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%)

Asia/Europe - 03/25/11

Bilibala Finance’s 7 Top Holding by Region: (with net present value in 1 year) Asia / Europe (46.4% of asset mix) 1. China Mobile (0941/CHL) HK$101.2 STRONG BUY 2. China Life (2628/LFC) HK$43.3 => HK$41.5 STRONG BUY 3. China Construction Bank (0939) HK$9.0 BUY 4. Total SA (TOT) US$61.6 HOLD 5. Siu On Land (0272) HK$6.7 STRONG BUY (pending to update) 6. HSBC Holding (0005/HBC) US$67.3 BUY (pending to update) 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 Life 2010 earnings up 2.3% to RM$1.19 meet expectation. However, as I kept mentioned, earnings is irrelevant to the valuation of an insurance co. Let’s read those meaningful data · Analysts concerns about loss ratio, let’s look at it 1st, it up 1.5% to 88.5% (mainly because of addition reserve on higher premium) to me, it looks reasonable. Combine ratio up 0.6% to 108.8% (which means every dollar of premium China Life received, it loss about 8.8 cents if excluding investment). Premium earned up 15.6% to RM$318B while value of business up 22.5%, looks great with strong growth. Sales to VNB up by 3.2% to 16.2 times, VNB up slightly slower than premium growth · Future sales growth continue looks great, as interest rate continue to go up while equity market is recovering and should back to peak in 10 years, China Life is in nice growing pace · Embedded value up 4.9% to RM$10.6 & based on all estimation & assumption, I will calculate China Life’s value at 4.05 times of its embedded value & discounted by 25.3% (instead of 21.6% previously) to come up with Bilibala’s new NPV of HK$41.5. · Japan Economy: Japan 1q11 GDP for sure will be hurt by the earthquake & the fall of the national electricity capacities, but most of the analysts think it will pick up in 3q & 4q (Bilibala think it will pick up even earlier than that) · Japan government estimate the damage will be US$0.3T and death may end up close to 30,000. · Bilibala believes in Keynesian Economic Theory, the damage may help Japan to have more meaningful & useful construction development. Given the following fact: 1. Japan’s debt will top 213% of total GDP (after counting the damage, the highest among G7), however, its net debt is only 120% (similar or bit lesser than the PIIGS), 94% of all debts are holding within Japan (means the government do not have interest rising pressure from foreign investors nor force to cut expenditures). 2. Also, Japan’s citizens are rich, having US$14T saving, while there are only US$7T government debt. Meaning Japan still have room to borrow from its nation to spend in order to boost up economy 3. In normal time, Japan can’t change much, where’s now, I hope the government will be able to try something “new”, instead of holding the money supply tie to control inflation, it should let inflation grow a bit to stimulate consumption and economic activities · Corporation like Automotive Toyota, Honda, Nissan etc, lol, you may think they are in big trouble cuz few of their plants have been damaged badly. Production line stopped till end of march, may affect global auto sales. But is it really bad for Japanese auto makers? Think again!! 1. insurance will compensate all the damage in the plants 2. parts can be produced in all other unaffected plants around the world 3. while lots of cars are total loss, people have to buy brand new cars in the coming 2-3 years, and they will most likely buy their own nation’s cars · I will talk about the impact to China economy later. # 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%)

Asia / Europe - 03/18/11

Bilibala Finance’s 7 Top Holding by Region:
(with net present value in 1 year)
(46.3% of asset mix)
1. China Mobile (0941/CHL) HK$96.4 => HK$101.2 STRONG BUY
2. China Life (2628/LFC) HK$43.3 STRONG BUY
3. China Construction Bank (0939) HK$9.0 BUY
4. Total SA (TOT) US$61.6 HOLD
5. Siu On Land (0272) HK$6.7 STRONG BUY
6. HSBC Holding (0005/HBC) US$67.3 BUY (pending to update)
7. IFSE A50 China Fund (2823) HK$22.4 STRONG BUY

· Mar 11 major transactions: MTR (0066) HK$29.1; China Resource Power (0836) HK$13.0; ESpirit Holding (0330) HK$37.1. I have to admit my mistake to invest in MTR & ESpirit Holding too soon, if I wait for one more day, I could have save a lot more, even though the unrealized loss was partially offset by the gain from China Resource Power
· Bilibala has increased China Mobile’s NPV by 5% after 2010 full year earnings release.
· 2010 profit up 3.9% to RM$120B
· 2010 EBITDA up 4.5% to RM$239B
· 2010 Revenue up 7.3% to RM$485B
· 2010 ARPU down 7.3% to RM$73
· Growth slowdown compare to prior years mainly due to 1) ARPU down; 2) sales & marketing cost; both because of competition from China Union Com & China Telecom
· Even if China Mobile’s growth slow down to 5.0% per year, its price over earnings ratio should still at 15. So I think its price is significantly under valued.
· Bilibala will write a sharing about Japan economy forecast.

