 cities and provinces in China. By no means, a huge contract to Hengxin Technology and demostrates its executionary capabilities. A side track is that 30,000 kilometres is the annual production capability of HengXin, which is around 10% for this contract alone.

HengXin Technology as noted by its directors are relatively able to buffer any flucuations in copper prices as they can easily passed on the cost to their customers. This to me is rather dubious.

Looking forward, HengXin Technology aims to get a slice of the huge mobile communications pie with the would be implementing 3G network in China. Currently, mobile penetration is only 30%. Hengxin Technology’s comprehensive sales and distribution network has helped to attract and maintain its wide customer base comprising major telecommunications companies in the PRC including 24 out of 30 branches of China Unicom, and 20 of 31 subsidiaries of China Mobile; seven major telecommunications equipment manufacturers such as Huawei Technologies Co., Ltd and ZTE Corporation; as well as 10 provincial cable television networks in the PRC.

HengXin Technology is going for vertical integration.The Group intends to expand its product range to include accessories like connectors and antennas. Plans are underway for the Group to commence production of connectors for RF coaxial cables by 4Q2006.

At current share prices of 0.51, HengXin Technology is trading at around single digit 9x FY06 PE. HengXin closest peer Andrew Corp is trading at around 25x.

Based on my DCF discount model, I derived a fair value of S$0.69 for HengXin Technology. This represents a cool 35% discount from current share price of S$0.51.


Cheers
Niversphere.

=========================================
Please read the prospectus and perform your analysis before making any investment decision. The above does not constitute a recommendation to apply for this company. I will not be liable for any losses incurred by anyone who invests based solely on the above-mentioned information

Website Introduction ::...

This article is to share with you a decent value investing blog and I personally subscribed to his podcast. Though he speaks in a rather monotonous tone but its the information embedded in that is valuable. Talk about dedication.


Gannon On Investing


His podcast site:

http://feeds.feedburner.com/gannononinvesting/valueinvestingpodcast

or

http://www.gannononinvesting.com/podcast/




I would appreciate it if readers can share some informative site by adding some comments.


Cheers
Niversphere.

拼搏 - 就是要你拼， 也要放手一搏

Jim Rogers Says China's Stock Market, Agriculture Set to Boom:Bloomberg

June 26 (Bloomberg) -- Jim Rogers, who joined George Soros to start the Quantum hedge fund in the 1970s, said China's stock market will boom in the next few years because the economy is improving and the government is encouraging investment in stocks. Tourism, agriculture, energy and airlines are among the areas where shares will surge, said Rogers, 63, who started investing in Chinese stocks at end of 2005 and plans to buy more. China's economy doubled in size over the past decade, overtaking the U.K and France to become the world's fourth-largest economy in 2005.

``Over the next few years, China's stock market will be one of the best in the world,'' Rogers told a forum in Beijing on June 24. ``I've sold out of many stock markets in the world. I have been buying Chinese stocks. If the China market goes down, I would hope to buy more.'' China's Shanghai Composite Index has gained 39 percent this year and the Shenzhen Composite Index has advanced 50 percent, making them among the 10 best performers this year of the world's 80 major equity markets tracked by Bloomberg. The government's success in disposing of more than $200 billion of non-tradable stock has helped to fuel the rally.

China also ended a yearlong ban on share sales last month to attract bigger companies to domestic markets, now dominated by smaller, state-owned manufacturers. So far, 40 so-called qualified foreign institutional investors, including Citigroup Inc. and Fortis, have been allowed to invest in a combined $6.895 billion in mainland stocks and bonds. The nation's stock market turnover in May jumped 80 percent from the previous month to a record 715.8 billion yuan ($89 billion), the China Securities Journal said on June 18, citing the China Securities Regulatory Commission.

