Seeking Alpha: China Resources Enterprise Languishing Over Short-Term Concerns

Another six months are in the books, and little has changed for the better at China Resources Enterprise (OTCPK:CRHKY). The Chinese food retail environment continues to be a tough one, with most of the major players seeing their comps turn negative. I believe CRE remains well-placed to benefit from growth in its beer JV and beverage business, and I continue to expect management to drive better long-term results from the Tesco (OTCPK:TSCDY) joint venture. In the meantime, though, it will be hard for these shares to get ahead while the Chinese food retailing market remains weak and while investors remain concerned over the near-term losses that CRE will absorb from the Tesco JV.

Follow this link to read the full article:
China Resources Enterprise Languishing Over Short-Term Concerns

Seeking Alpha: Amidst A Weak Chinese Consumer Market, CRE Faring Even Worse

Naming China Resource Enterprises (OTCPK:CRHKY) as a Top Pick in August of 2013 has been a lousy call so far. Down almost 20%, about the best thing I can say about that call is that most of the Chinese consumer sector has gotten hit too, with Sun Art (OTCPK:SURRY), Lianhua (OTCPK:LHUAF), and Tsingtao (OTCPK:TSGTY) down about 5% to 10% over the same period on a lot of worries (and some reality) about weaker consumer spending in China.

At the risk of doubling down on a bad call, I do believe that the market is playing up short-term risks and losing sight of what CRE can accomplish over the long term. Clearly "can accomplish" is not the same as "will accomplish", but I expect CRE to leverage leading share in Chinese food retailing and beer into a strong mix of revenue growth and higher margins down the road. I've lowered my expectations and fair value to account for the near-term softness and the earnings dilution from the Tesco JV, but I continue to believe these shares are an interesting long-term opportunity.

Read the full article here:
Amidst A Weak Chinese Consumer Market, CRE Faring Even Worse

Seeking Alpha: Very Little Seems Expected Of Lianhua Supermarket

How to value publicly-traded companies is a question where you will get multiple answers. I am generally a big fan of discounted cash flow models, while others prefer to look at EBITDA, book value, or PE ratios. I mention this because I think how you approach the valuation question will go a long way toward determining whether you see opportunity in China's Lianhua Supermarket (0980.HK) (OTC:LHUAY).

I don't think anybody will argue that Lianhua is a particularly outstanding retailer, particularly as the market reacted quite favorably to some recent changes in the company's management. I'm not sold on the franchise model for supermarkets over the long run, and the company is going to have to deal with quite a lot of competition in its core markets of Shanghai, Zhejiang, and Jiangsu. If you value Lianhua by its earnings per share, I can agree that there wouldn't seem to be much potential here, but if you look at the cash flow the picture changes quite significantly and Lianhua could yet be undervalued.

Continue reading here:
Very Little Seems Expected Of Lianhua Supermarket

Investopedia: Consumer Spending Looking Bleaker For Wal-Mart

It seems like hopes for a strong back-to-school season (not to mention a more general spending recovery overall) are fading away for Wal-Mart (NYSE: WMT). Weak consumer spending may not be a huge surprise this quarter, but I found it interesting that the company also lost some operating leverage. In any case, while Wal-Mart really isn't the sort of stock to buy or sell on the basis of one quarter, but I find the valuation and potential here to be pretty underwhelming on the whole.

Continue here:
http://www.investopedia.com/stock-analysis/081513/consumer-spending-looking-bleaker-walmart-wmt-tgt-aeo-amzn.aspx

Seeking Alpha: CRE Playing The Long Game In China, And Looks Significantly Undervalued

Investors know all too well how challenging it can be to generate long-term gains from Chinese equities. Leaving aside those companies that play fast and loose with accounting or pin their hopes on favored relationships with government officials, there are the rapidly-changing economic trends that may make long-term forecasting even more challenging.

All of that said, I think investors should give serious consideration to China Resources Enterprise (CRHKY.PK). While CRE carries the black mark against it of being a state-owned enterprise, the company has emerged as a leading retailer and brewer in this fast-growing economy, and is looking to invest more in its food processing and beverage businesses.

What's more, the company plays the long game - using JVs and foregoing quick near-term profits to build a larger, more profitable business down the road. All told, I believe a case can be made that CRE shares should appreciate 40% to 50% over the next 12 to 18 months as China recovers and investors return to names leveraged to Chinese consumer spending.

Please continue here:
CRE Playing The Long Game In China, And Looks Significantly Undervalued