Lunar Monthly Update
Investors are pulling money out of China. The Wall Street Journal recently reported that China’s banks were net sellers of renminbi in July. Asset prices are declining in line with these outflows. The Shanghai Composite Index is down 17% compared with a year ago. Housing prices have fallen – anywhere from 8% in wealthier cities […]
Lunar Monthly Update
This month, we address the issue of transparency in general, and additionally why we believe operational involvement provides us an edge both in managing our portfolio and understanding the Chinese economic environment. The latest Chinese CPI, PPM and growth numbers have indicated a general slowdown in activity. Doubts about the credibility of economic information, and […]
Market Update – The Hidden Affluence of Chinese Households
This month we examine an important question in understanding the power of the Chinese consumer. Is the level of consumption higher than government data suggest, and are China’s rich being captured by official statistics? A recent China Daily editorial called on the Chinese government to enact measures to ease personal tax burdens, break up monopolies […]
The Tribe of Empty Wallets at Month’s End
There’s a unique scene that plays out almost every afternoon at the Canadian – US border crossing near Vancouver. If you drive by the US side at around 4pm, there’s a good chance you’ll spot tour buses, with rows of expensive-looking clothing neatly arranged up on the ground. Behind these Burberry, Hugo Boss, and Brooks […]
Lunar Capital revives King of Walnuts
Shanghai-based private equity fund Lunar Capital Management has acquired a majority stake in Sichuan Zhiqiang Group, the once-prominent walnut producer that later emerged from bankruptcy. Lunar Capital paid US$50 million, including the buyout fee and capital injection, and the firm will be renamed Sichuan Zhiqiang Food. Derek Sulger, a partner at Lunar Capital, said it […]
Lunar Capital gets 60% stake in Chinese beverage brand
By Alvina Yuen Lunar Capital Management has acquired a majority interest in Sichuan Zhiqiang Group, an integrated food manufacturer located in western China, in a deal worth up to $50 million. Through the purchase of a 60% stake in the 15-year-old Sichuan-based beverage brand, Lunar Capital has formed a new Chinese-foreign joint venture corporation to […]
Lunar Monthly Update
The past few years have forced policy makers in North America and Europe to re-examine the role of governments in guiding and promoting economic development. China’s relative success over this period has led some to speculate that the “China Model”– a strong central state driving economic development sans democratic discourse (or bickering) – might work […]
China’s Bloated Stomach
This month we would like comment briefly on the troubles facing China’s food and beverage sector and its related industries. From its well-known scandals of melamine in milk (2008), gutter oil in restaurants (2009), and clenbuterol in pork (2011), to its bizarre incidents of hair-made soysauce (2004), paraffin-coated rice (2006) and glue-injected shrimp (2012), the […]
Lunar Capital partners Pinco Pallino to expand in Asia
By IPA staff Lunar Capital will partner Pinco Pallino S.p.A. to develop the luxury children’s wear brand, I Pinco Pallino, in China and East Asia. The partnership will involve establishing a joint venture in seven key East Asian countries. Lunar Capital will take a majority stake in the joint venture through an affiliate, and will […]
Lunar Monthly Update
Below are a few observations on the current economic and investment climate in China. Historically, investors have been rewarded by deploying capital in Chinese equities on the cusp of a transition from tight to loose monetary policy. We believe investors willing to withstand short-term risk will be rewarded. By any measure, public equity valuations appear […]
