China Investment Themes: The SSE
You know the geography of China and you know the history of China, so you're ready to know what you should start thinking about investing in. That's what this next series of posts aims to help you figure out.
As always, these posts are just a primer for the full coverage you'll get if you sign up to receive all of the notes we send back from our upcoming trip to China. To get those free notes, simply enter your email address on this page.
Our first theme is the SSE...
If you've never heard the term SSE, that's ok, we invented. It stands for state-sponsored entrepreneur and is a play on SOE, or state-owned enterprise, which are the dominant economic units in China today.
SSEs are a theme we hit on during last year's trip to China and include private companies like General Steel (GSI) that get beneficial financing from state-run banks and that are favored acquirers of small state-owned companies as the government seeks to make its economy more efficient.
But SSEs can also be the publicly-traded state-owned companies such as China Blue Chemical, that benefit from the same trends.
The key is that these are smaller companies that are very entrepreneurially run, but do glean some benefit from good relationships with the government that give them a temporary competitive advantage in China's fast-growing economy. Look out for SSEs in any China research that you do; we think they're a key long-term play.
We have a few potential SSEs on our meeting dance card for the upcoming trip. Remember, if you're interested in getting those notes from the field, simply click here and enter your email address on the page.