Renesola and Another Dear John Letter

Tuesday, 21 September, 2010 19:23 Written by Paul 0 Comments

Readers of Investor Trader may remember my brief tryst with West China Cement which came to a premature end back in May of this year.

Sadly, growth saw them forget their roots, pull their AIM listing and try to make it in the big city. In this case, the big city being Hong Kong. And as it turns out, the big city has been quite kind witnessing gains in WCC in excess of 20% in the month since they headed east. I was willing to take that one on the chin. Let bygones be bygones and all that. Until……

Until yet another Dear John letter from my broker. This time it’s my beloved Renesola (another Chinese share) that are pulling their AIM listing and heading for another big city, well big apple to use the local parlance, New York. And no, my broker doesn’t trade on the NYSE. You seeing the theme here?

Anyway, to cut a long story short, I can either hunt down a broker that can trade across the pond or I can give up on my Renesola’s and keep my hard-earned in UK listed shares. I’ve got until early November to make my decision.

The spanner in the works is that Renesola is really flying at the minute making the timing all important.

I’ve been in and out of Renesola for years now and it’s the one share that I have consistently profited from. I’ve bought in at under a pound and I’ve sold at over six pounds with lots of buys and sells in between (and always for a profit I might add).

Currently Renesola sits just north of £3.50. Our portfolio holds 1,000 SOLA.L with an average purchase price of £1.12. If we sold today we’d be looking at a triple-bagger, not too bad by any standards, but it’s the forcing of my hand that I find hard to stomach.

So, what to do? Would you be looking at bailing out after a month like the one below?

Watch this space.

Purchase – Hutchison China Meditech

Wednesday, 28 July, 2010 11:44 Written by Paul 0 Comments

Anyone who’s dropped by Investor Trader more than once over the journey would know of my penchant for Chinese investments. I have no defense. In the short time we’ve been online we’ve held Renesola, West China Cement, China Biodiesel and Asian Citrus. Hell, even Synergy Health had a Chinese interest. That’s a fair slice of China in our investment pie.

China may be a juggernaut that’s cooled its jets a little of late (purposefully I might add) but the massive potential for a well-managed Chinese company constantly has me on the lookout for more.

So after a little homework it’ll come as no surprise that we’ve added a bunch of Hutchison China Meditech to our portfolio – 520 shares to be exact, that were purchased for £3.14 a pop on 19th July 2010.

The crux of the buy: Anyone who’s picked up a newspaper in the past decade knows that times in China, they are a changin’. China’s move from a predominantly agrarian economy to a 21st century economic super-power brings with it certain knock on effects. Health-care reform is now firmly in the sights of Party leaders and that’s where Hutchison China Meditech step in.

Chinese authorities have recently released a list of 307 primary medicines that state-owned health-care centres must stock by 2020. Hutchison China Meditech produces 17 of these, 16 of these are generic (predominantly over-the-counter and prescription traditional Chinese medicines) but one – SXBX, patented until 2016 – is not. This alone is more than justification for a little investor excitement.

Hutchison China Meditech also has its finger in a couple of other pies: it owns one of China’s largest pharma R&D businesses which in all likelihood, will be floated on Nasdaq in the next couple of years. HCM.L is also involved in an organic foods joint venture which has the potential to become a very significant contributor to profits in the coming years.

As always do your own homework, the Hutchison China Meditech website is a good place to start. Thanks again for dropping by.

China Biodiesel Tender Offer and Delisting

Monday, 14 June, 2010 10:47 Written by Paul 0 Comments

And trust me, it is a tender offer.

After purchasing our initial tranche of 1,960 China Biodiesel shares back in July 2009 for 6.6 pence a share and topping up a short week later at 10.06 pence (yep that’s a 50% rise in that short week), we were averaged into CBI.L at 9.29 pence a share. And whilst the share price did go on to test 20 pence in August 2009, since then there’s been a lot of market apathy – time spent between 8 and 14 pence. Lately it’s split the middle of those highs and lows and has camped out around the 11 pence mark and to be honest unless there was some big news coming fast, the way things are, I expected nothing but a gradual slide from CBI.L over the coming months.

Here’s a few of the reasons we jumped on board with China Biodiesel in the first place. Though I may dress it up a little, my justification was almost purely chartist at the time. It’s hard for the risk craving (it’s almost a sickness) to watch a penny share go from 2 pence to 6 and not want to have a little taste of that action.

