2008 Olympics Making Profits -- New Article in Money and Markets Examines the Olympics
Tony Sagami takes a closer look at Chinese companies and industries that could be making big profits during the 2008 Olympics. In this issue of Money and Markets, Mr. Sagami examines how different industries and companies are going to benefit from the Olympics being held in Beijing.
Jupiter, Fla. (PRWEB) March 13, 2008
Tony Sagami takes a closer look at Chinese companies and industries that could be making big profits during the 2008 Olympics. Mr. Sagami examines how different industries and companies are going to benefit from the Olympics being held in Beijing.
The Olympics have long been a boon to stock markets of host countries. The Spanish stock market climbed 19% in the 12 months prior to the 1992 Barcelona Olympics, while the Greek stock market jumped by 27% in the year before the 2004 Athens Olympics. And those countries were not growing at a fraction of the breakneck pace that China is. So it wouldn't come as a surprise to see the Chinese stock market double or even triple those numbers. Some ideas to consider:
Cell phones are becoming an integral part of Chinese lifestyle. And the cell phone is not just the primary voice communication medium in China; it is also the common way most Chinese access the Internet and email. In China, the cell phone is the personal computer. Most new high rise condominiums and apartment complexes being built in China aren't even wired for land lines.
And don't forget that although China is booming, most Chinese still can't afford TVs, personal computers, or cars. Because of that, the only way for companies to reach those consumers is through billboards and video monitors strategically placed in heavily traveled areas like elevators, train stations, and bus stops. Focus Media is the dominant advertising firm in China. So every company that wants to reach people attending or watching the Beijing Olympics will be spending millions on Focus Media ads.
While most affluent foreigners will stay in fancy western hotel chains like the Ritz Carlton, the more budget conscious travelers will be checking into one of these spotlessly clean, bargain-priced rooms at the fastest-growing hotel chain in China. At less than $40 a night, Home Inns was running at a 90%-plus occupancy rate, but they are already sold out for the Olympics at triple the price. What's more, the company's tremendous value proposition will make it a big, big winner for many years after the Olympics.
CTrip is China's largest travel agency and odds are good that it will be handling the hotel and airline reservations for many Chinese travelers. In fact, business is already skyrocketing and the Olympics are six months away. CTrip recently reported its quarterly results and they were spectacular: A 52% increase in revenues and a 58% increase in profits. That's an amazing growth rate and yet CTrip only sells for 33 times earnings. Plus, American investors still don't get the idea that Ctrip has a unique and proprietary payment system in a country where credit cards are close to nonexistent.
Also take a look at Yum brand restaurants. A lot of hungry travelers are going to be walking around Beijing because they can't read Chinese and aren't willing to eat what is being offered to them. Foreigners will probably be relieved whenever they see the unmistakable logo of the 2,000 KFCs and Pizza Huts peppered around China. Many KFCs and Pizza Huts already have lines snaking around the block, but there's a good possibility those stores will be packed morning, noon, and night during the Olympics. Yum Brands will be making some very big profits during the Summer Games.
Beijing is going to be flooded with foreign visitors and very few of them will speak Mandarin. That's why any Chinese worker with even basic English skills is going to be in very high demand and very well paid. That opportunity isn't lost on the Chinese and they are signing up in droves for basic English classes at New Oriental Education. And while the payoff at the Olympics may be immediate, the long-term payoff for acquiring English skills is to the moon. That means plenty of future business for EDU.
"Right now, the weakness in the U. S. markets has been spilling over to the rest of the world. In fact, the Chinese market, as measured by the iShares FTSE/Xinhua China 25 Index, has fallen by more than 30% from October 2007 highs. Regardless, the Chinese economy may be the most powerful economic phenomenon in recorded history. And when you throw fuel on the fire by adding in the 2008 Olympic Games in Beijing, the country's stock market explodes with potential," Mr. Sagami states.
To read this issue online, please visit:
Http://www. moneyandmarkets. com/issues. aspx? Six-Chinese-Stocks-Benefiting-from-Beijing-Olympics-1523 (http://www. moneyandmarkets. com/issues. aspx? Six-Chinese-Stocks-Benefiting-from-Beijing-Olympics-1523)
About TONY SAGAMI & MONEY AND MARKETS
Tony Sagami, a veteran investment advisor and a leading expert on Asian markets, is the owner and founder of Harvest Advisors, an investment research and money management company. Mr. Sagami has been managing money for more than 20 years and is one of the early pioneers in the application of technical and quantitative analysis to mutual funds and stocks. He is a featured contributor to Weiss Research's daily e-letter, Money and Markets and monthly Safe Money Report as well as the editor of Asia Stock Alert.
Prior to establishing his own firm, Mr. Sagami was managing director at W. E. Donoghue & Co, serving additionally as the director of investment. During his successful career, he also held the position of account executive at Merrill Lynch.
Mr. Sagami's views on Asian markets, specifically Chinese investments, have been featured in publications such as The Wall Street Journal, Barron's, Kiplinger's, Smart Money, Business Week, New York Times, Washington Post, Investors Business Daily, Bloomberg, Financial Planning Times, Mutual FundsMagazine, Chicago Tribune, and the LA Times, as well as on CNBC and CNBC Asia.
Mr. Sagami holds a degree in economics from the University of Washington.
Money and Markets (www. moneyandmarkets. com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit www. moneyandmarkets. com.
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