Friday, March 18, 2011

K Wah purchased (2)

This morning I doubled my investment in K Wah (HK:173) paying HK$3.19 for this purchase. This compares to HK$3.25 paid for the first purchase on Wednesday. My average purchase price is HK$3.22.

As an aside, an limit order to purchase more shares in Xtep (HK:1368) at yesterday's close of HK$4.93 failed.


J- said...

Nice, I've also also bought some K Wah a few weeks ago.

Any views on the small cap Victory City?

Also, are there any HK-listed REITs that you fancy?

J-D said...

Also; how do you feel about Pacific Basin? I think you previously bought and then subsequently disposed of their shares a while ago?

traineeinvestor said...


I looked at Victory City last year when I added several small caps to the portfolio. IIRC, at the time, I think I preferred others but I will give it another look.

I'm afraid I can't comment on the REITs.

Pacifc Basin is a well run company with a good business strategy which is well executed. Unfortunately, it's in a sector (bulk shipping) which is suffereing from chronic oversupply. That said, the shipping industry has historically been characterised by boom-bust cycles. Anticipating the next stage of the cycle would be well rewarded.


traineeinvestor said...


I took a brief look at Victory City last night. At first glance, it does not appeal:

1. it has more gearing that many of the other companies I have looked at

2. it is largely a manufacturing business based in the PRC - like others it is experiencing rising costs and the impact of rising costs (labour, raw materials) are bing compounded by a strenghening RMB

3. the industry is relatively low tech - it is comparatively easy for competitors to enter the market and, historically, that happens often

4. there were several connected transactions - while none were necessarily bad, I prefer to see less

On the positive side, the investment in updated and expanded facilities may go some way towards mitigating the cost pressures.

If I'm missing something, please let me know and I will have a more detailed look.


JD said...

Many thanks for taking the time to look into this. I was interested because of the low P/E - at a market cap of 2b, it could earn ~330m for the whole year if we extrapolate from the latest interim, giving a ratio 6 or so, also the P/B is rather low as well. Because its low tech they might be able to move some of their production to a low labour cost SE asian country? Also as you mentioned the possible benefits of modernising their equipments.

Many thanks for your views!