3SOF

http://www.fool.com/investing/international/2007/01/08/3-reasons-to-stay-long-chinese-stocks-in-2007.aspx?source=eptyholnk303100&logvisit=y&npu=y

3 Reasons to Stay Long Chinese Stocks in 2007


By Will Frankenhoff
January 8, 2007
You've got to admit that investing in Chinese stocks is never dull and could almost be characterized as manic-depressive. In the first three days of trading of this year, investors were treated to a roller-coaster ride which saw the Halter USX China Index end the first day of trading with a nice 4.4% gain . . . only to be followed by a 4.7% decline over the next two days.

Now, that's a bit more volatility than even weathered China hands are used to experiencing. This ugly sell-off was spurred in part by people taking profit (for tax reasons) in the new year, the diminished likelihood of a Fed rate cut (which put people in a bearish mood), and the People's Bank of China's announcement that Chinese banks would now have to keep 9.5% of deposits as reserves (the fourth increase in reserve requirements over the past seven months) in an attempt to cool lending.

While this is not a pleasant experience for longs, let me be clear about one thing: There's absolutely no reason to panic. In my opinion, the outlook for China stocks in 2007 remains as bright as ever because of the continued strength of the Chinese economy, robust earnings growth at Chinese companies, and a host of beneficial other economic developments. Furthermore, the fact remains that many listed Chinese companies are attractively valued in relation to their growth prospects, and I would urge investors to stay long with strong quality companies such as China Mobile (NYSE: CHL), China Life (NYSE: LFC), PetroChina (NYSE: PTR), Motley Fool Hidden Gems pick Ctrip (Nasdaq: CTRP), or Rule Breakers selection Shanda Interactive (Nasdaq: SNDA), all of which serve China's domestic market.

Let's take a quick look and make sure that I haven't lost my Foolish mind.

The Chinese economy
All right, I'll give you the fact that the Chinese economy is likely to cool in 2007, but it's not like the world's fastest-growing economy is going to fall off a cliff. According to a recent report by the Xinhua Economic Information Department, China's economy will post growth of merely 9.5% in 2007 -- down from an estimated 10.5% clip in 2006 -- due to a slowdown in global economic growth and tighter government curbs on investment in overheated areas such as housing and construction.

I don't know about you, but I think that a $2.5 trillion economy posting that type of expansion is still pretty impressive, especially since domestic consumption is starting to accelerate. According to the same report, retail sales of consumer goods are expected to increase by 15% in 2007, up from a 13.7% gain in 2006 and well ahead of the 12.8% growth in 2005. This increase in consumer demand bodes well from the prospects of companies serving the burgeoning Chinese middle class and should help these companies post yet another year of record profits.

Earnings growth
To say that Chinese companies have been thriving is a tad bit of an understatement. China's National Bureau of Statistics recently reported that in the nine months ended Sept. 30, 2006, Chinese industrial companies grew profits by an average 29.6%, up from a not-too-shabby increase of 20% in last year's period. This growth was driven by a whopping 54% gain in profits reported by private companies . . . and a 20% jump in earnings at state-owned companies. I don't think that it's much of a stretch to conclude that this trend will continue as private companies come to represent a larger part of the economy, as well as becoming more efficient in their operations. There are also two major economic developments that should further fuel shares of Chinese companies in 2007: the likely appreciation of the yuan and the introduction of a unified tax system that should significantly reduce the taxes the domestic companies pay the government.

The yuan and the tax code
With regards to the yuan: The Xinhua Economic Information Department is predicting that the yuan will appreciate 5% in 2007, compared with the 3.28% rise of the currency in 2006. While this might dent some exporters' profits, the vast majority of companies serving the domestic market will benefit as their earnings rise when reported in dollar terms.

