“Monopoly on Chinese Air Travel?”

This one came to me in an actual envelope, believe it or not … and it was on paper!

Wow, these guys have some crazy ideas!

Actually, I hear anecdotally that the direct mail efforts by a lot of the newsletters are still quite active — it’s a lot more expensive for them, but they know that the people who have most of the money and are most attuned to the offers they can make are baby boomers and older, folks who have not yet given up entirely on the post office. So it must work out pretty well for them.

This one is for Asian Growth Stocks, which I’ve not heard of before, from editor Bryan Tycango. He’s got three recommendations for us, so I’d better get started …

First?

“Turn $5,000 into $57,900 in a small company that gets $1 for every plane ticket sold in China”

“Air travel is growing three times faster than China’s roaring economy. It’s been growing at an average of 31% a year for 12 years … right now, China is building 97 new airports and buying 3,200 new jet aircraft”

(He didn’t mention this, but they’re also setting an ambitious plan to develop their own jumbo jets to compete with Boeing and Airbus … though that will be a long time coming, in all likelihood.)

This is a direct play on air travel in China, apparently, and it’s trading for well under $1 a share (so no, it’s not Ctrip).

The prospects? “Short term, I think the shares will double your money
over the next twelve months … four to six years from now, I think the shares are headed for $9 and up.”

The Thinkolator had to go all the way to Hong Kong for this one (in
cargo, the Gumshoe sadly did not accompany), but I can tell you that
this firm is …

Travelsky Technologies (0696 in Hong Kong, TSYHF on the pink sheets.
I don’t see any indication of the pink sheets volume, but it does go
at a premium of a couple pennies over the HK price, if the current
price is any indication)

I had never heard of these guys before, so I do like that — always fun to learn about a new company. I don’t know much about them, but they do seem to have a monopoly on the technology for processing ticket reservations in China– so it comes with some signfiicant regulatory risk, since I would assume that over time, China will want to modernize and bring in new competitors to upgrade the systems.

For now, though business must be good … feel free to share if you look into this one and find anything exciting.

Sorry for the limited blather on this one – and for tabling the other two stocks. Power outage for a storm today, so I’m thumbing this on a Blackberry. Don’t try this at home!

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11 Comments on "“Monopoly on Chinese Air Travel?”"

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Asia Joe
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Asia Joe
June 4, 2008 9:35 pm

Interesting to note the major shareholders.
China TravelSky Holding Company (22.35%)
Shanghai Industrial Investment (15.18%)
China Southern Air Holding Company (13.11%)
Templeton Asset Management (H Share) (13.05%)
China Eastern Air Holding Company (12.32%)
China National Aviation Holding Company (10.06%)
OppenheimerFunds, Inc (H Share) (6.11%)
J.P. Morgan Chase & Co. (H-shares) (5.76%)

so basically the major airlines in china hold about 35%. Stock was up at 9 hkd and went down to 6 hkd pretty much in step with the rest of H-shares. Is about 6.7 hkd now. It seems to perform pretty much with the market.

bruce rappaport
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0
bruce rappaport
June 5, 2008 9:35 am

do you think the olympics will give at least a short term rally?

joost
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0
joost
June 5, 2008 9:51 am

This Bryan worked years ago for an other newsletter on Asian stocks. Was pretty good with a chinese brewery on HKEX 168

ctripper
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ctripper
June 5, 2008 10:44 am

No info on China Travel Sky – but I will be buying a bit. China domestic travel is set to explode phenomenally (I am picking up habit from these newsletter guys)

0168.HK is Tsingtao Beer – the most famous China beer in and outside of China.

The other highly-visible and premium alcohol companies include Kweichow Moutai and WuLiangYe – both which are only listed in Shanghai, and had been speculated sky-high…

joost
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0
joost
June 5, 2008 10:56 am

ctripper,
are you familiar with a vietnamese brewer with local quotation?

SageNot
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0
SageNot
June 5, 2008 3:05 pm

Was Tsingtao Beer one of the 3 picks? We’ve drank some of it more than once, not bad. But the stock has stalled considerably.
http://finance.yahoo.com/q/ta?s=TSGTF.PK&t=2y&l=on&z=m&q=l&p=m50,m200&a=&c=

The Chinese coffee company is acting worse, but I don’t have that URL with me.

Big Mo
Guest
0
Big Mo
June 5, 2008 9:36 pm

10 day average volume is 152.8k shs. on the pink sheets for Travelsky Tech.

Gravity Switch
Admin
11
June 5, 2008 10:50 pm

Sage, if you’re talking about this particular ad, no, none of the three was a beer company. I’ll get those written up shortly, if I remember correctly it’ll be a casino and a water company. Coming soon …

James
Guest
0
June 6, 2008 10:01 am

ctripper, speaking of domestic Chinese travel, it can’t be coincidence that your nickname is the so similar to China’s biggest online travel service ctrip.com.

On a serious note, I agree with you about there being much more growth in Chinese domestic travel to come.

The Chinese effort to compete with Boeing or Airbus is some way off, but they have already developed smaller passenger jets to fly on regional routes. I suspect that building larger aircraft is a larger priority for them then is made public.

ctripper
Guest
0
ctripper
June 8, 2008 5:25 am

Joost,
All is not good with the Vietnam economy or stock market, economist are predicting they are heading for a Thailand-style crash circa 1997. Inflation is rampant at 25% and deficit is widening.

Vietnam largest beer brewer is – Saigon Beer Alcohol Beverage Corp (Sabeco). It makes the iconic Saigon Beer and 333. It lists in the Saigon stock market which is not easily traded unless you are based in Vietnam.

Btw, HSBC research did a downgrade on Travelsky Techonologies in May – to HKD 4.7, on slackening domestic air travel growth numbers.

Peter
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0
Peter
June 9, 2008 9:22 am

Where do you find information on this company…none with the SEC

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