Real Estate

Still, not all Chinese stocks will do well, and Rogers expects real estate to suffer. ``The government is trying to cut back and ease speculation,'' he said. ``The only thing is they haven't gone far enough yet.'' China in the past two months has adjusted loan, tax and land policies aimed at curbing property prices, including raising the minimum down payment for larger apartments. Real estate investment, which accounts for a quarter of total investment, rose 21.8 percent in the first five months, from a year ago. Rogers correctly predicted a bull market in commodities that began in 1999 and helped to send oil to a record and gold to a 26-year high. He has written about his travels across China and the rest of the world by motorcycle in the books ``Investment Biker'' and ``Adventure Capitalist.'' He also wrote the book ``Hot Commodities.''

Fortunes

Rogers said if he looks for new opportunities in commodities today, he would start with agriculture. ``I think there will be fortunes made in agriculture in the next decade.'' He is looking at cotton, coffee, wheat, soybeans and sugar. Cotton futures have risen about 6 percent in the past month because of concern over drier whether. Still, they are trading 53 percent below $1.15 a pound, reached in 1995. While cotton and coffee have been gaining, prices for copper, zinc, and gold have declined from records in the past month.

``Agricultural prices are historically very, very low,'' Rogers said. ``Inventories are the lowest in 34 years. We haven't even had a major worldwide drought in many years.'' Agricultural prices will also gain because China's demand has surged compared with 25 years ago, and the nation is losing farmlands, Rogers said. ``In Beijing, you now see a lot of restaurants. You wouldn't see that many 25 years ago,'' he said. Rogers told the audience at the conference organized by the Beijing University that the best advice he can give on investing is ``do your own homework.'' When asked what his strategies are, he said: ``When I find something cheap, when I think there are fundamental changes and things might get better, I buy.'' ``Supply and demand are out of balance for the commodities market and that's where the bull market is,'' Rogers said. ``All commodities over the next decade will be much higher.''

$2b e-govt masterplan launched

The Business Times, Amit Roy Choudhury, 31 May 2006

S'pore players who develop e-govt solutions will retain IP rights and get help to export them.

(SINGAPORE) In a move that is expected to boost the infocomm industry, the government yesterday announced a $2 billion iGov2010 masterplan under which it will work with local players to co-create, develop and export e-government solutions.

In addition, it will allow them to retain ownership of the relevant intellectual property (IP) to enhance their business and export opportunities. Players welcomed this move, saying it should boost infocomm exports.

To run over five years, iGov2010 will introduce innovations like a single SMS (short message service) number for all government services.

Unveiling the plan yesterday, Raymond Lim, who will today relinquish his posts of second finance minister and minister in the Prime Minister's Office, said the government aims to transform back-end processing to achieve front-end efficiency and effectiveness. Mr Lim takes over from Yeo Cheow Tong as Transport Minister.

iGov2010, or integrated government, builds on two previous plans - the e-Government Action Plan I (eGAPI) launched in 2000 and eGAPII launched in 2003. The government spent about $1.2 billion and $1.3 billion respectively on these three-year plans to develop e-services for citizens and businesses.

Wu Choy Peng, deputy chief executive of the Infocomm Development Authority (IDA) and the government's chief information officer, said iGov2010 will facilitate the growth of private sector IT through partnerships in innovative projects.

'Public agencies will collaborate with the infocomm industry in the co-creation, development and export of iGov solutions,' Ms Wu said.
She said that in many economic sectors the government is either the regulator, dominant supplier or dominant consumer. 'So in such sectors, what the government does internally can potentially have a lot of effect on the entire sector.'

An example of this is TradeXchange, a project by Singapore Customs, the Economic Development Board and IDA, which aims to transform the trade and logistics sector. 'We used what was essentially a government function... to create something that can potentially transform the entire trade and logistic sector,' Ms Wu said.

Similar sectoral transformation projects will be implemented under iGov2010.

Reacting to iGov2010, NCS chief executive Chong Yoke Sin said her company is well-placed in terms of expertise and experience in developing solutions such as My.eCitizen to create best-in-class solutions.