# 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%)

Top holding Asia/Europe 03/11/10

Bilibala Finance’s 5 Top Holding by Region:
(with net present value in 1 year)
Asia / Europe
1. China Mobile (0941/CHL) HK$96.4 STRONG BUY
2. China Life (2628/LFC) HK$43.3 STRONG BUY
3. China Construction Bank (0939) HK$9.0 BUY
4. Total SA (TOT) US$61.6 HOLD
5. Siu On Land (0272) HK$6.7 STRONG BUY
6. HSBC Holding (0005/HBC) US$67.3 BUY (pending to update)
7. IFSE A50 China Fund (2823) HK$22.4 STRONG BUY
· Mar 11 major transactions: n/a
· Japan huge magnitude 8.9 earthquake & 33 feet high Tsunami. Boats, cars and trucks were tossed around like toys in the water after a small tsunami hit the town.
· Pray that the government can save as many survivors as possible promptly.
· Geopolitical risk & concerns in Middle East and North Africa are still heating up, can u imagine few strong, powerful governor (for years) fell down at the same time within just 2-3 months?
· No one can tell what will happen next and who will rule those countries. Some think about the movie 2012 or Jesus’ 2nd coming…..
· to me, I think of one scripture: “And in the days of those kings, the God of heaven will put up a kingdom which will never come to destruction, and its power will never be given into the hands of another people, and all these kingdoms will be broken and overcome by it, but it will keep its place for ever.” (Daniel 2:44)
· All the kings are full of power, and all those can gone in a second, who is the real ruler in history?
· If our LORD is the true ruler in all time, should we set aside a time with Him, do a prior to 2010 performance review and set our post 2011 objectives for Him??
· If our LORD is the true ruler in all time, who should we afraid of? Our boss? The government? Recession?
· Lol, I know it is easy to say than do….
· Lots of financial release will be on late March or early April, I will comment more by that time.

# 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%)

Top holding - Asia/Europe

Bilibala Finance’s 5 Top Holding by Region:
(with net present value @ 2010)
Asia / Europe
1. China Mobile (0941/CHL) HK$96.4 STRONG BUY
2. China Life (2628/LFC) HK$43.3 STRONG BUY
3. China Construction Bank (0939) HK$9.0 BUY
4. Total SA (TOT) US$61.6 HOLD
5. Siu On Land (0272) HK$6.7 STRONG BUY
6. HSBC Holding (0005/HBC) US$67.3 BUY
7. IFSE A50 China Fund (2823) HK$22.4 STRONG BUY
· Mar 11 major transactions: n/a
· Are you qualify to get $6k from HKG government? It has lots of arguments on:
· How should government deal with the HK$2.3T reserve?
· Whether $6k cash out is helpful to resolve society issue or not?
· Whether government should change its fiscal plan that easily?
· I voted for $6k cash to everyone with HK ID ga, cuz I think that’s the fairest and effective way to re-distribute from “too rich” government
· It is worth to discuss these topics before you plan on how to spend it.
· I am planning to buy MTR because MTR 2010 results looks great.
· 2010 EPS up 24% to HK$2.1, revenue (HKG fare & Others) up thanks to launch of MTR in Australia & Sweden in 2H2010 (even though they can’t make any $ at this stage)
· Growth opportunities are all over the world with continue enjoyment of the transportation monopoly position

# 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%)

Top holding in Asia/Europe

Asia / Europe
1. China Mobile (0941/CHL) HK$96.4 STRONG BUY
2. China Life (2628/LFC) HK$43.3 STRONG BUY
3. China Construction Bank (0939) HK$9.0 BUY
4. Total SA (TOT) US$61.6 HOLD
5. Siu On Land (0272) HK$6.7 STRONG BUY
· Hong Kong & China stock market continue to get pressure thanks to China government’s macroeconomic alignment. And as the Middle East Revolution heat up, cash flow was being pulled out from Asian market back to America, that’s why in short term, America stock market experience a higher than expected gains while Asian market looks flat.
· Investment is an art to draw a meaningful picture with the long term value & short term price. If a given new event do not impact long term value but somehow causing a drop in short term price, one should not have to worry.

Disney Narrows Loss in Hong Kong

Bilibala: Disney park in France are still in loss position, to me, it is challenging for HKG Disney to break even. However, with all other Disney products & services such as Studio & consumer products, I think porfit or loss is not a concern, at least not for Disney's shareholders.
On the other hand, for HKG government, haha, they should know what they investing before invested. They are not investing in Disney stock which will go up, but invested in Disney Park, which may take years to reduce to a lower losses. How much Disney can indirectly benefit HKG's tourism & economy? I don't think that's a lot if you replace it with another park similar to Ocean Park.

http://www.businessweek.com/news/2011-01-18/disney-narrows-loss-in-hong-kong-expects-profit-fairly-soon-.html

Jan. 18 (Bloomberg) -- Walt Disney Co. narrowed the annual loss at Hong Kong Disneyland and said it expects the business to turn profitable “fairly soon” as visitor numbers rise and the park expands.

The net loss shrank to HK$720 million ($93 million) in the 12 months ended Oct. 2 from a HK$1.3 billion loss a year earlier, according to a statement distributed in Hong Kong today. Park attendance increased 13 percent to 5.2 million visitors, boosting sales 19 percent to HK$3 billion.
The theme park benefited from a 27 percent surge in arrivals from mainland China in Hong Kong last year as wealth generated in the world’s fastest-growing major economy spurred outbound tourism. New areas of the park scheduled to be completed in 2014 may lure more visitors.
“We hope they can accelerate the expansion and add more rides,” said Joseph Tung, executive director of Hong Kong’s Travel Industry Council.

The park, a venture between Hong Kong’s government and the Burbank, California-based company, plans to add rides including “Toy Story Land,” “Grizzly Trail” and “Mystic Point” after the city approved the conversion of part of its loan to the park into equity in 2009 and Disney agreed to pay HK$3.5 billion.