Anyway, back to the tender offer. It came in at 16.5 pence. And when all is said and done and everyone is paid up, China Biodiesel will be ditching its AIM listing. Here’s a little of the reasoning behind the decision:

The share price performance of the Company has recently been disappointing and a source of frustration for the Board. The Directors believe that the development of the business and its growth potential has not been adequately reflected in the value attributed by the public market to the Ordinary Shares. The Directors believe that the reasons for this under-valuation are multiple and complex, but principally include a lack of liquidity (common to many small cap companies) impacted by the structure of the Company’s share register and also a lack of interest in Chinese small cap companies.

So as the sun comes down on China Biodiesel we’ve cleared 7.21 pence a share on our 8,792 shares to stand roughly £634 to the good before costs on our £817 initial investment. All that in a little less than 12 months. Nothing corny about that!

A Little Renesola Profit Taking

Thursday, 13 May, 2010 11:26 Written by Paul 0 Comments

A few days back I wrote about Renesola testing new recent highs in the lead-up to results and how the situation in Greece threw a bit of spanner into the works. Well results have come and gone, and not bad results at that, but having a bit of a conservative edge about me of late, I took a little profit, realising 400 shares at £2.41 a share for a return before costs of £964. We were averaged into Renesola at £1.12 so we more than doubled our money and we’ve still got 1,000 SOLA’s sitting in our portfolio mix.

There are one or two potential purchases we’ll be looking closely at in the coming days using the stockpile of cash we’re sitting on after our West China Cement sale, so stay tuned. And don’t worry too much about that conservative edge, I’m working on ridding it as a bit of a priority.

West China Cement – A Love Story

Wednesday, 12 May, 2010 12:13 Written by Paul 2 Comments

It’s with a heavy heart that today I write about my sale of West China Cement.

Our brief love affair – this time around, for we have loved before – began in July 2009 when I picked up 153 of these little grey beauties at £1.70. Watching our love take flight, two short weeks later I added another 221 shares at an already soaring £2.57. My 374 shares were averaged in at £2.21, for a total outlay of £828.21 before costs. Ahhh, the early days of a relationship.

At the dawn of our wonderful time together West China Cement surged through £3 before flitting around £4 for a spell. She then busted through £5, then £6 and briefly flirted with £7. What a beauty!

With a rendezvous with the Hong Kong board on the horizon, I was confident when we met, that her price would be heading in one direction, and one direction only. And WCC.L didn’t let me down. Could it be that I could be holding a five-bagger, hell, even a ten-bagger. Did this tryst have no bounds?

Then the dreaded ‘Dear John’ email from my broker. I’ll cut to the chase……..”we are unable to trade equities on the Hong Kong board”. Heartbreak!

Now it was at this time I had a decision to make. Transfer the shares to another broker – a broker that traded in Hong Kong securities, a broker alas, I did not have – and continue our fling or remember the beautiful times we had together and go searching for other AIM runaways.

I choose the later and I’ll tell you why.

It’s not everyday you land a triple-bagger in ten months – I sold out at £6.60 on the 4th May for a total return of £2,468.40, a profit of £1,640.19 on top of an £828.21 investment.

Moreover, the situation in Greece had kicked in and although I had faith that it would be resolved (patched up) quickly, confidence in the markets for weeks even months following is bound to be dented. A pound had already been knocked off WCC’s recent highs. And at the end of the day we had loved before and chances are we will love again.

Alfred Lord Tennyson put it best when he said, “it is better to have loved and lost than never to have loved at all“. And chances are he hadn’t just cashed in on a triple-bagger.

Now I’m off to open an account with a broker that allows me to trade in Hong Kong. Remember to do a ton of your own research and thanks again for dropping by.

Posts Tagged ‘Chinese Investment’

Renesola and Another Dear John Letter

The Day in Numbers

Our Charismatic Benefactors

Our Friends at Kiva

Investor Trader Categories

Investor Trader Archives

Sites We Dig

Posts Tagged ‘Chinese Investment’

Renesola and Another Dear John Letter

Purchase – Hutchison China Meditech

China Biodiesel Tender Offer and Delisting

A Little Renesola Profit Taking

West China Cement – A Love Story

The Day in Numbers

Our Charismatic Benefactors

Our Friends at Kiva

What We Rant About

Investor Trader Categories

Investor Trader Archives

Sites We Dig