'Ultimately, these same solutions would have to be tweaked for foreign governments for export . . . In this regard, we applaud the government's thrust to release IP to the industry,' Dr Chong said.

Singapore Computer Systems president and chief executive Tan Tong Hai said iGov2010 is good news for his company because it is easier for governments to sell to other governments and to market 'Made-by-Singapore' solutions as a whole. 'The 'Made-by-Singapore' branding is very important, especially with Singapore being showcased as a leader in e-government solutions,' Mr Tan said.
CrimsonLogic's CEO Leong Peng Kiong said: 'To be able to export the IP for innovative e-government solutions is certainly a huge shot in the arm for local companies like ourselves.'

Stephen Lim, chairman of the Singapore infocomm Technology Federation (SiTF) noted that while there have been previous transfers of IP from the government to industry, iGov2010 institutionalises this arrangement. 'It makes it much more easier for industry and government agencies to collaborate - it's a positive act for the industry,' Mr Lim said.

The iGov2010 plan will revamp My.eCitizen and develop My.eBusiness portals to cater to specific customer segments or individuals. It will also increase the number of CitizenConnect Centres from five to 25.

According to IDA's Ms Wu, guidelines will be developed to help agencies present clear and useful information online and create new consultation spaces for business, young people and overseas Singaporeans.

She also said the government will implement a Unique Establishment Identifier (UEI) for establishments in Singapore, including companies, businesses, societies and non-profit organisations.

Similar to the NRIC number for individuals, the UEI for establishments will reduce the number of identifiers that establishments have to use and will provide a common means of identifying them.

The Indomitable Human Spirit

Xiaodoudou

Cancer has taken a few of my loved ones away before. This blog entry is dedicated to her, a stranger she may be. Her indomitable human spirit against cancer remains. Cherish Today.



Cherish Today
----------------------------------------

Take each day as it comes, Life is stressful enough.

Do not look back and grieve over the past,
There's nothing much you can do about it.

Do not worry about the future,for it has yet to come.

As long as it is called Today, Cherish it.

This day as if it was your last, will find each day worth living for.




Regards
Niversphere.

China Stocks Here Should Not Be Valued Like BOC - The Straits Times

22 May 2006
by Goh Eng Yeow

Investors should question if such debutants will pay off in thelong run MUCH hand-wringing and doomsaying accompanied last week's plunge in the local stock market, along with other regional bourses, as a series of factors, including Wall Street's sudden nosedive,
unnerved investors.

Still, despite the 6 per cent correction suffered by the Straits Times Index (STI) since it hit a record high of 2,659.65 points on May 3, most long-term blue chip i nvestors are still smiling, though not quite as broadly, as the STI has more than doubled in the past three years.

Sadly, the same cannot be said for those who had made heavy bets on recently listed China penny stocks - and the hand-wringing
and doomsaying may well ring a little more true for these investors.

A check with financial portal, Shareinvestor.com, shows that many suffered double-digit losses in percentage terms last week alone.

Somehow, nervousness over the likelihood of more interest rate hikes in the United States has finally shaken investors here to
their senses to question seriously whether betting on such debutants will pay off in the long run.

It may also be no coincidence that the explosion in interest in China stocks coincided with the biggest commodities boom in the
past 30 years.

Both are fuelled by a massive inflow of 'hot' money from hedge funds, now estimated to have anything between US$1.2 trillion and
US$1.5 trillion (S$1.9 trillion and S$2.4 trillion) at their command worldwide.

But as recently as last November, China stocks here were still languishing in the doldrums in a hangover of oversupply and
lacklustre trading interest, after the near collapse of oil trader China Aviation Oil in late 2004.

But then came a rekindling of the love affair between China plays and fund managers here, starting with the purchase by US
investment group Templeton in December of just over 5 per cent of soya bean-based food and beverage maker Celestial NutriFoods.

