07-10-2011, 11:37 AM
Cheah Cheng Hye from Value Partners had this to say, in his speech on "Value Investing in China":
Personally, I think anyone who wants to invest in China companies has to live with corruption. Things just can't move without.
Having said that, doesn't Midas ballooning receivable worry you? The IPO prospectus mentioned a usual receivable days of 2 to 3 months. As of the latest result, it is 8 months.
Cheah Wrote:It is not a level playing field. If you are a private enterprise, you don't get access to bank lending, bank loans; you don't get access to privileged locations, and you have to wait a lot longer for licenses and other things. So the playing field is very unfair if you are not a state-owned enterprise, and the way to get around that is to be corrupt.
So, there is a saying that may be less true... I'm trying to figure out what are the right words to use; I'm not good at this kind of thing... is that you have got to be friends with the government officials. But every now and then, the government officials turn against you and then they pick up your file and say you did XYZ corrupt things back in 1985. Sorry boy, you know, you're in jail. See, it's a very messy system. Yeah, a lot of heartbreaks.
Personally, I think anyone who wants to invest in China companies has to live with corruption. Things just can't move without.
Having said that, doesn't Midas ballooning receivable worry you? The IPO prospectus mentioned a usual receivable days of 2 to 3 months. As of the latest result, it is 8 months.