Abaci's Common Sense Investing

After reading the paper and looking at the announcement again, I found I'd got it wrong at the 1st place. China COSCO is indeed buying the whole fleet (not part of it). And that made the consideration even more absurdly low, $34.6b for a fleet which earned $6b last year and $6b in 1st half of this year (likely earning over $10b for the whole year! I can't really find any rationale for a price this low except the average age of the fleet may be considered high and so one had to account for replacement cost in determining the overall consideration. Still, the price was dirt cheap and reminded me of the Angang asset injection last year, from which Angang also benefited immensely, and so did the H-share holders.

I reworked the figures and found the bulk fleet is trading at about 11x p/e, or 13x p/e if I apply a more realistic p/e to the container fleet. So the current price is mostly fair, maybe ahead a little bit since contribution from the bulk fleet probably won't come until next year when the deal is completed.

I think I can forgive myself for letting go the share too soon, for this kind of deal is really unpredictable. To compensate I can only thinking of buying more H-share index or fund, as for sure there'll be more injections for all state owned enterprises down the road but one can't be sure which one will come first.

p.s. to share my friend's blog which is quite enlightening: http://hk.myblog.yahoo.com/ohpalkof/