Other fund managers, especially those running hedge funds awash with petrodollars, were believed to have followed suit.

Heavy bets were placed on Chinese IPOs, especially those linked to commodities, foodstuff, or bio-fuel, whose major shareholders were barred from selling any shares during the first six months of listing.

Recently, however, while global equity markets dived on interest rates jitters, Templeton slashed its stake in Celestial by a third,
raking in a tidy profit, since the share price has more than quadrupled in the past six months.

This raises a big question as to whether other fund managers will do the same with their holdings of China stocks.

While Templeton fund manager Mark Mobius maintained that the sale of Celestial shares was to give his fund company 'liquidity'
to pursue other investments, billionaire Richard Elman, the boss of global supply chain manager Noble Group, was more candid
on what he described as the 'disconnect' between realities - surging commodity prices and the overheating China economy.

In his usual folksy style, he described the hundreds of 'patently ridiculous apartment blocks, vacant shopping malls, and never to
be occupied factories' he saw in China as a 'fairyland'.

And he recounted riding on a 'massive, super-slick steel hungry Maglev train that is 95 per cent empty and operates only
sporadically' - all classic symptoms of a developing bubble economy.

Herein lies the catch. If China takes steps to tame its grossly overheated economy and cool rampant property development - a key
source of global commodity demand - it will hit the businesses of many Chinese firms very hard.

In many recent Chinese listings, ordinary investors may face a double blow from a possible sale of shares by both hedge funds and
pre-IPO investors who will soon be released from the lock-up period imposed on them when their firms were listed.

Many of these pre-IPO investors secured their shares at a fraction of the IPO issue price. This means that even if the stock prices
of these firms fall, by say, half, they will still reap a handsome profit when they sell off their entire holdings.

That said, investors should ask themselves whether they should value every Chinese IPO here, as though it is in the same league
as a Bank of China (BOC) listing.

BOC, which is tapping the markets for US$10 billion, is a play on China's striking economic growth, with 11,000 branches and
200,000 employees reaching all parts of China, besides controlling 65 per cent of Hong Kong's second-largest banking group.

The froth from BOC's impending IPO may have rubbed off on the China IPO market here.

Just think: As recently as early December, market sentiment on China was so sour that the boss of one Fujian plastic pipe-maker
was willing to list his company at a mere four times price-earnings ratio (PE).

Yet, only five months later, valuations of China IPOs have almost doubled.

Fibreglass products maker, Midsouth Holdings, the 100th Chinese firm to be quoted here, listed recently at about seven times PE,
and currently trades at 8.7 times PE.

The question to ask here is whether there has been such a big fundamental change in the Chinese economy to warrant a sharp
jump in valuations of its small and medium-sized firms.

Sure, there is vast potential for growth among many of these companies. But they do not have the scope of BOC and should not be
valued like one.

Some have also argued that Chinese stocks here may also benefit from China giving the go-ahead to its US$25 billion state-owned
pension fund to invest overseas.

But most of this money is likely to find its way only to the best blue chips among Chinese firms listed abroad, and may skip
Singapore altogether.

So, wise investors should track the China scene with prudence, given the turbulence experienced by global markets. Those hoping
to hitch a ride to riches via China stocks had better be prepared for some very nasty bumps.

China To Pace Trade In Carbon Credits Foreign Investors To Pay Mainland Firms To Cut Back On Greenhouse Gases Output

South China Morning Post
23 May 2006

China's faltering efforts to clean up the environment stand to get a big boost from foreign investors eager to pay mainland power
plants and factories to reduce pollution in lieu of spending far more to cut emissions at home.

Over the next six years, China is expected to become world's biggest supplier of greenhouse gas emission rights under the terms of the Kyoto Protocol to the UN treaty on climate change. Since these rights are transferable, traders predict a large market for this unusual kind of security will develop.

