24 June 2018

Hao Chenglin

Columnist at the Hong Kong Economic Journal
  • In Berkshire Hathaway’s 2005 letter to shareholders, Warren Buffett introduced the Gotrocks family to illustrate how transaction costs and fees can seriously erode long-term returns. Photo: Reuters

    What Buffett’s Gotrocks story tells investors

    - Feb 1, 2017 3:42pm
    Investors are always looking for better returns but most forget that cost is also a crucial factor. In Berkshire Hathaway’s 2005 letter to shareholders, Warren Buffett introduced the Gotrocks family example to illustrate this point. The...
  • Japan’s Softbank is among a number of foreign companies that have pledged to invest heavily in the US. Photo: Reuters

    Why are companies rushing to invest in the US?

    - Jan 25, 2017 5:18pm
    Japan’s Softbank Group and Taiwan’s Hon Hai Group, known as Foxconn, are planning hefty investments in the US. Also, China’s Fuyao Glass has built a factory in Ohio recently. Why are these companies flocking to the...
  • Had investors sold properties based on Beijing’s pledge to rein in real estate prices a couple of years ago, they would have missed one of the biggest rallies. Photo: Reuters

    Why it’s tough to make policy-driven investment bets

    - Jan 12, 2017 10:58am
    In the old days, it was often said that the key to career success for officials is knowing what’s on the king’s mind. Investors have been applying that thinking to investing in Chinese firms. It did...
  • The structural growth trajectory of China's natural gas industry remains intact. Photo: Xinhua

    Secular vs cyclical growth: How to tell them apart

    - Apr 1, 2016 5:07pm
    A number of coal-fired power companies have posted 30-40 percent profit growth, mainly due to falling coal prices. By contrast, gas-powered operators have reported about 10 percent earnings expansion. Also, coal-fired plants have a price-earnings (PE)...
  • If Hong Kong and mainland stock markets are providing disappointing returns, should investors have to look at international markets? Photo: Xinhua

    Is value investing out of date?

    - Mar 23, 2016 5:37pm
    Columnist Alex Wong said in an article on Tuesday that many fund managers are now holding high cash positions while looking for speculation opportunities to ensure positive returns. “The rule of value investing has been put...
  • Stock-based compensation at Twitter accounted for 247 percent of its profit last year under the non-GAAP reporting standard. Photo: Bloomberg

    Excessive stock-based compensation leads to disaster

    - Mar 19, 2016 8:03am
    Is stock-based compensation (SBC) a real cost for a company? Many investors don’t think so because they believe as long as the company doesn’t pay any cash, there’s no cost. That’s not true. The cost is...
  • Investors should beware of risks that can come with cheap valuation. Photo: Bloomberg

    Buying cheap can sometimes prove expensive

    - Feb 24, 2016 5:08pm
    Real Nutriceutical Group (RNG, 02010.HK) recently announced the change of auditor. From a corporate governance perspective, there are two things investors should be cautious about: frequent resignations of non-executive directors and a sudden exit of the...
  • Wanda group is stepping up focus on entertainment and tourism-related businesses while cutting back on property development. Photo: Bloomberg

    What does Wanda’s restructuring plan tell us?

    - Feb 20, 2016 8:03am
    Dalian Wanda Group, the parent company of Dalian Wanda Commercial Properties (03699.HK), has pegged its revenue target for this year at 254.3 billion yuan, down 12 percent from the year before. Of the total, the property...
  • The Hang Seng Index plunged on the first day of trading after the Lunar New Year holiday. Photo: HKEJ

    Stock market falls amid deflation risk

    - Feb 15, 2016 1:01pm
    Is deflation rearing its ugly head again in Hong Kong?  Falling real estate and stock markets will put pressure on asset prices, but household income is another factor to watch. The financial industry is having a hard...
  • In 2009, then Federal Reserve chairman Ben Bernanke launched a zero interest rate policy. Photo: Bloomberg

    Low valuation may also be expensive

    - Feb 3, 2016 5:16pm
    Typically, there are three indicators of economic recovery: high economic growth rate, high inflation and high interest rate. High interest rate is not bad if it reflects fast economic growth. But when the interest rate is...
  • Hong Kong will find itself in a difficult situation when the divergence of the US and Chinese economies expands. Photo: HKEJ

