Seeking Alpha: GOME Still Looking To Adapt To China's Evolving Retail Market

It's been a tough year for GOME Electrical Appliances (OTCPK:GMELY) (0493.HK). Although I thought the shares were fully valued when I last reviewed this large Chinese electronics retailer, I didn't think a nearly 50% plunge in the Hong Kong shares was in store. Even allowing for the generally dismal performance of the Hang Sang and the H-Shares Index (down about 27% and 40%, respectively), GOME has been an underperformer, and that's even more apparent given that rival Suning (002024.SZ) has fallen only about 10% over the same period.

Weakness in China has definitely shown up in GOME's results, as same-store sales grew just 2.3% in fiscal 2015 - not only missing the company's earlier target of 3%, but continuing the slowdown from 5% growth in 2014 and high single-digit growth in years prior. While some of this is due to the economic challenges in China today, some of it is also due to the saturation of the major Chinese cities where GOME operates and the ongoing penetration of online commerce.

GOME continues to build out its own online efforts, but an alliance between Alibaba (NYSE:BABA) and Suning is a threat that shouldn't be ignored, and there are no guarantees that the company's efforts to bulk up its logistics offerings will help as much as advertised. Acquiring the unlisted parent company stores should help, though, as it significantly increases the company's presence in faster-growing Tier 2 cities and creates more logistical and operating synergy opportunities.

Although GOME shares look as though they could be meaningfully undervalued, that is true of a lot of Chinese equities today and there are clearly no guarantees that the macroeconomic environment in China cooperates. I'd also note that GOME's U.S. ADRs trade only very infrequently and investors are far better off trying to buy the Hong Kong-listed shares (something most larger brokers can and will facilitate at a reasonable price).

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GOME Still Looking To Adapt To China's Evolving Retail Market

Seeking Alpha: China Dongxiang - A Sportswear Company That Doesn't Want To Make Sportswear

When you look overseas you often find some unusual, if not outright strange, stories. China Dongxiang Group (OTC:CDGXY) (3818.HK) may just take the cake, as this sportswear company apparently isn't very interested in being in the sportswear business.

Although China Dongxiang owns a relatively popular sportswear brand in China (Kappa), management no longer seems committed to building the brand. Instead, management likes to take the company's cash and invest in other companies and investment funds, most having little or nothing to do with sportswear. Apart from a small stake in Alibaba, management has shown no particular skill with these investments and it seems unlikely that they are going to pay out the surplus cash as a dividend or reinvest it into the business.

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China Dongxiang - A Sportswear Company That Doesn't Want To Make Sportswear

Investopedia: Yahoo! Still Needs To Generate Better Intrinsic Value

A year into her tenure as Yahoo!'s (Nasdaq:YHOO) CEO, Marissa Mayer may have ruffled a few feathers, but Yahoo!'s feathers were badly in need of ruffling as it was well on the AOL (NYSE:AOL)/MySpace path to irrelevance and doom. While there's still quite a lot of work to be done in turning the business around, the better-than-70% rise in the shares over the past year has to be encouraging to shareholders. The biggest question now is whether or not Yahoo! can take the cash coming from the Alibaba IPO and reinvest it into sustainable cash-generating growth opportunities.

Please read the full article here:
http://www.investopedia.com/stock-analysis/071713/yahoo-still-needs-generate-better-intrinsic-value-yhoo-goog-fb-msft.aspx

FinancialEdge: Is Yahoo's Real Opportunity What You Think It Is?

Flogging the rumors of a Yahoo! (Nasdaq:YHOO) buyout is a well-rehearsed move among financial journalists, over the last year or so. Certainly this one-time internet darling still captures a lot of attention, as did the stories about Microsoft (Nasdaq:MSFT) or Alibaba possibly acquiring it. In all of the discussions of what might happen to Yahoo!, though, it seems like there is relatively little acknowledgment that the company have still have its own independent future. (For other acquisitions, see Biggest Merger and Acquisition Disasters.)

To read the full article, click the link:
http://financialedge.investopedia.com/financial-edge/1211/Is-Yahoos-Real-Opportunity-What-You-Think-It-Is.aspx#axzz1jwK2j7WH