Asia/Europe - 04/01/11

Asia / Europe (47.4% of asset mix) (with net present value in 1 year) 1. China Mobile (0941/CHL) HK$101.2 STRONG BUY 2. China Life (2628/LFC) HK$41.5 STRONG BUY 3. China Construction Bank (0939) HK$9.0 => HK$9.1 BUY 4. Total SA (TOT) US$61.6 HOLD 5. Siu On Land (0272) HK$6.7 => HK$6.5 STRONG BUY 6. HSBC Holding (0005/HBC) US$67.3 => US$63.3 BUY 7. IFSE A50 China Fund (2823) HK$22.4 STRONG BUY · Mar 11 major transactions: add Honda Motor (HMC) US$36.93; add MTR (0066) HK$29.1; add China Resource Power (0836) HK$13.0 · China Construction Bank 4q10 press release · 2010 net income up 26% to RM$135B compare to 2009, given 1. Net interest income up 19% to RM$252B 2. Fee income up 38% to RM$66B 3. Expenses & impairment up 15% to RM$121B & $29B 4. P/E ratio as of Mar 31, 2011 equal to 11.3 (looks reasonable, but with such high growth rate, the P/E ratio are low) · 2010 deposit from customers up 13% while loan to customer up 18% & loan to deposit ratio up 2% to 62% (very healthy or overly healthy compare to lots of global peers · 2010 book value up 10% to RM$2.8, price to book ratio 2.25 (slightly higher, but reasonable given the high growth rate) · Change NPV to HK$9.1, with a conservative 15% growth rate in earnings and 10% increase in RMB and assume P/E of 10 & BV of 1.6 in 5 years time and discount rate of 25%. # Bilibala personally uses fair value @ 2016 to do all investment, however, I think for most small investors, net present value @ 2011 (fair value multiply by discount factor), would be more relevant. · STRONG BUY with NPV over MV above 30% · BUY btw 15% to 30% · HOLD btw (15%) to 15% · RE-RE-RECONSIDER below (15%)