With the 2008 Olympics in Beijing, China approaching, you can load up your stock portfolio with a few Chinese holdings in anticipation of the increased tourism, traffic, and revenue throughout the summer of 2008.
Even when the 2008 Beijing Olympics conclude, China will reap the social and monetary benefits that hosting the Summer Olympics provides for years to come.
How to Invest in 2008 Olympics in Beijing: Part 1
I will stretch these post into a series so you can avoid information overload. Parts 2 & 3 will be featured on June 29th and July 2nd.
Before I list these Chinese securities, let’s establish one important factor about these securities: you must sell once the 2008 Beijing Olympics end.
Why so?
The stock catalyst (2008 Beijing Summer Olympics) will have disappeared, giving you little incentive to hold the Chinese stocks any longer. Chinese companies will post huge quarterly revenue numbers during the 2008 Olympics, forming the top of the market pyramid. Remember, we bought these stocks because of the Olympic buzz, so we must sell them once the Olympics are over.
Unless you have an ulterior motive to continue investing, dump the Chinese stocks then move on with your life.
HMIN: Home Inns & Hotels Management Inc.
Home Inns has been on my watch list ever since January (Read my HMIN January Stock Analysis) because I was impressed with the Chinese Hotel chain’s fast growth and revenue numbers.
HMIN missed their March Q1 earnings numbers by 6 cents, but Home Inns remains optimistic about hotel chain expansion in the future. Management opened 11 new hotel units in Q1 2007, and commenced development of 48 more hotel units, bringing the hotel fleet total to 145.
Hotel revenues increased 65.6% YOY to $23.7 million in Q1 March 2007 as well. Tack on 48 more hotel units to this number, and HMIN revenues will continue to grow nicely.
Why Pick a Chinese Hotel Chain?
In Summer 2008, tourists, both in-country and foreign, will need a place to stay. That’s where Home Inns & Hotels Management comes into play, especially since many Chinese tourists prefer lodging that adheres to their cultural tastes & beliefs. HMIN’s corporate slogan is “Wherever you go, you’re always at home.” Considering fellow Chinese make up the largest segment of tourists in China, I like the sound of the slogan.
HMIN: 157 P/E Looks Expensive, wait for a correction then buy
Careful, though. You must pay a hefty premium to invest in HMIN. HMIN P/E ratio is an obscene 157 times earnings. Right now at 30, HMIN looks expensive, but if Home Inns ADRs fall below $25, I would like to buy.
This concludes Part 1. Please stay tuned for Parts 2 & 3 in the next couple of days.
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I stayed at Home Inns since summer 2004, and I think they are good (Chinese standard).
But I think the stock is fully valued now, not just by looking at its PE. The biggest problem I saw is the competition in the industry (budget hotels): price wars, etc. On the other hand, cost (espeically real estate) continues to go up…
@ STLPlace
HMIN was very active today; Home Inn ADRs gained 5%, but I think they will fall lower throughout July and August.
195 P/E is ridiculous, plus the PEG ratio is 2.64. That’s way too much to spend on volatile Chinese stock, especially when we haven’t faced a stock market correction yet.
Are you long HMIN?
Need details about souvenirs or momentos being
manufactured for sale during the Beijing 2008 olympics
this article really has no substance.