    Hong Kong torn between two divergent economies

    - Jan 29, 2016 5:07pm
    Hong Kong investors should worry more about the local economy than the situation in mainland China. The city’s monetary policy follows that of the United States, but its economic fundamentals are grounded in the mainland. When...
  • Almost 80 percent of new users of high-speed mobile networks in the past two years have chosen China Mobile. Photo: Bloomberg

    Bright future for China telecom sector

    - Jan 23, 2016 8:05am
    The Hong Kong and China stock markets have been falling recently. Is the real economy that bad? Mainland telecom operators, at least, paint a much brighter future. By the end of November last year, there were nearly...
  • The Hong Kong dollar has fallen to 7.83 from 7.75 against the greenback, marking the end of one-way inflows. That followed a rally which saw the local unit gain 25 percent in the past 18 months. Photo: Bloomberg

    Why speculators are targeting the Hong Kong dollar, not the yuan

    - Jan 22, 2016 6:02pm
    The signs are there — an A-share market meltdown, a sharp renminbi devaluation, turmoil in the Hong Kong stock market and a falling Hong Kong dollar.  So, are we seeing a replay of the 1997-1998 Asian...
  • A demonstration of a vehicle on auto-pilot at the Consumer Electronics Show. Photo: CNSA

    A third Industrial Revolution is on its way

    - Jan 15, 2016 4:31pm
    I attended the annual Consumer Electronics Show in Las Vegas days ago. The CES is a showcase of the world’s technology development. This year, I didn’t see as many revolutionary products as it had in previous years,...
  • A weaker renminbi will help enhance the competitiveness of China's exporters. Photo: Xinhua

    Why the China worries may be overblown

    - Jan 13, 2016 4:37pm
    A sudden slide in the renminbi exchange rate has unnerved investors and prompted a sell-off on the equity markets this year. In Hong Kong, the benchmark Hang Seng Index has tumbled nearly 10 percent so far...
  • When we think of Taobao, we think of playing some game and when people say they will “give you a ‘like’,” they're basically saying they're addicted to social networking sites. Photo: HKEJ

    Tech stocks have a tipping point — where is it?

    - Dec 31, 2015 7:32am
    There’s a big possibility that the US stock market will outperform those in Hong Kong and mainland China. The technology-heavy NASDAQ index is likely to report better performance than the Dow and S&P 500 indices. This...
  • Destocking in the property market could lead to a new wave of property development frenzy in top-tier and second-tier cities, according to a senior Beijing academic. Photo: CNSA

    How destocking in China’s property market will affect stocks

    - Dec 23, 2015 3:58pm
    China has set five targets for 2016 — resolving industrial oversupply, destocking (in the property market), deleveraging (to avoid financial risk), reducing capital cost and expanding effective supply. The oversupply issue has been kicking around for...
  • Airbnb and Uber show that a bright future awaits the right internet-based companies. Photos: Bloomberg, Reuters

    Why quality internet stocks are worth investing in

    - Dec 16, 2015 3:41pm
    Christmas holidays are on their way. It’s a good time to travel, with a strong Hong Kong dollar. However, accommodation in popular tourist destinations will be extremely costly during the peak season. Why not give home-sharing...
  • The fight for control of Vanke may push up its share price. For long-term investors, the stock remains attractive. Photo: Reuters

    What to make of China’s wild and woolly stock market

    - Dec 12, 2015 8:05am
    China’s foreign exchange reserves slumped nearly US$90 billion in November alone. Also, the Hang Seng Index has tumbled to 21,800. Meanwhile, Bank of Jinzhou (00416.HK) is seeking to raise funds and a US insurance company has...
  • Investors should avoid relying too much on mathematical formulas to guide their investing. Photo: Bloomberg

    Why investors should learn to think for themselves

    - Dec 7, 2015 11:32am
    The price-earnings ratio is a widely used metric for valuing stocks. At the moment, the stocks in the Hang Seng Index have an average P/E ratio of 9.7 times, compared with an average 12.8 times over...

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