Shenzhen-based Kunda Technology has announced an IPO on Singapore 's stock exchange. The IPO share price is 21.5 cents. The new shares will represent about 21 percent of Kunda Technology's enlarged share capital of 320 million shares, according to The Business Times in Singapore.

China Kunda Technology makes precision moulds and plastic injection parts. The company had postponed an earlier IPO. It hopes to using the funds raise to about US$8 million to pay for business acquisitions, investment in new plant and production facilities, and for research & development.

Singapore IPOs gave some financial details on the company. According to them, unaudited 9 months sales for 2008 are HK$76.55m and profit after tax is HK$39.448m. That puts projected full year profit at about HK$102m and net projected profit for the year around HK$52.6m. An IPO price of 21.5 cents means the EPS is valued at 7x PE.

Singapore IPOs also had this to say about the offering:

Frankly, under such economic climate, i cant foresee the company to do better in 2009 than in 2008, perhaps that is one reason why it has to list NOW instead of postponing the IPO.

Trading starts October 9th.


Photo courtesy of iStockphoto, Peter Seager

Hats off to Richard Brubaker over at his blog, All Roads Lead to China, for pointing out this Financial Times article. If you enjoy understanding the big picture, the piece is insightful...

The author of the Financial Times article, David Piling, says that in a conversation about America's economic woes he asked a Chinese official recently if America hung itself "with Asian rope?" The Chinese official's response: "No. It drowned itself in Asian liquidity."

What do you call someone who makes $40,000 a year and spends $55,000 a year? Answer: an American. What do you call someone who makes $25,000 a year and still manages to save $8,500 each year? Answer: Chinese.

We may not be able to trust China's economic data. We may not be sure what we're getting when we buy Chinese stuff. But we do know this much for sure: China has money. Hard cash. It's just laying around, waiting to be invested in something. And (just like the Japanese) they've been loaning it to us under the Bush Administration. Brubaker's quote of the FT article sums it up well:

In one sense, this is a story of Asian prudence versus US recklessness. By accumulating vast savings - China and Japan alone boast 40 per cent of global central bank reserves - Asians have lived below their means so that Americans could live beyond theirs. Asia bankrolled US budget and trade deficits and provided the cash for banks and individuals to go on a spending spree and for Washington to fight wars in Afghanistan and Iraq.

Of course the problem is obvious (at least to Target and Wal-mart). If that guy making $40,000 a year in, say, Atlanta or Phoenix stops spending an extra $15,000 each year, sales go down at retailers. Then people get laid off and we start calling it a recession. But everybody knows we can't keep spending more than we make forever.

Bottom line: we're addicted to money. The Chinese and Japanese have been supplying us with it. We can't keep it up forever. But if we decide to wean ourselves off of it, withdrawal will probably be a bitch...


Photo courtesy of iStockphoto, David Joyner

Money Morning's Jason Simpkins had a heartening article late last month - heartening, at least, if you're still investing in China...

The article is a detailed look at the condition of China's economy: exports, retail sales, industry, stock markets, etc. Among his sources, Simpkins quotes Jing Ulrich, JPMorgan Chase & Co.'s chairwoman of China equities:

"Our outlook for consumption growth remains broadly positive. As China's government attempts to move from export-dependent growth, we expect that additional resources will be pledged to support domestic consumption."

Simpkins draws the conclusion that China is still the best long term investment available in the world of emerging markets.


Photo courtesy of iStockphoto, Alex Slobodkin

Temasek Holdings, Singapore's Sovereign Wealth Fund, has coughed up $100 million for the Chinese game company 9You.

We reported on this deal back in March, but now the money has actually changed hands according to one blog, The Future of Artificial Intelligence

I thought they had an nicely comprehensive description of 9You:

The 9You (www.9you.com) service is the first to integrate online game services (MMORPG, massive and medium size casual games, mobile game, etc.), fashionable digital entertainment contents, a variety of chatting and community services equipped with Avatar System, wireless value-added services and other premiere services to the Chinese language internet users all over the world.

9You looked set to launch an IPO in Osaka last year. A lawsuit over licensing fees for the online dance game Audition forced 9You to cancel its Osaka IPO in August. Korean game designer T3 Entertainment filed the suit.

An IPO is probably a ways off for 9You now in the current economic environment, but Temasek Holdings can probably afford to wait a while for an opportunity to cash its money back out of the company...

A Reuters report in the International Herald Tribune today says that private equity firms Bain Capital and Silver Lake have submitted formal offers for a stake in China's largest mobile phone equipment maker, Huawei Technologies.

The mobile handset division of Huawei Technologies has been the focus of speculation and buyout attempts for some time now. According to the IHT story, the unit was expected to be worth more than $3.5 billion when the auction started earlier this year.

Huawei hopes a US partner would expand its leverage in the US market.


Photo courtesy of iStockphoto, olaf loose

The Street was among several news sources that reported earlier this week on Warren Buffett's move into China. Buffett's MidAmerican Energy Holdings Co., has announced plans to invest about $230 million in BYD Co., a Chinese car and battery maker.

Buffett is looking at obtaining a 10% stake in the Hong Kong company. BYD is probably the world's largest maker of the nickel and lithium-ion batteries used in cell phones. Those sorts of lithium-ion batteries have become the battery of choice for many electric car makers.

MidAmerican is also interest in BYD's work in creating batteries to store solar and wind power.

BusinessWeek described the deal this way:

The deal represents Buffett's first strategic investment in China and shows he's betting on alternative energy in a major way. "I think the world has concluded we need to solve the CO2 problem," says MidAmerican Chairman David Sokol. "One area we must seriously affect is transport.

Buffett sees this particular investment as key to the success of the hybrid and electric car industry in America.


Photo courtesy of iStockphoto, Alexey Dudoladov