Category: personal_noteS

Cheap not enough, change in management style is key

Reading Buffet’s early investments in Union Street Railway in the 1950s.

Company’s business is not going well, and its stock is cheap – $30–$35 per share despite roughly $60 per share in cash and bonds.

Simply by distributing dividends, the company can give $50 per share to shareholders.

While the company being cheap is important, the management’s willingness to give shareholder return is even more crucial.

A distant $50 is different from a near-term $50; not to mention other ways to destroy equity value.

Oh btw, Union Street Railway also needed local regulator’s approval to distribute it seems – so ultimately it’s also up to the change of thoughts from regulators.

Bizarre Numbers (2)

Detective Conan IP generated less than 1500mn rmb revenue in a year, with film being the largest contribution (~50%).

PopMart’s Labubu generated over 3000mn rmb revenue last year, while most people don’t know Labubu’s stories, its origin, its value, etc.

Bizarre Numbers

UPS and FedEx reported revenue per piece/package is ~$13-$14 (1q25).

SF Express, the most premium express in China, reported ASP of 15.5 rmb in 2024 and ASP of 14.6 rmb in 1q25.

Other express delivery companies in China reported ASP of 2.3 rmb (YTO) and 2.05 rmb (STO and Yunda) in 2024.

Meanwhile, ZTO+YTO+STO+Yuanda+SF -> 330k package per day!

FedEx +UPS is ~40k package per day.

 

Is US trade deficit with China that big?

I don’t think so.

In 2024, US trade deficit with China is slightly lower than $300bn.

To compare, in 2011, US trade deficit with China is at the same level.

Back in 2011, US GDP is $15.6 trillion and that grows to $29 trillion in 2024.

We know the math – the trade deficit with China as % of US GDP is almost halved from 2011 to 2024.

Source: US-China trade deficits over the years.

Lovely and random encounters

I was going to order coffee downstairs.

Met a couple, Cindy and Fab, when they were trying to order. They are in their 60s and on their 4-month vacation. They used to work in Indiana and now live in Florida.

I just realized how lovely these random conversations can be. I feel I used to have a lot of these (I might have exaggerated here) back in the states, but rarely so in China.

Maybe it’s about me.

Maybe I feel the expected outcome from random conversations is less interesting here in China, so I wasn’t intrigued to welcome one.

Maybe my attitude to life has changed a bit – I became less exploratory and want more certainty. This could be due to the distaste of negative randomness in stock market – I was exposed to a lot of it in work and in personal investing.

However, those are temporary, if anything. I felt the impulse again and that’s nothing different from what I could feel years back.

Existing home price index near flattish in Feb 2025 across tier-1 cities

In Feb 2025, the price index of existing home across BJ/SH/SZ averaged is only -1.4% yoy, about flattish.

As of Mar 2025 data, price index of existing home across BJ/SH/SZ averaged has improved for 6 consecutive month (Oct 2024 – Mar 2025), by about 0.44% every month.

The five month from Oct to Feb month has helped the yoy comparison improve 8.6% (from -10% to -1.4%).

 

Vanke no more monthly report?

It was a tradition for Vanke to disclose its official monthly sales report, which includes information such as sqm (pre) sold, $ amount (pre) sold, and new projects added.

Here is the last one for Dec 2024 monthly report from Vanke; haven’t found 2025 monthly reports for Jan, Feb and Mar 2025.

Here is a monthly chart for monthly contracted sales in rmb 100mn, from Jul 2022 to Dec 2024.

Railroads change cities’ fate

Read some interesting discussion on railroad build-outs in early 20th century in China, and its impact on cities.

Before railroads expanded, China’s economy relied a lot of waterways / canals.

Railroads changed the trajectory of cities. Traditional waterborne centers were sidelined and small towns can quickly become new centers, for example,

津浦铁路: Linqing fell; Dezhou rose

京汉铁路: Kaifeng fell; Zhengzhou rose

Additionally, if two railways are built with different standard, they shall create a city, for example,

Shijiazhuang: Zhengtai Railway (metre gauge) intersecting Jinghan line (standard gauge)

Changchun: Chinese Eastern Railway (broad gauge) intersecting South Manchuria Railway (standard gauge).

Are things really bad?

S&P 500 has declined 10% YTD. It dropped as much as 15% till Apr 8, before a tariff pause was announced.

Things have since recovered a bit.

E.g. after Walmart missed guidance on Feb 20, its stock has only dropped 4.1% (Feb 20 to Apr 17). To be fair, the one day drop on earnings is bigger – 6.5%!

Walmart guided 3-4% annual revenue growth, 3.5% to 5.5% adj. operating income growth, flat to 3.6% adj. EPS growth. Considering the 50bps of FX headwind, organic adj. EPS growth is guided at 3.6% at mid-point.

On Apr 9, Walmart pulled Q1 profit guidance, but maintained full year guidance.