“The expansion is very crucial to our profits in the future,” Hong Kong Disneyland managing director Andrew Kam told reporters today.

China Visitors
Hong Kong’s government owns about 53 percent of the theme park. Disney, the world’s largest media company, owns the rest.

The expansion plan is on time and on budget as the park signed most of the outsourcing contacts in 2009 that allow it to avoid a rise in raw-material costs, Kam said. “Toy Story Land” will be completed this year, he said.

The share of Hong Kong Disneyland visitors coming from mainland China rose to 42 percent from 36 percent, while Hong Kong’s contribution declined to 33 percent from 41 percent.
The park had earnings before interest, taxes, depreciation and amortization of HK$221 million. Hotel occupancy increased 12 percentage points to 82 percent.

Ticketing generates the most profit, Kam said, followed by merchandising, food and beverage and hotel businesses.

Total visitor arrivals to the former British colony surged 22 percent to 36 million in 2010, according to the government- backed Hong Kong Tourism Board. China’s National Tourism Administration said outbound tourism increased 17.5 percent last year to 56 million people, Xinhua News Agency reported Jan. 12.

Hong Kong Disneyland expects attendance to grow 10 percent in 2011, in line with a forecast from the city’s Tourism Board, Kam said.

--With assistance from Marco Lui in Hong Kong. Editors: Suresh Seshadri, Terje Langeland

Top holding in Asia/Europe 12/23/10

1. China Mobile (0941/CHL) HK$96.4 BUY
2. China Life (2628/LFC) HK$41.1=> HK$43.34 BUY => STRONG BUY
3. China Construction Bank (0939) HK$8.97 BUY
4. Total SA (TOT) US$61.64 BUY
5. Siu On Land (0272) HK$7.4=>HK$6.73 STRONG BUY

• China Life Share price fall mainly due to China stock market, however, premium up 19% in 2010, market shares kept at around 40%, new business value remain highly profitable, interest rate trend is favorable to China Life.
• There are potential 1-2% interest rate rise in China next year, therefore, I’ve readjusted China Life & Shiu On Land’s NPV to reflect such impact.

Top holding in Asia/Europe 12/10/10

Asia / Europe
1. China Mobile (0941/CHL) HK$96.4 BUY
2. China Life (2628/LFC) HK$41.1 BUY
3. China Construction Bank (0939) HK$8.97 BUY
4. Total SA (TOT) US$61.64 BUY
5. Siu On Land (0272) HK$7.4 STRONG BUY

Potential government intervention on real estate market and credit market makes the equity market looks flat compare to North America. On the other hand, I think those policies will keep the market stay healthy instead of “too hot”

Top holding in Asia/Europe 12/02/10

1. China Mobile (0941/CHL) HK$96.4 BUY
2. China Life (2628/LFC) HK$41.1 BUY
3. China Construction Bank (0939) HK$8.97 BUY
4. Total SA (TOT) US$61.64 HOLD => BUY
5. Shiu On Land (0272) HK$7.4 STRONG BUY

• Irish finally got its $$ and the next bond maturity bubble in Europe is Spain & Portugal. Wall street analysts make it sounds like a crisis. In fact, those are simply finding new bondholders to replace their old bonds.
• I think Europe will struggle with slow economy growth for years. The way Europe handle financial crisis is completely opposite than USA. In USA, the quantitative easing buy t-bills, increase money supply in order to prevent deflation, USA increase spending & Debt GDP ratio to boost economy. On the other hand, Europe focus on cutting expenses, reduce debt & reduce money supply. I still think quantitative easing will be a better approach.
• 2 weeks ago I said Hong Kong stock market climb up from 19,000 to 25,000, then drop back to 23,000 is a reasonable adjustments. You can see a strong support at 23,000. I think it will rise back to 25,000 soon.
• I don’t think North Korean issues is a big deal, there will not be a war, but the conflict will continue until I dunno, until North Korean leaders “golden” father & son collapsed, um……..say few years later.

Top holding in Asia/Europe 11/22/10

1. China Mobile (0941/CHL) HK$96.4 BUY
2. China Life (2628/LFC) HK$41.1 BUY
3. China Construction Bank (0939) HK$8.97 BUY
4. Total SA (TOT) US$61.64 HOLD
5. Shiu On Land (0272) HK$7.4 STRONG BUY

• China increased bank reserve ratio by 50 bps to 18.5%, historical highest & reduce next year’s borrowing target for big 4 banks, which will reduce R$350B credit flow in market. These are some softer policies to cool down the “hot” money, although it may hurt the potential growth of the bank sector – whose profit rely heavily on borrowing & deposit, on the other hand, it will lower the credit risk and decelerate the growth of the financial “bubble”
• I really upset & disappointed about the way China government handle with 趙連海, I don’t understand why, it is not political and if this (I mean if) is merely a civil case towards a corporation, and if the government don’t want to pay the compensation to all babies who got sick, that’s easy, just let 3 6 went bankrupt and re-open again 3 6 with the same management team few years later (of course, this is not ethical too). The government just don’t need to do such thing, it hurt everyone’s trust to China’s legal system and its political image in short term and if China continue this way, economy is everything and it is nothing, it will just lead the entire country, our nation, our home land, towards death. 趙連海 is really one of the righteous person in this injustice society, someone I should learn from (although I really don’t want to end up in jail) not just fighting for the rights on behave of his baby kid, but for the poor girl who got raped publicly in police station (make me think of the story in bible – judge c19-21).

