This workshop is specifically designed to provide an overview of China. We will explore the factors which have shaped China into a world economic powerhouse, while focusing on the primary catalysts for growth in 2009 and beyond, including specific industries and sectors which we believe have the best long term growth potential. This teach-in will adequately equip investors and advisors with the necessary knowledge to make sound investments and/or provide prudent investment advice, while also understanding the key attributes which international based companies must possess to be successful in the public markets.
The reasons we believe investors should consider having an allocation to China include the following:
1) China is the 3rd largest economy. Its growth rate is superior to anywhere else in the world and during 2008 China comprised 25% of the world’s GDP growth.
2) China has a great balance sheet, supported by nearly $2M in FOREX Reserves and runs a budget surplus – the US has about $11 Trillion in Debt and will run a deficit of over $1 Trillion this year alone.
3) Chinese consumers save approximately 25% of their income annually vs. <1% for the US and Europe. As interest rates come down so will interest income earned on savings. We believe this will support increased investment and consumption.
4) Changing dynamics of millions of people who are reaching middle class and thus creating a strong domestic consumer market. Estimates from Ernst and Young believe there will 325 million in this segment by 2010.
5) Chinese entrepreneurs are driven, resourceful and many have only recently experienced the success of capitalism during the past decade. This will keep the drive alive.
6) Government Stimulus Package - $578B on infrastructure, healthcare, agriculture. In purchase power parity this is much more significant than the US stimulus package and represents 18% of GDP vs. 10% for the US.
7) China and Hong Kong markets trading at similar valuations to Asian Crisis of late 1990’s – less than 10x earnings.
8) Companies with superior growth rates and strong balance sheets trading at extremely low multiples.
“Please contact us if you are interested in one of our team members making a full presentation”.
