Oh, Anhui Conch Cement (600585.SH). We’ve come a long way together. It’s been a long road down from the lofty heights of June, when the SCI was at 3,436.398. That was back when just one of your shares cost RMB55.97. Do you remember that? Do you? We understand if you’ve chosen to forget, seeing as you’re currently trading at RMB28.79 a share. That’s a 48.56% drop, Anhui Conch. Don’t worry, we won’t hold it against you.
But you know just as well as we do that fixed-asset investment is going to be weak this year, and that the government’s stimulus program is only going to make up a small fraction of the spending that you need to continue to see strong profits. We’ve gone over all that before. We now know that full-year GDP growth was at a seven-year low, not to mention that people are already cutting their growth forecasts for 2009.
Really, it’s not you, it’s us. You’re still a major cement producer, and China’s need for cement is not going to go away. We have every confidence that you’re going to pull out of this OK in the end.
We just need a bit of time, Anhui Conch. We’re going to take the Spring Festival holiday next week to think about our relationship – really think about it. We’re going to keep all our options open. We just hope you understand that this is something we need to do. It’s only fair to you that we can tell you where we really stand. Either way, we’ll find a way to get through this.
And don’t worry about that hussy Industrial and Commercial Bank of China (ICBC, 601398.SH). It never meant anything to us at all. Even American Express is rumored to want to sell its stake.
The Capitalist Roader Fund is down 37.4% since June 3; the SCI is down 42%.
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