Beware the Hype in China's Story
By PETER STEIN
A raft of planned stock listings are betting on the future spending power of the Chinese consumer. The trends underlying this rush to market are real, but investors should avoid heedlessly buying all the hype.
The big picture is familiar: China's long-term growth trajectory is creating a vast middle and upper class eager to buy clothes, cars, cosmetics and cashmere scarves in ever-larger quantities. The story has gained allure amid China's moves to promote domestic consumption as a future growth engine.
So far, signs of a slowdown in China that are weighing on the country's broader markets haven't damped enthusiasm for the consumption story, which appeals in part because it offers a longer-term bet on spending patterns that should outlast any short-term market downturn.
Two big global brands, Prada and Samsonite, highlight the power of the China story as they prepare to list on the Hong Kong exchange. The Italian fashion house is raising around $2 billion in an initial public offering, pitching itself as a play on China's demand for luxury goods. Luggage maker Samsonite, the subject of several buyouts and messy restructurings in the past, is seeking $1.51 billion. Its growth prospects in Asia, and China especially, are the offering's top selling point.
Other China retail plays in the pipeline include Vancl.com, a Chinese online clothing retailer that aims to raise up to $1 billion in a New York listing, and Chow Tai Fook, a jewelry chain controlled by Hong Kong billionaire Cheng Yu Tong. Chow Tai Fook's credentials as a premier vendor of Chinese bling are emboldening it to seek $3 billion to $4 billion in a Hong Kong offering early next year.
Bankers and fund managers say at least 15 IPOs, and as many as 30, that play on China consumer demand are in the works. But a rush of similarly themed companies coming to market means sellers smell opportunity—and buyers should beware. That's particularly true for the many domestic Chinese retailers, including many online retailers, looking to go public and targeting the mass market.
"That's what we had with the Internet bubble—too many me-too adopters" that lacked strong business fundamentals, says Stephan Schäli, head of private equity at Partners Group, a global private-markets investment-management firm that happens to own a stake in Samsonite. He notes that China's retail space remains hugely fragmented and it's difficult to identify which companies are best positioned to survive when consolidation eventually thins the ranks.
There are other risks with domestic Chinese companies of the entrepreneurial variety that predominate in retailing, including occasional corporate-governance problems and accounting shenanigans—stuff that has drawn the attention of U.S. regulators in the wake of alleged fraud and mismanagement at more than a dozen U.S.-listed Chinese companies.
The more-established foreign brands listing in Hong Kong offer a certain level of comfort. Multinationals benefiting from China's growth have long been a safer way for global investors to gain at least some indirect China exposure. What's new is the idea that some are now choosing to go public in Hong Kong, closer to the region they believe will drive future profits.
Prada's growth prospects in China look solid. Goldman Sachs figures that already about 30% of its global sales go to Chinese buyers, many of them making their purchases overseas. It also forecasts that by 2025 Chinese luxury consumers will number 200 million, up from 15 million now.
One Prada perk: Luxury sales could do well even if China doesn't successfully shift more of the economy toward consumption. The plutocrat class will likely keep expanding regardless, unless China runs into bigger problems, such as a banking crisis.
However, high tariffs on luxury goods in China could crimp expansion plans on the mainland, and keeping up the brand's image of exclusivity will be harder once its goods become more ubiquitous.
Samsonite is pitched toward a lower rung of Chinese affluence, and therefore a bigger market.
As a whole, Asia already makes up about 40% of Samsonite's earnings before interest, taxes, depreciation and amortization, a common measure of the company's core business. But even though China is the company's No. 2 market, it is a surprisingly small portion of sales at less than 10%, and boosting that share requires getting consumers in a market flooded with cheap suitcases and rolling carry-on bags to shell out extra yuan for a brand name.
Investors would be right to harness the rising power of the Chinese consumer to boost their portfolio returns. They just need to look carefully where they fasten the harness.
Write to Peter Stein at email@example.com
从创业板发行端输入的“三高”症，到今年高成长神话破灭引发股价崩盘，到近期高管大批量恐慌套现，再到本周吉峰农机“行贿门”、沃森生物“流产门”， 市场有理由担心，始乱终弃的“危房”之下，创业板还埋有多少地雷？ 从创业板发行端输入的“三高”症，到今年高成长神话破灭引发股价崩盘，到近期高管大批量恐慌套现，再到本周吉峰农机“行贿门”、沃森生物“流产门”，市场 有理由担心，始乱终弃的“危房”之下，创业板还埋有多少地雷？
或许是，要孵化“中国的微软和苹果”的期待而预留的呵护和宽容，据称是十年磨一剑的中国创业板，自2009年10月“出世”，便以高市盈率、高发行 价、高融资额的“三高”症傲视江湖。高达80倍以上的平均发行市盈率，羞煞发行市盈率不足20倍的美国和中国香港创业板市场。高发行市盈率下的高发行价、 高融资额乐坏了上市公司、保荐商和承销商以及相关中介机构。“三高”症不只是扭曲了投资市 场的价值体系，不只是“突击入股”、寻租腐败、魅影潜行的温床，其灌注的“堰塞湖”的溃堤，更让二级市场的小散们损失惨重，而其36%的破发率也让一级市 场的中签人遭遇中签如中刀的“通杀”。症结何在？伪市场化的新股询价制使然。上市公司、保荐商和承销商左右发行价的话语权，而询价机构鲜有谈判议价能力。
所谓路遥知马力，创业板才跑路一年多，高成长神话破灭便引发了系统性股价崩盘。本报统计显示，2010年整个创业板净利同比增速只有30.9%，低于 中小板的31.7%和主板市场的39.2%。进入2011年一季报，业绩同样不容乐观，212家公司有48家业绩同比下降或亏损，占比高达23%，而其中 不少是刚上市的新股。业绩是股价的基石，基石摇晃，马儿自然颠倒。今年以来，沪指涨1.79%，中小板小跌9.77%，但创业板暴跌22.38%。对比之 下，足见创业板神话破灭后引爆的风险。
股价暴跌，小散苦闷。而创业板公司高管在暴跌途中的恐慌弃逃，更让人大跌眼镜。本报统计发现，今年1月和2月，创业板指数在1000点以上，高管减持 仅为237万股和252万股，减持金额分别为7697万元和5940万元。然而，随着3月下旬创业板开始暴跌，当月高管减持股份骤增至1974万股，套现 金额达6.09亿元，是前两个月总额的3.5倍。5月以来，创业板指数跌至900点以下，高管套现再度升温，仅5月3日到5月12日8个交易日，创业板高 管减持便高达2318万股，超过3月全月的水平。比较典型的是乐普医疗总经理蒲忠杰，其通过大宗交易一举减持1500万股，占本人持股的18.47%，金 额达3.73亿元。据统计，仅最近一个季度内高管净减持的创业板公司达49家。创业板公司目前虽有 200多家，但允许减持即上市满一年的不过79家；加上一个季度前减持的恐怕比例已超过7成。而最近一个季度内被净增持的公司不足10家，且最大增持量也 不过6万多股。
媒体报道，继去年中小板公司联信永益的董事长、总经理等人因行贿被刑拘后，创业板公司吉峰农机再爆行贿事件，两个相关责任人已被逮捕。“行贿门”击倒这只曾经的创业板牛股， 股民受灾严重。另一则消息是沃森生物的“流产门”。5月17日，沃森生物连发3则公告，宣告相关疫苗项目流产。而据此前的招股书显示，公司与国际知名疫苗 厂商已于上市前就展开了合作，但本次公告却将相关协议全部推翻。曾经发行价高达95元的创业板“疫苗新贵”，昨日收盘仅53.03 元。