*****China Natural Gas
in Xi’an, one of China’s biggest cities. Not long after touching down, we connected
with my brother who flew in from Chengdu.
He’s been living there for over a year now.
Xi'an appears to be undergoing continuous
growth. No matter where you look, you see cranes in almost constant operation.
Old buildings are being taken down and replaced with new ones. Much of the new
construction is designed to look like the old, both inside the walled city
center and outside of "downtown" near our hotel. Even the strip malls
are built to look as though they are 1,000 years old.
View of Xi'an, China. These are "clear" skies.
The Xi’an area is best known for the
Terracotta Army which guards the tomb of the first emperor of China. These life-sized clay warriors
were buried in underground vaults over 2,000 years ago. Discovered in 1974, the
vaults are still being excavated, and the warriors reassembled. It's estimated
that there are over 8,000 hand made clay soldiers in three separate vaults.
*****Xi’an is a bustling city. Like Beijing, the weather has been warm in the
60s and cloudy most days. Both Xi’an and Beijing are located in valleys,
surrounded by hills and mountains. While the locations provided protection from
invaders centuries ago, the locations today helps contain the pollution and
contribute to smog and cloud filled skies on most days. Since our arrival,
we've seen blue sky only once. Whether this is due to pollution or weather is
hard to say.
surprising, the roads are crowded all the time (I've seen worse though, in Nairobi, Kenya). Traffic lights and signs appear
to be interpreted more as suggestions, rather than being considered law.
Despite the chaotic roads, there are few accidents. And when there is a fender
bender, the two individuals try to determine among themselves who is at fault. They bargain to come to an agreed upon
settlement, paid in cash on the spot.
China certainly appears to be developing,
but not developed. At popular tourist sites, we Westerners are outnumbered
50-to-1 by Chinese natives who are on vacation visiting the same sites. Our
guide tells us that for most of these Chinese, this is their first visit to
become increasingly popular among Chinese in the ten or twenty years as income
has risen and the middle class has grown. Certainly domestic travel can be
viewed as one measure of the local economy and for consumer sentiment. By my eyes, both appear strong.
mentioned on Monday, Xi’an is also home to one of my
favorite Chinese companies, China Natural Gas (Nasdaq:CHNG). The recent sell-off in this stock has left the trailing
P/E below 10. We picked up CHNG in my SmallCapInvestor PRO service back in
May when it was trading at just $6.14. We knew natural gas plays in China presented great opportunities,
but what really got us excited was a very brief mention that the company was
looking to move from being a bulletin board stock to the Nasdaq. Based on our
review of the company’s numbers we knew it was pretty much a sure thing and
once it moved onto a major exchange the share price would take off. And it did.
If you’ve been looking for a good entry point for China Natural Gas, the
current price around $11 is attractive. (And if you’re looking for more stocks
with potential like CHNG I invite you to check out my SmallCapInvestor PRO service.
HERE for more.)
10-29-2009 11:33 AM