Many Hong Kong stocks of profitable, dividend-paying businesses are trading below their net-cash balance. Valuations become really absurd, when we also include other financial assets. All the reason to start a series dedicated to finding the most attractive Hong Kong stocks. This is the kickoff.
Great points. Fraud is a big issue we really need to watch out for, especially with companies based in Mainland China but listed in Hong Kong. Right now, there's no way to go after fraud from Hong Kong to China, so a lot of it goes unpunished. But, it's a different story inside Mainland China. There are way more cases of fraud with H-shares compared to A-shares. Yet, if you're careful and do your homework, there's a big chance for success since many people are too worried to take the risk.
You could also look for companies with a double listing in Hong Kong and mainland China. Typically, you will pay a premium in mainland China. However, this does not mean that the gap will narrow or close. The share price may also simply fall in China. Here is a list of stocks with the largest valuation gaps (stock is listed in HK and China): http://www.aastocks.com/en/stocks/market/ah.aspx?sort=5&order=1&filter=3
Great points. Fraud is a big issue we really need to watch out for, especially with companies based in Mainland China but listed in Hong Kong. Right now, there's no way to go after fraud from Hong Kong to China, so a lot of it goes unpunished. But, it's a different story inside Mainland China. There are way more cases of fraud with H-shares compared to A-shares. Yet, if you're careful and do your homework, there's a big chance for success since many people are too worried to take the risk.
You could also look for companies with a double listing in Hong Kong and mainland China. Typically, you will pay a premium in mainland China. However, this does not mean that the gap will narrow or close. The share price may also simply fall in China. Here is a list of stocks with the largest valuation gaps (stock is listed in HK and China): http://www.aastocks.com/en/stocks/market/ah.aspx?sort=5&order=1&filter=3