Top holding in Asia/Europe 11/16/10

1. China Mobile (0941/CHL)
2. China Life (2628/LFC)
3. China Construction Bank (0939)
4. Total SA (TOT)
5. Shiu On Land (0272)

Market Fall: global stock market fall because of the following worries:

• Slow economy growth (every once a while, such worry came back)
• Inflation risk (will it come? No & Yes!! No, cuz consumer product index keep at around 2.0% and even in China, it is only 4.9%; Yes, commodity price rise like crazy. So it came and it will come, but in a non-tradition format – not in consumer product)
• Interest rate will rise (in China) (in order to balance between money supply, consumer product price and keep the borrowing / assets ratio low to prevent a potential bubble, I think a reasonable rise in interest is healthy to the economy. Under this interest rate rising expectation, China Life should be the biggest gainer cuz it will lower its insurance reserve liabilities.
• Default risk of the European PIIGS bonds
• To me, those worry are understandable but I think the true reason is a reasonable stock market adjustment. We should see the market stabilized at this point where S&P 500 at around 1170 and Hang Seng at around 23,000.

I’ve switched Exxon Mobil to Total SA, a France based integrated oil & gas company, cuz I want to increase my investment in Euro zone to have a more diversify portfolio while I think Total SA’s value is being more understated compare to Exxon Mobil.

Top holding in Aisa/Europe 11/09/10

1. China Mobile (0941/CHL)
2. China Life (2628/LFC)
3. China Construction Bank (0939)
4. Shiu On Land (0272)
5. HSBC (0005/HBC)

China Mobile: 3q10 revenue up 7.8% vs 3q09; earnings up 3.9%, ARPU down 4% to $72, # of customers up 11% to 569M. China Mobile still hold its dominate position in China’s telecommunication industry has 70.5% market share. However, growth definitely slow down from double digit to low single digit. To me, China Mobile’s current P/E ratio should be at least 14, which means its price should be at least HK$100. As it move to 4G, assuming the growth will go up from 4% to 8%, its value should worth at least HK$129 (in 5 yr).

Top holding in Asia/Europe 11/01/10

1. China Mobile (0941/CHL)
2. China Life (2628/LFC)
3. China Construction Bank (0939)
4. Shiu On Land (0272)
5. HSBC (0005/HBC)

• China Life: premium up 23% vs 3q09, total assets up 4.0% vs 2q10 while equity up 7.7% vs 2q10, as Shang Hang A stock break through 3k pt & interest rate up 25 bps, I think China Life will continue to increase shareholders equity value in 4q10 and so on, regardless of how much the reported net income is. In terms of stock value, I think today’s price is quite reasonable, not in big sales.
• China Construction Bank: results look awesome!! I still haven’t completed the trend analysis, will let all u know. It rise 13% from the day I came back to Canada, price over book rise to 2.43 and estimate price over earning rise to 10.1. um…………..still look reasonable but not in big sales.
• Bilibala will sold BYD Ltd. (not a wise decision to invest at 1st place, not cuz it is not good, but cuz I am not that familiar about the company plus I am worry commodity & labour cost will rise at least 10% per year which will hurt BYD’s earning) & invest more Shiu On Land today.

Google's Business Reason for Leaving China

Bilibala: really good article about Google leaving China if not smart decision, at least it is not a bad idea. As what I mentioned before, reputation is extremely important.

http://online.wsj.com/article/SB10001424052702303493904575167290011111402.html?mod=googlenews_wsj

By MATTHEW FORNEY AND ARTHUR KROEBER
Google's high-profile departure from China's search-engine market has burnished the company's reputation for ethics. The company has won plaudits from various quarters for sacrificing its business interests on the altar of free speech.

But is the decision really so altruistic? Few doubt Google's commitment to free speech, which is particularly important to co-CEO Sergey Brin, who was born in the Soviet Union. But when considering whether other companies should follow Google out of China, it's worth noting that Google's withdrawal from China's search market makes good business sense.

The reason is simple: Google's business model requires that its consumers trust that their information will be absolutely secure. So when Google says it will "do no evil" and will never compromise on its principles or its technologies, the world must believe it.

Recent events underline the sensitivity of data security. The same week that Google rerouted its China search traffic to Hong Kong servers, the Yahoo email accounts of several China-based foreign journalists were hacked. Yale University in the U.S. is reconsidering its decision to use Google's email service campus-wide after faculty members questioned whether data would be secure. And University of Toronto researchers this week announced their discovery of yet another cyber-espionage ring operating out of China.

In January, Google gave two reasons for reassessing its China operations. One was the company's dismay with the Chinese government's ceaseless efforts to limit free speech on the web. The other was a sophisticated hack attack launched from China in December that targeted Google's secure servers in the U.S.

View Full ImageFred Harper

The hackers, Google said, had penetrated far enough into the Gmail accounts of Chinese human rights activists that they could read email subject lines. Significantly, the hack also "resulted in the theft of intellectual property from Google." That property is believed to be a chunk of Google's highly confidential source code.

Google redirecting search users to its Hong Kong servers because of censorship is easy to understand. After much soul searching, Google did agree to censor its search results when it launched its Chinese search engine in 2006, and was later distressed to find that Beijing's commitment to censoring the web grew stronger over time, not weaker. But what did the hack have to do with exiting China? If the attack had come from New York City, would Google have closed down its service in Manhattan?