Likewise, the central government is now considering scrapping the decade-old law that gave preferential tax treatment to foreign companies and imposing a unified tax code in 2007. In simple terms, that means that both foreign companies and domestic companies will have a corporate tax rate of 25%, down from the current range of 30%-33% paid by Chinese companies and up from the meager 14% rate currently enjoyed by foreign operators. Not only do the domestic players get a nice bump to margins, they also get a level playing field . . . one that few foreign companies will be able to compete on effectively.

Summary
All in all, I believe that Chinese stocks will have a good run in 2007 because of the reasons listed above. That's not to say there won't be gut-wrenching moments where investors feel like throwing in the proverbial towel, but the trend is clear: Stay long and strong Chinese equities. A little pain might yield a lot of gain.

HIHO ready to breakout

Lets make a list of ALL Chinese/Taiwanese/Hong Kong stocks tickers !!   

You can always buy into the Powershares Golden Dragon Halter USX China ETF, like I did.

PGJ

http://stockcharts.com/h-sc/ui?s=PGJ&p=DAILY&b=5&g=0&id=p

Powershares (so called smart ETF's) also have some other good sector funds.

HIHO will test 7.30

HIHO joining the party.

Market cap: $30 million.  Low float and rocking

I  know very little about this stock, but up 20% today on this
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Press Release Source: CDC Corporation


CDC Corporation Provides Update on Share Repurchases and Insider Buying
Friday December 28, 7:30 am ET 
Company Insiders Purchased 467,825 Shares During Last Nine Trading Days


ATLANTA & BEIJING--(BUSINESS WIRE)--CDC Corporation (NASDAQ:CHINA - News), focused on enterprise software and online games, announced today that company directors and executives have purchased a net amount of approximately 467,825 shares since the insider trading window was opened on December 17, 2007.
ADVERTISEMENT


Additionally, during the fourth quarter of 2007, the company and its subsidiaries repurchased 366,000 common shares at an average price of US$6.31 per share for a total of US$2,309,246. Since January 1, 2007, the company and its subsidiaries have repurchased a total of 2,909,200 common shares at an average price of US$8.02 per share for a total of US$51,220,386. Since the beginning of the share repurchase program on May 2, 2006, the company and its subsidiaries have repurchased a total of 8,997,824 common shares at an average price of US$5.69 per share for a total of US$51,220,386.

The company has entered into a 10b5-1 trading plan which facilitates the repurchase of its common shares and allows the company to repurchase shares during trading blackout periods through pre-arrangements with a broker, based upon specified guidelines and parameters set forth in the trading plan. Shares of the company purchased by subsidiaries are not counted as part of the company's authorized repurchase program.

About CDC Corporation

The CDC family of companies includes CDC Software focused on enterprise software applications and services, CDC Games focused on online games, and China.com focused on portals for the greater China markets. For more information about CDC Corporation (NASDAQ: CHINA - News), please visit www.cdccorporation.net.

About CDC Software

CDC Software, The Customer-Driven Company™, is a provider of enterprise software applications designed to help organizations deliver a superior customer experience while increasing efficiencies and profitability. CDC Software's product suite includes: CDC Factory (manufacturing operations management), Ross ERP (enterprise resource planning) and SCM (supply chain management), CDC Supply Chain (supply chain management, warehouse management and order management), Pivotal CRM and Saratoga CRM (customer relationship management), MarketFirst (marketing automation and lead management), Respond (customer complaint and feedback management), c360 CRM add-on products, industry solutions and development tools for the Microsoft Dynamics CRM platform, Platinum HRM (human resources) and business analytics solutions.

These industry-specific solutions are used by more than 6,000 customers worldwide within the manufacturing, financial services, health care, home building, real estate, and wholesale and retail distribution industries. The company completes its offerings with a full continuum of services that span the life cycle of technology and software applications, including implementation, project consulting, outsourced business services, application management and offshore development. CDC Software is the enterprise software unit of CDC Corporation and is ranked number 12 on the MBT 2007 Global 100 List of Enterprise and Supply Chain Management Application vendors. For more information, please visit www.cdcsoftware.com.

