China’s education services firms may not be as high-profile as big names like Baidu (Nasdaq: BIDU) or Geely (HKEx: 165), but industry leader New Oriental Education (NYSE: EDU) is showing it can be equally profitable and notch enviable growth that would make many of the big boys jealous. While high inflation may be eroding Chinese consumer appetite for many discretionary items, education for themselves and their children is clearly not one of those, as evidenced by New Oriental’s latest results which saw its revenue rise nearly 60 percent and net income more than double for its fiscal quarter through the end of May. (company announcement) It forecast more modest revenue growth of about 35 percent in the important summer holiday quarter, though many Chinese firms are famous for low-balling such forecasts so they can surprise to the upside if their business does well. As a final piece of good news — and relative rarity for Chinese New York-listed companies these days — New Oriental announced a 4-for-1 stock split, a nod to the fact that its stock has doubled over the last two years and now trades near its all-time high. The company’s price-to-earnings ratio is a bit rich at more than 50 times, but its strong prospects seem to at least partly justify that high figure if it can really keep its profit growing at such a staggering rate. Given the ultra-competitiveness of China’s education system and the fact that everyone — from the wealthiest to the most average citizen — is willing to spend big bucks to educate their kids, I’d say the prospects look good for industry leaders like New Oriental and TAL Education (NYSE: XRS) for at least the next few years.
Bottom line: New Oriental and other education services firms still have lots of room for growth, feeding on Chinese desire to improve themselves and their children through extra study.
中国的教育服务公司可能没有百度<BIDU.O>或吉利<0175.HK>等公司那麽高调，但行业领跑者新东方<EDU.N>却在证明，教育服务业也同样可以赚钱，实现令知名大公司都艳羡不已的增长。虽然高通胀可能令中国消费者不再愿意在许多非必需品上花钱，但对於他们自己和他们的孩子来说，教育却不在此列。新东方最新财报表明，公司第四季营收增长近60%，净利润增长了一倍多。该公司并预计，暑期这一季度营收将增长35%。还有一条好消息是，在纽约上市的新东方宣布股票1拆4计划，这说明过去两年里，其股价翻倍，并且目前其股价接近历史高点。新东方的市盈率高於50倍，如果新东方能保持现有的利润增速，其强劲的前景似乎至少可以解释为何这一数字会如此之高。考虑到中国竞争激烈的教育体制，以及全民都愿为孩子进行教育投资，我觉得新东方和学而思教育集团<XRS.N>等行业领头羊至少在未来几年的前景是很光明的。
一句话：鉴於中国人愿意为自己和孩子充电进行投资，新东方和其他教育服务公司还有很大增长空间。
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without seeming to care about copyright protection before finally becoming “enlightened”, and have no doubt that its change of heart is coming at least in part due to heavy pressure from regulators who are trying to stamp out China’s rampant piracy. While it’s one thing for a little old lady from the countryside to sell pirated DVDs from a cart on the side of the street, it’s quite an embarrassment for Beijing when many of its top Internet companies like Baidu also engage in such practices, and clearly we’re going to see a move by major Net firms to slowly phase out their sites that encourage copyright infringement over the next few years. As that happens, look for more deals like the one just announced by Baidu, and also look for the company and its peers to suffer a bit when they finally close down their popular but illegal song- and video-swapping services.
The latest resignation of a top audit committee member in the solar sector, this time at LDK Solar (NYSE: LDK), hints that major new storm clouds could be on the horizon for an industry already struggling with its worst ever downturn. LDK announced late on Monday in the US that Louis Hsieh, one of its independent directors who also happened to chair its audit committee and was a member of its corporate governance committee, has resigned for unspecified reasons after several years on the board. (
users with the ability to post longer messages, as well as photos and other multimedia offerings. Does this sound a bit like Facebook? The beta site at qing.weibo.com says the service already has about 700,000 users, though I’ve no doubt that is probably a bit inflated. Still, considering Google’s (Nasdaq: GOOG) early success with its new SNS product, Google Plus, despite being years behind Facebook, I’d say this new Qing product, which smartly draws on Weibo’s huge user base, stands a strong chance of success and could quickly pose a major challenge to industry leaders Renren (NYSE: RENN) and Kaixin, as well as SNS products being developed by established net giants like Tencent (HKEx: 700). From a broader perspective, Qing will undoubtedly be coupled with Weibo into a single SNS business unit at Sina, which is hoping to quickly build up the company for a blockbuster IPO in the next two to three years. It’s still too early to say if Qing will be able to make big headway in the market, but I would say the chances are good that it could quickly catch up with and possibly even overtake Renren or Kaixin in the next couple of years.
Move over, QE II. Chinese banks, unsatisfied with the hundreds of billions of dollars they raised to bolster their balance sheets just two years ago, appear to be gearing up for Capital Raising II, with China Merchants Bank’s (HKEx: 3968 Shanghai: 600036) announcement that it will raise up to $5.4 billion through simultaneous rights offers in Hong Kong and Shanghai. (
My initial skepticism about China’s plans to consolidate its fragmented cable TV sector is rapidly fading, with local media now reporting the company created to consolidate the industry is set for official launch in July or August as the consolidation drive gains momentum. (
frequent subject of merger talk with SMIC or venture-backed Grace Semiconductor, another smaller struggling player. In fact, David Wang was a former CEO of Huahong NEC, but was clearly only an executive at the company and probably had little clout to pursue an acquisition of his former company after arriving at SMIC in late 2009. Zhang, on the other hand, as chairman of both SMIC and Huahong, is in a perfect position to push such consolidation, and perhaps even bring Grace into the mix, as that company’s stakeholders have long wanted to sell off the investment. If all goes according to plan, I would expect to see SMIC merge with Huahong NEC in the next 12 months, and perhaps also with Grace during that time, to create the world’s clear number-three contract chipmaker. Handling such a difficult merger would be tough for the most experienced of executives, and will be even more difficult for whoever SMIC names as its new CEO. For that reason, I’d look for lots of problems with this company over the next two years, and high volatility in its share price as it seeks to find its new footing.
Chinese oil majors have long feasted on the country’s oil reserves, which Beijing essentially gives them for free, but CNOOC (HKEx: 883; NYSE: CEO) is quickly learning that nothing in life is really free as it and its partner grapple with a stubborn oil spill in the country’s Bohai Bay. In the latest setback for that project, being developed by ConocoPhillips (NYSE: COP) but 51 percent owned by CNOOC, China’s ocean watchdog has ordered the shutdown of two platforms at the field and an environmental official is calling the leak a “disaster” (
that this move seems to reflect a recent acceleration of new initiatives by Ctrip, in sharp contrast to a much slower approach in the past. The company’s list of other recent initiatives is quickly growing, including hotel brand management (
