Tuesday, October 26, 2010

Chinese IPO's Flying Again as We Revisit Fall 2007 - MCOX, XRS, CCSC

As the market hit all time highs in fall 2007 (the financial calamity had begun but investors trusted that the Fed had everything under control) the dominant themes were (a) anything commodity and (b) anything Chinese.  Many days we saw Chinese stocks jumping 20-30-40% in a day, especially those of the $1-$5 variety.   The past few weeks has seen a return to this behavior - frankly in both (a) and (b).

Quite a few Chinese IPO's have priced lately and they are also booming.  The only one I am familiar with is TAL  Education Group (XRS) which I was doing some research on but never pulled the trigger on - it is sort of like New Oriential & Education (EDU) which I've been in, in the past.  I am posting a few charts and let me say they UNDERstate the moves because they do not show the IPO price i.e. the price institutional shareholders are granted shares so they can flip to the retail guy and make 50-100% in an instant.  (aka "being a sophisticated investor")

Zoom Zoom

Today's IPO - an online clothing retailer MCOX - opened up 60%, and higher now.  A quick look at the name shows 40%ish year over year growth, but 40%ish drop in income year over year - no problem.
  • Mecox Lane's shares on Monday priced in their initial public offering above the expected range. The company, which sells clothing and accessories to young, urban women, sold 11.74 million American Depositary Shares for $11 each, raising about $129.17 million.

Chinese fast food company CCSC - up 100% from IPO price
  • Shares of Chinese fast food company Country Style Cooking Restaurant Chain Co  are trading more than 100 percent above their IPO price.

XRS - up about 80% from IPO price in just days
  • After-school tutoring company TAL Education Group, which debuted last week, is now trading nearly 80 percent above its IPO price.

No positions but welcoming a return to fall 2007 redux; thanks Ben

Disclaimer: The opinions listed on this blog are for educational purpose only. You should do your own research before making any decisions.
This blog, its affiliates, partners or authors are not responsible or liable for any misstatements and/or losses you might sustain from the content provided.

Copyright @2012 FundMyMutualFund.com