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Lyxor China Enterprise (HSCEI) – Buying into the Great Dragon story

Posted by Adrian on January 25, 2007

Review : A great opportunity for investor to own ‘the proxy to China economy’ the safest way.  You are purchasing a set of Top & Best run China companies.  Current projection of China’s and India’s growth are estimated to be in an explosive figure.  With Beijing’s hosting the Olympic in 2008 (next year), companies are all set to make another leap forward to gain market share. 

1) The telecom industry is set to receive approval from the government to launch 3G.

2) The textile companies are preparing to distribute sportswear to coincide with the Olympic.

3) Energy companies set to increase distribution capacity towards 2008.

4) Huge television rights and contracts deal.

5) Housing loans are growing together with housing demand in major China’s city.

ROI based on last 5 years : 30 % – 32 % p.a

Current valuation : 19 – 20 PE (moderate expensive), Forward PE looks attractive for China growth

FACTS
 

CPF approved

No
First Listing in Singapore 19 Oct 2006
Listed Price $9.50 (Trading at $12 – $13 in Jan 07)
Traded in Currency US$
Bloomberg Code ASI CP
Reuters Code LASI.SI
Dividends Yearly

Top 10 Holdings Companies

Petro China

China’s largest energy company.
Bank of China Second Largest bank in China with presence in HK.
China Life Listed in the NYSE, China Life is the largest insurance co. in China life insurance market.
China Shenhua China Shenhua is an integrated coal-based energy company.
China Communication Bank Among the top 5 leading banks in China.
China Petroleum & Chemical Known as SINOPEC, is the largest refiner and petrochemical producer in China.  The government owns 71% of SINOPEC.
Bank of Communications Known as BoCom is among the top 5 lenders in China.  19.9% own by HSBC.
Bank of China Known as BOC, is the second largest bank in China (top 30 in the world).
China Telecom China’s largest fixed service telecommunications provider, which includes internet, data and PAS wireless system.
Ping An Insurance China’s second largest life insurance company.  HSBC owns 19.9% of Ping An through its wholly-owned subsidiary.
Aluminum Corp of China China’s largest aluminium producer.

Allocation of Sectors

Financials : 46.7%

Energy : 29.7%

Industrial : 6.6%

Basic Materials :  5.5%

Communications : 4.5%

Utilities : 2.9%

Consumer, Cyclicals : 2.3%

Consumer, Non-Cyclicals : 1.8%

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