Bought:
5,000 Sihuan @ $0.76
10,000 ChinaWheel @$0.94
Why buy Sihuan?
I have been impressed by the high ROE and profitability of this company. Its hospital distribution network is set to double in the next few years. The key drug Kelinao has been selling like hot cake. It takes a lot of patience to realise its full valuation. There are few high profile investors who got the placement shares at the IPO.
Why buy ChinaWheel?
The production capacity may triple by 2010 from the current 3.6m wheels p.a. making it one of the largest producer of aluminium alloy wheels in China. It gives investors a direct exposure to the fast growing auto sector. Current valuation is still cheap with forward PE of less than 10.
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