To find the answer, remember that the Google products we see today, such as the company's colorful but clean search page and its pinpointed maps, may soon comprise just a small part of Google's suite of products. Google's long-term plan is to compete not just with other Web publishers and search engines, but with technology companies like Microsoft and Apple.
In particular, Google wants to dominate the cloud—the suite of servers and applications that will store much of the information that businesses and individuals today retain on their own hard drives. Instead of using Word and Excel and Outlook, users may choose similar Google applications, such as Google Docs, that will store data online and make it accessible from any computer or wireless device. When used on wireless handsets, those applications may run on Google's open operating system, Android, which will of course make Google's products easy to use. In short, Google wants to be the guardian of your private information.

That's where China presents a problem. Google compromised its principles when it censored its Chinese search engine, which was damaging enough to its reputation. If Google had stayed in China and was seen as setting up research and development centers, training engineers, possibly even training the types of people who would someday hack out chunks of Google's code, then users could fairly wonder whether Google might compromise their data for a buck. As one former Google employee in China told us, "If what Google does in China makes its data seem unsafe, then Google's global strategy is gone."

So Google had much at stake in the world, but, it turns out, not much at stake in China. Google earned roughly $300 million a year in China, nearly all of it from advertising. Yet one-third of that sum came from Chinese companies using Google to place ads outside of China, and Chinese companies will presumably continue using this Google service. So Google stands to lose around $200 million. That's less than 1% of the company's global income—a rounding error.

Of course, Google forgoes more than just online advertising revenue. China's second-biggest telecommunications carrier, China Unicom, just dropped Google's search product from its newest smartphones. But such opportunity costs can be considered small compared to the downside risk of maintaining operations in China.

It's likely that Google's top executives, especially Mr. Brin, were already reconsidering their commitment to China when the hack came in December. The intrusion tipped the balance, and also provided a nice public-relations hook (Google has since said that the hackers had not targeted the email accounts of Chinese human rights activists).

The lessons to be learned from Google's exit are not necessarily transferable to other foreign companies operating in China. Many of these companies have also compromised long-stated principles. They may choose to follow Google and leave. But they should do so knowing that Google's principled stand did not imperil its future bottom line.

Mr. Forney is president of Fathom China, a corporate research firm. Mr. Kroeber is the Beijing-based managing director of economic consultancy GaveKal Dragonomics.

China CCB may raise $11 bln via share sales

Bilibala: I don't think China Construction Bank need cash, if the cash is merely try to fulfil the high capital requirement by the regulator, I hope it will have a better use of it. Or else, it is not a great decision for the existing shareholders.

http://uk.reuters.com/article/idUKTOE63504620100406

SHANGHAI, April 6 (Reuters) - China Construction Bank (CCB) (0939.HK) (601939.SS), the country's second-biggest lender, plans to raise about 75 billion yuan ($11 billion) through share sales this year to replenish its capital, Bloomberg News reported on its website, citing unidentified sources.

CCB may raise as much as 45 billion yuan in a private placement in Shanghai and 30 billion yuan in a rights offer in Hong Kong, the report said.

The fundraising plan has won approval from the State Council, or China's cabinet, and is subject to revision according to market conditions, the article said.

Zhang Jinguo, deputy general manager of CCB's board of directors office, declined to comment.
CCB, in which Bank of America (BAC.N) owns an 11 percent stake, met on March 10 to discuss potential fundraising plans, sources familiar with the matter told Reuters. [nTOE62P06S]
CCB Chairman Guo Shuqing said last week the bank was examining ways of raising capital but had no immediate plans to do so. [nTOE62S08A]

Chinese banks, including Bank of China (3988.HK) (601988.SS) and Industrial and Commercial Bank of China (1398.HK) (601398.SS), are rushing to raise cash after last year's government-directed lending binge weakened their balance sheets.

Manulife Buys JV in China

Bilibala: insurance company face aging problem, on the other hand, aging will give opportunity for asset management, that's why Manulife keep acquire aum business in the world.

http://www.benzinga.com/208438/manulife-buys-jv-in-china-analyst-blog
Posted on 04/06/10 at 9:45am by Zacks

Last week, Manulife Financial Corporation (MFC) completed the deal to buy Fortis Bank SA/NV's 49% ownership in ABN AMRO TEDA Fund Management Co. Ltd. The remaining 51% ownership is owned by Northern International Trust, part of Tianjin TEDA Investment Holding Co. Ltd. The deal pertains to MFC Global Investment Management, the asset management division of Manulife Financial.

The new joint venture has been renamed Manulife TEDA Fund Management Company Ltd. It will continue to provide traditional retail and institutional asset management services for clients across the Chinese market. As of Dec 31, 2009, Manulife TEDA's assets under management were RMB 30 billion (US$4.4 billion). This represents a 45% increase from the prior year level. The transaction has received the necessary regulatory approvals.

The agreement to purchase the fund management joint venture in China was announced last November. At that time, Manulife said that the purchase was for a cash consideration of €105 million (US$156 million). The acquisition is expected to be accretive to Manulife Financial’s earnings in the first year and would have a negligible impact on capital levels.

The asset management and insurance market in China is attractive to investors for its growth potential. Manulife Financial is also growing its insurance business in China through Manulife-Sinochem.

