The China doemestic stock market resumed trading after a week of recess (for the Lunar New Year). To the surprise of most people and an old Chinese saying “Kai Meng Hong”, the market opened down instead of up. It appears people are still nervous about the US economy and its fallout effect to China economy.
One thing I am sure is in the last year many public companies in China had record earnings, but in large part the earning is attribute to “capital gains” (realized or unrealized). One example as the shirt maker Ningbo Younger (600177), it made more money from the Citic Securities (600030) last year, than it made on making/selling shirts in last 10 years. So it makes sense for them to sell some of the stocks, and put the money in to bank (vs. seeing the money vaporizing when the market go down). Note Ningbo Younger is increasingly put the money in equity and real estate investing. Now we are talking about creating shareholder value.
Of course the biggest theme this year in China, is Beijing Olympics. It will be interesting to see how the tourism industry will benifit. I heard last year Home Inns (HMIN) is charging 3 or 4 times normal rate for the hotel bookings during Olympics. This is a one time event though, just like GM booked a 39 billion (due to tax) yesterday. What we are really looking for, is secular growth, the kind of growth sustains after the Olympics. Along those lines, I see mobile computing as one of the area has potential.