Stock Pick : Buy GBG.ASX @$0.26

Open position in GBG.ASX at $0.26.

Reason: Strong production in Karara Project and revenue growth by 95% from 2013-2014 because of China import.

Australia Stock Exchange (ASX) - Gindalbie Metals Limited (GBG)

Perth based Gindalbie Metals Limited (GBG) has a portfolio of exploratory iron ore assets in Western Australia but the company’s immediate future rests with the Karara iron ore project, a joint venture with Chinese steel and iron ore giant, AnSteel. With a market cap of only $386 million, the partnership with AnSteel gives Gindalbie a decided funding advantage. The company has no long term debt following successful capital raises in 2011 and 2012. The Karara mine is in production and the company expects to reach 5 million tonnes yearly production by FY 2014.

Major analyst opinion on the stock ranges from moderately skeptical to bullish, despite the dramatic 2 year growth forecast of 98.3%. On 16 January 2013 BA Merrill-Lynch upgraded GBG to a BUY recommendation based on better iron ore prices and production growth. UBS maintained a BUY rating and target price of $0.38 in the belief the Karara expansion is proceeding according to plan. JP Morgan is the major skeptic with an UNDERWEIGHT recommendation and a “wait and see attitude” regarding the successful ramp up at the Karara project.

Despite the strong balance sheet with zero debt and $40 million total cash, the share price of Gindalbie has continued its slide from 2012 into 2013. Here is the company’s one month chart:

Investors may be focusing on Gindalbie’s single commodity focus and dependence on increasing Chinese demand for steel.

Specialmentary -Federal Reserve(US) - Rumor on stimulus pace slowing

Possibility for Federal Reserve to slow stimulus pace

Undoubtedly, one of the reasons causing recent weeks of equity market correction should be worries that the Federal Reserve may slow stimulus pace in coming months. It is true that economic activities in Europe, the US and Asia had sign of improvement since September, 2012 after monetary policies such as low interest rates and QEs (i.e. by Bank of Japan, Bank of England and Federal Reserve).

It is also true that the central banks may slow the monetary stimulus paces to relieve potential risks such as inflation rebound. From basic economics and monetary policy theories, increase in money supply (due to QEs and low interest rates) is likely to cause higher inflation in the mid-to-long term.

Interest rate rebound unlikely in 2013

However, it is unlikely for the Federal Reserve to raise interest rate in the year of 2013 (from a close-to-zero Federal fund rate level). The Federal Reserve has indicated in recent months that the central banks are likely to maintain low interest environment. Besides, economic activities during 4Q12 for Europe and the US were steady but not particularly good.

For example, the 4Q12 GDP in the US indeed contracted 0.10% QOQ while Eurozone suffered from a QOQ contraction of 0.60%. In other words, the central banks in the developed countries are likely to maintain loose monetary policies in the year of 2013. Nevertheless, the equity markets could be somewhat volatile in 2Q13 given reasons such as 1) profit taking from investors and 2) change of market sentiment due to concerns on possible stimulus pace slowing.

Table 2: 4Q12 GDP for major developed countries

Countries	Interest rate #	QOQ change	YOY change
US	0.25%	-0.10%	+1.50%
Eurozone	0.75%	-0.60%	-0.90%
UK	0.50%	-0.30%	+0.00%
Japan	0.00%	-0.10%	+0.30%

# risk-free rate from central banks

China Windpower (0182.HK) - HKD$0.33 - Strong buy

We're extremely bullish in China Windpower for next 3-5 years. This alternative energy is one of great solution for China Government to resolve the polution issue.

Strong BUY

International Land Banking Investment - SCAM?

Invest in what you understand, how it works to generate profit for you...

Today, many investors are asking : Is Land Banking Investment a SCAM?


My answer : I do not know... But, If the investment is so profitable, why they need to invite small investor to get involved in this investment.


Is the developer doing the same as land banking investment? If yes, what's the different between buying developer share vs land banking investment?

For me, developer should do better than land banking investment because we do not understand how land banking investment works, and how to audit it. Just be careful.

Just do a quick search in google. Land banking SCAM?

You will get better answer....


For me, i always say NO TO LAND BANKING INVESTMENT.

Warren Buffet acquired HJ Heinz

HJ Heinz (HNZ +19.87% to $72.5): a consortium comprised of Berkshire Hathaway and 3G Capital has agreed to buy the Co for $72.50 per share in cash.

HK : Hengdeli (3389): Update on market rumors

According to an article by the HK Next Magazine, Hengdeli, a luxurious timepiece retailer in HK and the PRC, had lost its distribution license to sell some brands. The article speculated that Hengdeli lost its exclusive distribution licenses for certain brands, including  Rado, Longines , Omega, and Fendi in China.

According to Hengdeli Management :
it has maintained good partnerships with numerous worldwide renowned watch suppliers, achieving a win-win situation. As at yesterday, there was no notable change in the operation policy of the firm and operations were at a normal and stable manner.

Who's shareholder?
The Swatch Group, which owns the Omega, Longines and Rado brands, holds a 20.4% stake of Hengdeli. The major shareholder Mr. Zhang Yuping, holds a 36.0% interest.



Valuation?
We expected that Hengdeli 2012 core net profit to be RMB740M, down 2% YOY, or EPS of HK$0.21 per share. At HK$2.60 per share, the shares are trading at estimated 2012 P/E of 12.3x. While Hengdeli has long-term growth potential, as the base figures of HK’s luxurious retail figures are still high, the slowdown risk could cap its valuation.

Risk?
At the moment, it is not yet confirmed if Hengdeli would lose some of its distribution rights.


Buy/Sell/Hold?
Buy HKD2.50-HKD3.00