Manulife-Sinochem is a joint venture company between Manulife (International) Limited (51%) and China Foreign Economic and Trade Trust & Investment Company, a member of the Sinochem group (49%).

Manulife-Sinochem, which began operations in Nov 1996, was the first Chinese-foreign joint-venture life insurance company established in the country. The company currently serves over 500,000 customers in 41 cities across China through approximately 11,000 professionally trained staff and agents.

Manulife's fourth-quarter earnings of 48 cents per share were below the Zacks Consensus Estimate of 51 cents. The miss was driven by mark-to-market adjustments in real estate investments, model refinements to actuarial liabilities and tax adjustments.

However, the company benefited from equity market appreciation and increases in corporate bond yields. In addition, we think that such an expansion drive will considerably add to Manulife's scale and strengthen its position globally in the foreseeable future.

Shares of Manulife Financial increased 36 cents or 1.83% to $20.05 during the regular session on the New York Stock Exchange last Thursday.

入股浦發只是“增長故事”

Bilibala: as I said, regardless whether this is related to politic or not, it is a lot better than keeping cash.

http://www.finet.hk/mainsite/newscenter/CNFINET/343328.html

謠言終於止步。

3月11日，中國移動(00941-HK)董事長王建宙約見記者，表示入股浦發銀行的交易已經得到雙方董事會批準，下一步需要得到股東的同意，等國家相關監管部門批準後將具體執行。

同日，中移動公告稱，旗下全資子公司廣東移動以398億元人民幣認購浦發20%A股，中移動由此成為浦發銀行第二大股東。

這是3月4日王建宙宣布此項交易後再度面對媒體。數日來該項交易被國資委否決的傳言不斷。這或許折射出市場各方對交易並不看好。人們最大的質疑是︰中移動是否不務正業，或者是否充當救火隊員的角色。

“中移動並不是執行上面的意思去拯救浦發銀行，這完全是一個商業的行為。”3月11日下午，王建宙顯得氣定神閑，“其實，這是一個關於中移動能不能繼續增長的故事。”

確實，手頭持有巨量現金的中移動正面臨艱難選擇︰主營業務漸入競爭“紅海”，如何找到藍海成為當務之急。

現在王建宙正通過收購搭建一條足夠長的跑道，可以讓中移動的雪球滾得夠大。

非不務正業

對越界的指責，王建宙認為，這並不是不務正業，而是核心數據業務的延伸。

王的邏輯是，目前中移動靠傳統的增長方式雖然依然有相應的空間，但是此次與金融機構聯手的手機支付是為3G時代開闢的藍海，這是移動通訊數據應用業務的延展，手機支付將成長為新的百億級的數據應用。

目前，中移動的收入主要來自新用戶、話務量、數據信息業務三個方面的增長。

據王介紹，目前中移動的新用戶仍保持增長態勢，今年1月份增長了500萬，這在全球運營商中很難見到，此外由於2G用戶不需換號就能升級的拉動，新用戶中3G用戶增長迅速。家庭市場也是最近挖掘出來的新藍海。

在話務量增長上，目前仍保持了20%的增長率，達到每人每月500分鐘左右，但繼續提升的難度已經非常大。

正是在這種處境下，數據和信息業務的增長被寄予厚望。王建宙認為，5.27億用戶將產生的規模紅利最明顯的體現就是數據業務，此前手機音樂有3億用戶使 用，每人每月4塊錢，一年實現的收入超過100億，目前手機報已有幾千萬用戶，飛信也增長迅速，“現在計劃創造更多的100億元的業務。”

“當手機支付成為用戶的習慣後，也將大大減少離網率，保持收入穩定。”王建宙表示，根據中移動在重慶、湖南、廣東四地的試點經驗，今後在與多數大型商業銀 行打交道的同時，必須要有銀行的強有力支持，這需要跟一家銀行結成戰略合作關系，因為未來手機支付不僅僅局限在小額支付，還有手機轉賬和匯款等新功能的增 加，“所以要對銀行戰略投資”。

王稱，隨著手機支付的規模越來越大，今後除了手續費，很大一部分的利潤將產生在金融機構，入股銀行以後，就能分享金融機構實現利益，“所以從中長期，有很大協同效應，短期來看，中移動靜態的EPS可以提升2%”。

不謀求控股

“此次入股之後，中移動今後不會增加持股比例，也不會謀求控股地位。”王建宙告訴記者，此次交易完成後，中移動將派駐浦發銀行兩名非獨立董事，但他們只參與重大的戰略事項，並不參與銀行日常經營管理。

3年前，中移動收購了鳳凰衛視的19.9%，當時也表示不參與日常管理，不謀求控股地位。

王建宙說，中移動在尋找入股合作伙伴上花了比較長時間，浦發行由於規模適中，價格合理，相比入股大銀行，中移動的所佔股份和發言權都不會太小，“我們已經做了盡職調查，對於浦發行管理層和監管機制都比較滿意。”

他解釋此次之所以要通過廣東公司入股，是因為按照銀監會的規定，非金融機構投資金融業只能是由中國內地注冊的公司進行，而中移動的上市公司是在香港注冊， 因此不能展開經營，廣東公司既是中移動的全資子公司，又是內地注冊的公司，在一定限額內，根據銀監會規定，是可以經營金融業務的，“備忘錄中簽署的所有條 款都會符合監管部門有關部門投資的政策。”