According to the United Nations Framework Convention on Climate Change website, China is expected to generate 16.61 million carbon emission reduction units annually up to 2012, or 30.67 per cent of the global total from registered projects. One unit equals one tonne of carbon dioxide emissions.

Since only seven projects have been registered so far, or just 3.83 per cent of the global total, many more are clearly in the pipeline.
Indeed, 46 mainland projects have been approved, involving 50.94 million carbon emission reduction units, according to data from the National Development and Reform Commission which must sign off on the projects before they can be submitted to a third party and registered with the UN.

They include hydro, wind and biomass power generation as well as waste heat and gas recycling projects.

Developers of registered projects that reduce pollution or produce clean energy earn so-called carbon credits that they can then sell
to polluters faced with mandatory emission-reduction targets in other countries. Often it is far cheaper to achieve a given amount of pollution reduction by investing in projects in more polluted emerging market countries such as China than by cutting emissions at facilities in more advanced economies where stricter controls are already in place.

Since the US has refused to accede to the terms of the UN pact, most of the potential buyers of credits are in rich European countries, which have committed themselves to cutting emissions by at least 8 per cent to 10 per cent from 1990 levels by 2012. The goal is to slow down, if not avert, global warming.

Many European power companies have installed scrubbers to filter out easier to control pollutants and the cost of achieving the next level of pollution reduction would be far higher, said Thorsten Ansorg, managing director of Noble Carbon Credits, a unit of energy, agriculture and industrial products trading and logistics firm Noble Group.

Despite China's late entry into the carbon credit market, the government has caught up fast. Beijing has clarified its regulatory regime and is considering imposing a pollution tax in a bid to give polluters more incentive to invest in emission controls.

"The Chinese market could become the main supplier of certified emission rights by 2012 but it still has a long way to go," Mr Ansorg said. "The potential is there, the willingness is there as well as political support and readiness of the companies to [supply]."

However, financing is a key hurdle. "You see many projects being proposed but the majority do not have financing," said Toru Kabo,
the Asia Development Bank's clean development mechanism specialist. "So one may enter into a contract with a [credit] buyer and
the project may never happen."

Last November, the bank provided US$15.8 million for a project in Liaoning province that collects methane from coal mines and channels it to households and industry for use as fuel. It is also seeking credit buyers for other projects.

Good Company Buy Back Their Own Stock?

If you find the topic interesting, read Here





Cheers
Niversphere.

Book Reviews

Excellent website to share with you

Focus Investor.com: The Focus Few

I read quite a number of investment related books before and little numb up there. however this website contains a wealth of information gathered in a single website. Gosh, if only I had stumpled upon it earlier and I am sharing it with you here.


"To be the Best, Learn from the Best"


My ratings for this website: EXCELLENT












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Niversphere.

Noble Group

Just added more Noble Group after looking through my watchlist and could not resist the value of this company in the long term.


Previous Posts On Noble Group:

Undervalued Business Model




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Niversphere.




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Please read the prospectus and perform your analysis before making any investment decision. The above does not constitute a recommendation to apply for this company. I will not be liable for any losses incurred by anyone who invests based solely on the above-mentioned information

Memory Devices :: Just A Step Away From Being Top Of The World

Memory Devices( MDL ) has a relatively short history from 2001, however its achievements thus far is nothing short of amazing. From a small office in Dongguan to a company acquiring 100% of TwinMos Technology. I remember vaguely that MDL share price was lingering around its IPO price for some time. Too bad then, I did not gave it a second look.

MDL is principally engaged in the research and development of solid state memory, DRAM and Flash memory and is widely used in consumer electronics such as MP3 players and thumbdrives. The is also a secular trend that consumers are upgrading or fitting their devices with higher memory capacity with after purchases of digital devices like digital camera and handphones. As the pixel on digital cameras or handphone camera increase, the need for higher portable memory increases. There is also rumors that Microsoft is launching its own version of PSP. However, that is still pure speculation. Without doubt is the increase demand for portable memory like Flash.

