Discussion in 'Stocks' started by stonedinvestor, Sep 20, 2007.

  1. Part of my job as I see it is to give you all some ideas that are not as crazy as others but in the same realm of craziness if that makes any sense. stocks that are still in fascinating lines of business and represent unique opportunities but maybe not four letters in the symbol. So Today I'd like to highlight E House Holdings. A play on Chinese real estate!

    This has been an ugly little stretch if you monitor for break outs, it looked like it was on it's way up $2 & it collapsed. Today it was soaring and gave it all back almost i wanted to cry. Other stocksters would wait till they were nicely up before recommending this stock that's not how stoney plays ball-- you too can have it cheap... FIRST NEG (1) EJ is taxed higher than most Chinese companies (many have exemptions) Look under the hood and you have a real mature situation and a powerful big story highly unlike most Chinese stocks. But with every other Chinese stock of high beta soaring it's just a matter of time before investors settle down and get into one or two quality names. EJ is one of those names. Let me introduce you.

    From the prospectus:

    We are a leading real estate services company in China based on scope of services, brand recognition and geographic presence. We provide primary real estate agency services, secondary real estate brokerage services as well as real estate consulting and information services.

    EJ has been the largest real estate agency and consulting services company in China for three years now (2004-2006). EJ has 2,100 real estate professionals in twenty cities throughout China. In the past five years they've sold 5 million square feet of properties worth $5.4 billion. EJ also operates the only information system that provides up-to-date, comprehensive and in-depth information covering residential and commercial real estate properties in all major regions in China!!! That's huge folks it's like getting a huge real estate internet site for free here (I think)

    Chinese sector leaders in fast growing sectors have done very well in the US market the past few years, usually garnering aggressive multiples. Sector leaders tend to outperform non-sector leader Chinese ipos. EJ would appear to fit in the 'sector leadership outperformer' category.

    EJ has been named "China’s Best Company" from the National Association of Real Estate Brokerage and Appraisal Companies in 2006, and the "Leading Brand Name in China’s Real Estate Services Industry" from the China Real Estate Top 10 Committee in 2006. No LEAD paint here sirs!

    The real estate sector in China has experienced rapid growth with primary property sales revenue growing 38% over the past five years. Primary property refers to the sale of new properties, which is EJ's focus. As such, EJ's clients tend to be real estate developers (big money) who utilize EJ's middle-man services to consult on development and to sell their properties. 82% of revenues in 2006 were from services relating to 'primary' (newly developed) properties. Could they expand into a lower $ market?

    DRAWBACK 2 (after the tax issue)
    Governmental Control - Since 2006, the PRC has instituted a number of initiatives to slow the swift property growth rates. These include: requiring that at least 70% of the land approved by a local government for residential property development for any given year be used for developing low-to-medium cost and small-to-medium size units and low-cost rental properties; 70% of construction be for 'small unit space' properties; increasing the down payment required for larger properties; imposing a resale tax on properties held less than five years.

    - EJ has very high 'receivables' for their revenues stream. The June 2007 quarter saw approximately $23.5 million in revenues, while receivables on the book totaled $48.5 million. This appears due to EJ receiving payment for services only after a development (or phase of development) has been completely sold. EJ reports revenue upon each sale, however they do not receive the actual monies until the entire development project has been completed and all units sold.

    Tax Rate - EJ's current tax rate is in the 25%-30% ballpark.

    Historically, EJ has booked an outsized revenue number in the FOURTH quarter of the year. For example, in 2006 quarterly revenue numbers were (in millions) $4, $10, $8 and $34. I'm making a bet for this 4th qtr. That they will just blow the number away.

    2006 - Revenues were $56 million, a 44% increase over 2005. Operating margins were a strong 44%. Net margins were 34%. Earnings per share were $0.24.

    2007 -impressive 100%+ revenue growth in Operating margins should improve to 50%!
    You just let this plow ahead ugly sytyle folks!- I need to see this up to $25 before I feel good enough about it to give it to my mother but I give it to you all now. ~ stoney
  2. You've just cited propoganda, in various forms, to move paper.

    It's all presently or eventually reflected in PRICE.

    Incidently, PRICE as a common denominator, right or wrong, good or bad, is what you transact in.
  3. Well folks we can type in the end of this thread's title.

    Last Trade: 23.23
    Trade Time: 9:47AM ET
    Change: 0.97 (4.36%)
    Prev Close: 22.26

    This is nice action from $21!!! Now we have defined some new support on a stock in the low $20's I don't think we will see $18 again, keep in mind EJ likes to break your heart and reverse $2 on a dime... you may or may not get another chance to buy this @$22 but the risk is that this will be off to the races tomorrow! ~ stoney
  4. Well everyone lets fill in the blanks.

    $18- $22- $18.50 - $21 - $23.50 - $ 22.90 Do I have to tell you where this goes next?

    This is a beauty folks, all you stodgy old timers who scoff at Chinese stocks as they go up and up.Here is a legit one. China's E-House Holdings Limited (EJ), is a residential real estate service company, which was incorporated on August 27, 2004.E-House's principal focus consists in its real estate brokerage services, comprising three metropolitan areas within China, including Shanghai, Wuhan, and Hangzhou, as well as in Hong Kong and Macau. Did that say Macau!

    In its Primary Services, E-House develops a signature identity and brand that are distinctive to a project, establishing long-term awareness of that particular project among prospective purchasers.

    In relation to the Secondary Market, E-House engages in listing and brokerage services including both sales and rentals with the main Shanghai, Wuhan and Hangzhou areas as primary targets. As of March 31 of 2007, E-House had 75 stores in Shanghai, 17 stores in Wuhan and 16 stores in Hangzhou.

    ** Here's this kicker-E-House does offer an enhanced service by its real estate information database and analysis system called CRIC (China Real Estate Information Circle system). System provides up-to-date and in-depth information covering residential and commercial real estate properties in all regions in China. This has proven to be a very effective tool, among other things for E-House - against competition- Century 21 and Coldwell Banker. Boo!

    E-House is #1 folks. It has rapid growth.Folks this company seems uniquely positioned to benefit from China's present boom and their long-term projected growth. At least through the Olympics as they say.

    E- House's market cap stands at $1.14 billion. This is Big Cap for god's sake and it's going to go up $10 I tell you. well at least $8- It likes to jiger back and discourage you I will keep filling in the numerical sequence as we make our way to $30 and beyond. Profit margins have come in at 34.42%. Operating margins posted at almost 50%. Revenues, $82.36 million for a Net income of $23.68 million. Kaching.

    *Growth estimates for next fiscal '08 are projected at 39.2%. ~ stoney
  5. Wow put on a big print high today before backing off as it always does. A near perfectly trading stock. We are now up close to 18% on this pick. >We Need This to $29 by end of week. What can YOU do to help? ~ stoney