“我們更看重的不是財務的EPS，而是中國移動自身的效益，盡管現在的規模還很小，但是未來很多的效益會很明顯，除了手續費，還會有商家給中移動的折扣、以及開發各種各樣的業務（電子轉賬、匯款）。”王建宙分析。

不過，王建宙認為，此舉並不意味著國家有關部門對跨行業融合的松口，跟浦發的合作仍是自己業務的延展，並且中移動不會投資其他非電信業務，比如地產和新能源等。

新引擎︰收購

通過入股浦發，中移動增長故事中又增添了一個新的利器——收購。

“我們準備把收購當成公司在前面三個增長之後的第四個增長極。”王建宙說，中移動正在尋找新的投資目標，但是重點一定是電信行業，它們主要是海外的電信公司。

3月11日，王建宙首次披露了去年入股台灣遠傳電信的內情。去年4月29日，中國移動以約5.27億美元收購遠傳電信12%的股份。遠傳電信是台灣第三大無線運營商。

據王建宙透露，目前遠傳電信項目正在推進，第一步將在台灣地區建立一家名為“縱信”的公司，該公司本身不是經營電信業務，但將來會作為投資遠傳電信的主 體，該公司是通過中移動在荷蘭收購的特殊目的公司（Special Purpose Vehicle）在台灣地區申請成立，目前已經得到批準。目前台灣地區公布的目錄當中，還沒有包括第一類業務，即基礎的電信業，王建宙希望，台灣地區在下 一個目錄中增加該項業務，這樣就可以快速開展業務。

此外，2007年2月，中國移動收購了巴基斯坦的巴克泰爾通訊公司（Paktel），王建宙表示，該公司是由中移動母公司擴容，目前已經完成擴容和重建，等條件成熟後，將由上市公司向母公司收購。

“收購的標準主要有兩個，即是否產生協同效應和是否能創造價值。”王建宙說。

目前來看，手機支付或許將成為最先創造價值的收購。廣東移動總經理徐龍告訴記者，目前廣東公司已經在手機支付上做了許多探索，現在的業務主要有手機短信、二維碼、手機錢包、手機一卡通，去年廣東移動的交易額已經超過7個億。

王建宙表示，目前手機支付的技術問題已經解決，主要的障礙在於打通地鐵、電影院、超市等各個終端的不同協議，不過不會太困難，目前在重慶試點，在市政府的推動下，快軌的乘客中有20%已經習慣了手機刷卡。

《21世紀經濟報道》徐志強 北京報道

中国超越美国并非必然

Bilibala: Good article. in order for China to be as mature as USA. I think at least take 20-30 years.

在1890年前后，中国经济与美国经济曾经有过一次邂逅，各自的经济总量分别相当于当时全球经济总规模13%。不过，两个经济体此后的走向却截然相反：晚清时期的中国经济已经千疮百孔，支撑古厦的柱子早已腐朽，只等外力的最后一击；而美国作为19世纪下半叶蒸汽技术（火车、轮船）的最大得益者，其经济在交通革命之下蓬勃兴起，对内铁路联贯东西海岸，对外货品倾销欧洲市场，开始向挑战英国的全球霸主地位迈进。

从地域政治上看，在经历了两次世界大战之后，美国才顺理成章地成为世界的盟主。不过，美国登上世界一哥宝座之路并不顺利。在上个世纪之初，其过度的信贷扩张、产能扩张，带来了近代史上罕见的1929年经济大萧条，GDP收缩了1/4，并有1/4的工人失业。在过去的100年中，美国曾经历过五次银行危机、四次石油危机、三次萧条、两次世界大战、一次疯狂的核军备竞赛，曾经历过大政府、小政府、无政府和白色恐怖的政府。在此期间，美国衰落的预言也曾一次次兴起，不过最终都被证明是不正确的。

这一轮经济危机，对美国的经济与金融业打击甚大，美元作为储备货币的公信力大幅度下降，美式市场资本主义不再被世人奉为经济发展的圭臬。美国经济似乎踏上了盛极而衰之路。
大国由盛至衰，也许是历史的周期现象，也许是最终的宿命，不过这种经济势力的此消彼长，取决于盟主的竞争力和挑战者的实力。

笔者认为，就目前而言，美国衰落论过于武断。我们必须将经济的周期性变化（包括发生重大的经济危机）与结构性竞争力的消长相区分。尽管美国在这轮金融风暴中损失惨重，它的国际竞争力依然存在。美国的科技创新能力，是世界一流的。美国将科技进步转换成企业盈利模式的能力，是世界一流的。美国企业及社会应付商业环境变化的能力，是世界一流的。另外，经过十多年的布局，美国跨国企业的利润中有半数来自海外。哪怕美国消费市场在未来十年增长乏力，美国精英企业依然能屹立不倒。至于美国在人才输入上的优势，这里就不赘言了。

日本GDP曾经在1970年占到世界GDP的13%， “Made in Japan”的产品全方位地挑战美国的世界霸主地位。但是，日本冲击世界第一宝座并不成功。石油危机等周期性变化对日本的长期竞争力影响并不大，但是结构性障碍却阻止了它的进一步上升。上世纪90年代资产泡沫破灭后，日本政府迟迟不愿推进银行改革，令信贷收缩长期化、板结化，窒息了经济发展的动力。人口老龄化，使得内需长期不振，公共负担日益沉重。日本已经失去了两个十年，正在进入第三个失去的十年。

