“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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Asia Joe
Guest
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.

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

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

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joost
Irregular
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
Guest
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…

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joost
Irregular
joost
June 5, 2008 10:56 am

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