About CDC Games

CDC Games is one of the market leaders of online and mobile games in China with more than 120 million registered users. The company pioneered the "free-to-play, pay-for-merchandise" online games model in China with Yulgang and launched the first free-to-play, pay for merchandise FPS (first person shooter) game in China with Special Force. Launched in 2007, Special Force has consistently ranked in the Top 10 downloaded games in China. Currently, CDC Games offers six popular MMO online games in China that include: Yulgang, Shaiya, Special Force, Mir III, Shine and Eve online. In March 2007, the company announced the formation of CDC Games Studio to establish strategic relationships with selected games development partners to accelerate the development of new, original online games for China and other targeted global geographies. Through its CDC Games International (CGI) subsidiary, the company is planning launches of Lunia online in the U.S. and Minna de Battle in Japan along with several new games planned for southeast Asia, further strengthening its position as a global publisher of online games. For more information on CDC Games, visit: www.cdcgames.net.

About China.com Inc.

China.com is a leading operator of Internet portals, serving a broad range of audiences in China. In 2006, it was chosen as the first company to host Google's Video Adsense which serves video ads targeted at China's English-speaking audience. China.com also was appointed by the Jilin government as the exclusive web sponsor of the 2007 Asian Winter Games. China.com was listed on the GEM of the Stock Exchange of Hong Kong Limited on March 9, 2000. In December 2000, China.com Inc. was admitted as a constituent stock of the Hang Seng IT and IT Portfolio Indices.

Cautionary Note Regarding Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995, including statements relating to the completion and effect of the proposed share repurchase program and other statements which are not historic fact. These statements are based on management's current expectations and are subject to risks and uncertainties and changes in circumstances. There are important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, including the following: (a) the ability to realize strategic objectives by taking advantage of market opportunities in targeted geographic markets; (b) the ability to make changes in business strategy, development plans and product offerings to respond to the needs of current, new and potential customers, suppliers and strategic partners; (c) the ability to integrate operations or new acquisitions in accordance with the company's business strategy; (d) the effects of restructurings and rationalization of operations; (e) the ability to address technological changes and developments including the development and enhancement of products; (f) the ability to develop and market successful Advanced Mobile Products; (g) the entry of new competitors and their technological advances; (h) the need to develop, integrate and deploy enterprise software applications to meet customer's requirements; (i) the possibility of development or deployment difficulties or delays; (j) the dependence on customer satisfaction with the company's software products and services; (k) continued commitment to the deployment of the enterprise software solutions; (l) risks involved in developing software solutions and integrating them with third-party software and services; (m) the continued ability of the company's enterprise software solutions to address client-specific requirements; (n) demand for and market acceptance of new and existing enterprise software and services and the positioning of the company's solutions; (o) the popularity of CDC Games' existing and new games; and (p) the continued growth of the online games industry in Asia. Further information on risks or other factors that could cause results to differ is detailed in filings or submissions with the United States Securities and Exchange Commission made by CDC Corporation in its Annual Report for the year ended December 31, 2006 on Form 20-F filed on July 2, 2007. All forward-looking statements included in this press release are based upon information available to management as of the date of the press release, and you are cautioned not to place undue reliance on any forward-looking statements which speak only as of the date of this press release. The company assumes no obligation to update or alter the forward looking statements whether as a result of new information, future events or otherwise.



Contact:
CDC Corporation
Investor Relations:
Monish Bahl, 678-259-8510
[email protected]
or
CDC Software
Media Relations:
Scot McLeod, 770-351-9600
[email protected]


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Whoops! Posted on wrong thread.

"HIHO" Threads have been Merged.
Please use the search before starting new threads on a Stock Pick.
Chances are a thread already exist.
So why not post whatever you have to comment about on that pick to that thread.
"Simplicity" My fellow traders.        
All history on a stock pick in 1 thread is awesome.       

Thank You....and good luck with all your trades....make some $$$ 


I will leave you the chart while I am in this thread.....
Below is the 1 year chart...