Watch List

Techtronic 創科實業(link: 669.HK,現價$2.4)
as a restructuring play, high risk & high expected return. Market leader in branded home improvement equipments with global business and gaining market share from weaker US competitiors.
High indebtedness but was recently able to refinance. Free cash flow very strong. Chairman bought at $2 a couple weeks ago. Trading at 5x '08 EV/EBITDA.

·

Qin Jia Yuan勤＋緣媒體服務 (2366.HK,現價$1.48)

as a growth play, low risk & medium expected return. Just announced stellar FYE 9/2008 results. Market leader. Expecting 30% core earnings growth for next three years. Good industry prospects. Trading at 4x '08 P/E.



· SinoMedia 中視金橋(623.HK,現價：$0.83)

as an asset play, low risk & high expected return. Net cash = market cap. Market leader. Company buying back shares for past two months. '08 is expected to be a huge year in terms of growth. Expecting 20% core earnings CAGR for next three years. Bain Capital had invested a couple years ago at 3x the current price. Good industry prospects. Trading at 3x '08 P/E.



· Regal REIT富豪產業信託 (1881.HK,現價：$0.75)

as a dividend play, low risk & medium expected return. Guaranteed dividends for '08-'10 at 20% given current price, variable for '11 and thereafter (perfect cover for economic downturn in next two years, and probably by '11, things will look better). Economic downturn may also fare better for Regal, a second-tier hotel chain, than for the likes of Shangri-La and Mandarin Oriental, as tourists become more cost-conscious. Chairman of Regal has been buying back shares for many months and public float diminishing (i.e. weak hands going into strong hands), paving way for stability in share price at this level.


Suggest average-in strategy for above stocks (i.e. buy some every month for next six months). Holding period should be five years. Don't bother if plan is to day-trade.