Contrarian

HSI dropped 1300 pts and the volatility was over 1000pts on Fri. The subprime crisis has forced so many hedge funds to dump good companys at unreasonable prices. What will be the bottom? Who knows ? The only think we can do is believing the value of good company supported by genuine profits.

HSI is now trading at 15-16x with 005, 941 announced over 20% increase in profits. The expected PE should be dropped 13-14x whichs should be reasonable.

http://main.hsi.com.hk/hsicom/c_table/c_MnPEHSI.html

I would keep buying and let the profit runs.

3968 has recently drawed my attention. The loan loss provision is the lowest among 6 China banks and grows at the fastest rate. A conservative estimate for 60% this year, the PEG is still 48x/60 = 0.8 (using the closing price of $25). Still relatively reasonable coz the company should not be affected by the political loan which deters many investors.

Being indifferent to the stock price, I have increased the weight of 3968 at $24.5 in my portfolio

A bit concern with 1098 as it has recently dropped with the market to my 2nd buy price. I would revisit the NAV since it has exercised the option for property from Sunco.

902 has dropped to a more reasonable price but the government has not yet approved the price increase along with the coal price movement. I would keep my eye open on it. Otherwise, the high coal price would eat up the profit and then I would change to banking sector as the interest rate spread has been widened.

Perhaps I should closely monitored both.

0005 HSBC HDGS
0753 AIR CHINA - H SHS
0902 HUANENG POWER INTL-H SHS
1098 ROAD KING INFRAST
1398 ICBC - H SHS
3968 CM BANK - H SHS
3988 BANK OF CHINA - H SHS