中国在世界经济中的比重，十年前又重新回升到13%。全球化与生产外包，令中国成为了世界的加工厂，经济得以起飞。加入WTO与银行改革，又使内需日渐强大。近5年中国经济对全球经济增长的拉动力，超过了美国、欧洲、日本的总和。在这轮金融危机中，中国的银行没有受到直接的冲击，加上及时、有效的刺激经济措施，中国的经济率先复苏，似乎有了挑战美国一哥地位的资本。然而，如同当年美国的曲折成长，中国的崛起之路也必定不是坦途。

首先，我们必须将周期性因素与结构性因素相分离。2003年下半年开始的中国经济高速增长，几乎全部靠信贷扩张来实现。从重化工业产能扩张到房地产产能扩张，再到地方基建产能扩张，令经济出现一次次高潮，资产价格一涨再涨。资产负债表出现了惊人的扩张，但是生产力的提高却不大。信贷扩张是周期性因素，如同橡皮筋，拉得越长，最终的反弹必然越大。

中国经济最终能否持续地崛起，不取决于放贷数量的多寡，而是取决于生产力的提高。在过去30年中，中国的生产力提高基本上依靠体制改革和基础设施的完善，科技创新能力滞后，商业模式上的改变也有限。如果科技创新能力和商业盈利模式没有大的改善，笔者认为，目前的资产价格上升势头难以维持，中国挑战美国也只能说是一种梦想。

人口结构，是中国经济长期崛起的又一大障碍。独生子女政策，曾经对减轻社会的经济负担起到过一些积极作用，但是也制造出一个人类历史上罕见的断崖式劳动力供应缺口（战争、疫病原因除外）。劳动力短缺现象，会在今后十年全面浮现（假定经济能够维持8%以上的增长），不仅对出口产业构成打击，甚至会对中国的增长模式形成威胁。人口结构上的缺口需要数十年时间（甚至更长）才能修复，因此它对中国增长模式、财政负担、社会保障上所带来的冲击无可避免。
经济发展的短周期中，政策因素往往具有主导作用。但是，人口因素在长周期中显得十分重要。过去30年的经济成就与改革开放分不开，也与中国社会的人口红利密切相关。上世纪50年代末至60年代的婴儿潮人口进入就业市场、结婚生育、进入消费旺盛年龄的时间，与中国的出口起飞、房地产起飞、消费起飞的时间基本吻合。这批人还有十年左右的消费旺盛期，随后便会因退休而陆续放缓经济活动的步伐。

解决人口结构变化的根本出路，在于提高人均生产力水平。中国经济不仅要由出口主导向内需驱动转型，同时必须由靠人力、资金投入拉动发展向科技创新拉动转型。这个转型是可以做到的，不过前提是全面改善教育质量和尊重知识产权。中国超越美国并非必然。

业务多元化未必有着数

Bilibala: good article, on the other hand, as long as China Mobile will focus on its telecommunication business alone, the deal is still healthy. It just diversify its investment away from cash, not diversify its business/operation.

想饮牛奶，系咪需要买只牛？答案当然系 NO！所以笔者认为，想做手机银行业务(Mobile Banking)，又不一定需要入股，甚至买一间银行。现时它基本上已与多家内地银行合作拓展手机银行业务，故此，从表面资料推测，其入股内地银行，颇大机会是阿爷需要。

翻查数据，浦发银行自 2003年 1月至今，已 4次进行「增发」股份的融资行动，相信是内银股中其中一间再融资次数较多的银行。在融资了这么多次仍要再融资，自然难以再透过一般途径融资，寻找其他帮手亦是理所当然。 在过往历史，有不少成功的企业，由于入股或拓展至其他完全无关连的行业，引致最终失败收场，令公司出现巨额亏损。

美国著名的投资专家 Peter Lynch便常以「 Diversification」一词来形容一间企业将其业务拓展至与本业完全无关的领域，因而招致重大亏损。 所以 Lynch主张，有太多剩余资金的企业，假若资金没有更佳用途，倒不如以股息回馈给投资者，又或用以从市场回购股份，令股价上升，总胜于将资金胡乱投资至其他不相关之行业。

分散风险＝限制回报
假若这次中移动(941)入股浦发银行，纯粹是一项投资，不牵涉到其他合作，尤其是没有如一加一等于零的毁坏性情况出现，则以中移动目前强劲之现金流来看，相信投资于浦发银行的回报，应该高于中移动现时之现金回报率，故最终亦有轻微利好作用。

根据数据显示，手机银行业务是全球一个极高增长的行业，以中移动在国内庞大的电讯网络及较大比例的高消费用户群，相信很容易抛离其他对手，在手机银行业务方面取得较大增幅。

Lynch所讲的「 Diversification」，除了指企业投资于一些全无关系的行业而招致亏损外，他亦用以指出，投资者在投资组合中过度分散而招致损失。其中一个例子便是持有过多不同的股份，假若你将资金平均投资于超过 100只不同的股票，虽然其中一只出现亏损，对你的影响相对有限。但若其中一只大升，你所获取的总回报亦相对有限。同时，更大问题是，投资者持有大量不同的股票，当中大都是亏本的，因为赚钱嗰啲早已沽咗。

作者持有中移动(941)及相关衍生工具 作者谭绍兴为证监会持牌人士