MDL aims to be a No.2 market player in the solid state memory products industry which, in according to source from iSuppli and compiled by DigiTimes - April 2005, is dominated by only one strong player with revenue of US$2.45 billion in 2004. The next two larger players had revenue in the range of US$726 million to US$740 million in 2004.

MDL had publicly expressed that it will be actively looking for opportunities to expand its geographical reach and grow it revenue, organically as well as through merger and acquisition.

MDL entered into a share exchange agreement to acquire the entire issued share capital of TwinMOS for US$96.8 million by way of the issue of 375.2 million new MDL shares priced at 42 SGD-cents per share. The acquisition is intended to elevate MDL a few more rungs up the ladder in the multi-billion dollar global solid state memory market. The acquisition is expected to be completed in 3Q of 2006. For readers who are clueless about TWINMOS.

Microft is expected to launch its VISTA operating system next year in 2007 a delay from its proposed launch date. As yet, the system hardware requirements are yet to be confirmed. One thing certain would be that it would be memory intensive just like Looking glass from SUN. However, I saw some new laptops with the sticker, Vista ready. Judging from the specs, I observed that at least 512MB DDR2 memory is needed. I expect end users will be buying new computers then fitted with more main memory( DDR2) which could potentially boast the bottomline of MDL specially after the successful acquisition of TWINMOS. This is a demostration of the ambitious management. The acquisition of TWINMOS allows MDL to reap economies of scale and consistent supply of memory chips for its own manufacturing. Maybe the delay of the launch of Vista by Microsoft may work in favor of MDL. A concern would be overstocking of inventory by manufacturers would cause a drop in prices of DRAM prices. It is just a low possibility.

Wired.com

Higher Ram prices may affect Vista

Vista to use more memory?

Windows Vista makes case for 2 GB of system memory, says Samsung


MDL recently concluded an exciting tie up with POTEVIO(http://www.potevio.com/en_new/index.asp), China's biggest handset maker. The increasing need for higher storage in mobiles will help drive the demand for Flash memory. Flash is lighter and more hardy than HDD based memory storage. The outlook for MDL looks bright indeed. POTEVIO is an IT products manufacturer and distributor as well as a service provider in the telecommunication industry where it is involved in both fixed line and mobile communications. It is one of the top 100 enterprises in China’s IT industry and was ranked No. 1 amongst the top 100 Chinese Electronics & Information Enterprises in 2001 and 2002. In 2003, POTEVIA was ranked by the Ministry of Commerce of China as the 5th largest enterprise, both amongst the top 500 largest import and export enterprises and the top 200 largest export enterprises. This Chinese biggest mobile phone producer has four self-owned product brands (Capitel, Eastcom, Bird and POTEVIO), four joint venture product brands (Ericsson, Nokia, Panasonic and Motorola) and two co-brand products (POTEVIO Sanyo and POTEVIO Toshiba) in China. In 2003, it achieved a production and sales volume of over 50 million units of handsets.


In its 1Q06 results, MDL announced a 59% increase in turnover with a corresponding 53% increase in gross profits. This is within my expectations.However 2Q results should be lower as expected as contribution from DRAM is seasonally lower in the 2Q. You can similarly get this information from chip testers like UTAC.

Based on DCF,



Today's share price of 0.37 represents a 22.8% discount to its intrinsic value. However do note that, I was conservative in my calculations taking into account the cyclical nature of the industry it is in.

Cheers
Niversphere.

Moore's Law: An empirical observation by Gordon Moore, co-founder and chairman of Intel.


Observation: New generation memory chips was introduced every 3 years woth 4 times memory capacity as that of the previous one. Alternatively, number of transistors on the memory chip becomes 4 times every 3 years or double every 18 months.

==================================================
Please read the prospectus and perform your analysis before making any investment decision. The above does not constitute a recommendation to apply for this company. I will not be liable for any losses incurred by anyone who invests based solely on the above-mentioned information