Is the Chinese stock market going to continue its freefall?
And if so, why? Companies that report 40% annual growth and trade for less than 10x trailing earnings, and have confirmed guidance that put their forward PEG at less than 0.2, are being massacred in the streets, particularly Wall Street. Is this a time to buy when the streets are running red with the red ink of shareholder returns? Or is this an accurate reflection of the need to cut and run from the falling Chinese giant? Please post your well thought-out opinions, or ill thought-out harangues, below.
I own calls and am short puts of a certain Chinese company, SmartHeat, Inc. (HEAT) that is represented by the numbers given above. I am particularly concerned, because I don't know to what extent the bursting of China's housing bubble will impact SmartHeat's business of energy efficiency heat transfer plates, given that they may still be purchased for existing homes/businesses to decrease energy costs. Then again, after America's housing bubble burst, Home Depots and Loweses were ghost towns. I.e., hardly anybody was buying any upgrades or home repairs for their homes at all. Does anybody have any more specific knowledge of SmartHeat's business (not their numbers)? Please share below.
So, given my ignorance about SmartHeat, I'm still willing to take a few options fliers on its great numbers, but I kind of want to balance it (and bet a conviction of mine) by finding a few Chinese construction-related companies to short the heck out of. Does anybody know any great candidates for that purpose? Please post any ideas or finds below.
Thanks to everyone who participates in this China forum.
P.S. CDC Corporation (CHINA), from my related tickers, is neither a Chinese index fund, nor a construction-related company (as far as I can tell), but is chosen for its ticker symbol.