Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Biggest Inflation Threat in 40 Years Looms over Markets - 13th Apr 21
How to Get Rich with the Pareto Distribution - Tesco Example - 13th Apr 21
Litecoin and Bitcoin-Which Is Better? - 13th Apr 21
The Major Advantages Of Getting Your PhD Online - 12th Apr 21
Covid-19 Pandemic Current State for UK, US, Europe, Brazil Vaccinations vs Lockdown's Third Wave - 12th Apr 21
Why These Stock Market Indicators Should Grab Your Full Attention - 12th Apr 21
Rising Debt Means a Weaker US Dollar - 12th Apr 21
Another Gold Stocks Upleg - 12th Apr 21
AMD The ZEN Tech Stock - 12th Apr 21
Overclockers UK Build Quality - Why Glue Fan to CPU Heat sink Instead of Using Supplied Clips? - 12th Apr 21 -
What are the Key Capabilities You Should Look for in Fleet Management Software? - 12th Apr 21
What Is Bitcoin Gold? - 12th Apr 21
UK Covd-19 FREE Lateral Flow Self Testing Kits How Use for the First Time at Home - 10th Apr 21
NVIDIA Stock ARMED and Dangeorus! - 10th Apr 21
The History of Bitcoin Hard Forks - 10th Apr 21
Gold Mining Stocks: A House Built on Shaky Ground - 9th Apr 21
Stock Market On the Verge of a Pullback - 9th Apr 21
What Is Bitcoin Unlimited? - 9th Apr 21
Most Money Managers Gamble With Your Money - 9th Apr 21
Top 5 Evolving Trends For Mobile Casinos - 9th Apr 21
Top 5 AI Tech Stocks Investing 2021 Analysis - 8th Apr 21
Dow Stock Market Trend Forecast 2021 - Crash or Continuing Bull Run? - 8th Apr 21
Don’t Be Fooled by the Stock Market Rally - 8th Apr 21
Gold and Latin: Twin Pillars of Western Rejuvenation - 8th Apr 21
Stronger US Dollar Reacts To Global Market Concerns – Which ETFs Will Benefit? Part II - 8th Apr 21
You're invited: Spot the Next BIG Move in Oil, Gas, Energy ETFs - 8th Apr 21
Ladies and Gentlemen, Mr US Dollar is Back - 8th Apr 21
Stock Market New S&P 500 Highs or Metals Rising? - 8th Apr 21
Microsoft AI Azure Cloud Computing Driving Tech Giant Profits - 7th Apr 21
Amazon Tech Stock PRIMEDAY SALE- 7th Apr 21
The US has Metals Problem - Lithium, Graphite, Copper, Nickel Supplies - 7th Apr 21
Yes, the Fed Will Cover Biden’s $4 Trillion Deficit - 7th Apr 21
S&P 500 Fireworks and Gold Going Stronger - 7th Apr 21
Stock Market Perceived Vs. Actual Risks: The Key To Success - 7th Apr 21
Investing in Google Deep Mind AI 2021 (Alphabet) - 6th Apr 21
Which ETFs Will Benefit As A Stronger US Dollar Reacts To Global Market Concerns - 6th Apr 21
Staying Out of the Red: Financial Tips for Kent Homeowners - 6th Apr 21
Stock Market Pushing Higher - 6th Apr 21
Inflation Fears Rise on Biden’s $3.9 TRILLION in Deficit Spending - 6th Apr 21
Editing and Rendering Videos Whilst Background Crypto Mining Bitcoins with NiceHash, Davinci Resolve - 5th Apr 21
Why the Financial Gurus Are WRONG About Gold - 5th Apr 21
Will Biden’s Infrastructure Plan Rebuild Gold? - 5th Apr 21
Stocks All Time Highs and Gold Double Bottom - 5th Apr 21
All Tech Stocks Revolve Around This Disruptor - 5th Apr 21
Silver $100 Price Ahead - 4th Apr 21
Is Astra Zeneca Vaccine Safe? Risk of Blood Clots and What Side Effects During 8 Days After Jab - 4th Apr 21
Are Premium Bonds A Good Investment in 2021 vs Savings, AI Stocks and Housing Alternatives - 4th Apr 21
Penny Stocks Hit $2 Trillion - The Real Story Behind This "Road to Riches" Scheme - 4th Apr 21
Should Stock Markets Fear Inflation or Deflation? - 4th Apr 21
Dow Stock Market Trend Forecast 2021 - 3rd Apr 21
Gold Price Just Can’t Seem to Breakout - 3rd Apr 21
Stocks, Gold and the Troubling Yields - 3rd Apr 21
What can you buy with cryptocurrencies?- 3rd Apr 21
What a Long and Not so Strange Trip it’s Been for the Gold Mining Stocks - 2nd Apr 21
WD My Book DUO 28tb Unboxing - What Drives Inside the Enclosure, Reds or Blues Review - 2nd Apr 21
Markets, Mayhem and Elliott Waves - 2nd Apr 21
Gold And US Dollar Hegemony - 2nd Apr 21
What Biden’s Big Infrastructure Push Means for Silver Price - 2nd Apr 21
Stock Market Support Near $14,358 On Transportation Index Suggests Rally Will Continue - 2nd Apr 21
Crypto Mine Bitcoin With Your Gaming PC - How Much Profit after 3 Weeks with NiceHash, RTX 3080 GPU - 2nd Apr 21
UK Lockdowns Ending As Europe Continues to Die, Sweet Child O' Mine 2021 Post Pandemic Hope - 2nd Apr 21
A Climbing USDX Means Gold Investors Should Care - 1st Apr 21
How To Spot Market Boom and Bust Cycles - 1st Apr 21
What Could Slay the Stock & Gold Bulls - 1st Apr 21
Precious Metals Mining Stocks Setting Up For A Breakout Rally – Wait For Confirmation - 1st Apr 21
Fed: “We’re Not Going to Take This Punchbowl Away” - 1st Apr 21
Mining Bitcoin On My Desktop PC For 3 Weeks - How Much Crypto Profit Using RTX 3080 on NiceHash - 31st Mar 21
INFLATION - Wage Slaves vs Gold Owners - 31st Mar 21
Why It‘s Reasonable to Be Bullish Stocks and Gold - 31st Mar 21
How To Be Eligible For An E-Transfer Payday Loan? - 31st Mar 21
eXcentral Review – Trade CFDs with a Customer-Centric Broker - 31st Mar 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

A Hidden Asian Investment Gem

Companies / Investing Sep 11, 2007 - 10:44 AM GMT

By: Money_and_Markets


Tony Sagami writes: I run at a pretty fast pace when I'm in Asia. Every day is packed with factory tours … meeting with company executives … pestering government and university leaders for their local knowledge.

I hit the streets to see things with my own eyes because that's the only way I can know if the zealous investor relations departments are feeding me overly optimistic projections. I'm also willing to shift my entire focus when something really makes my eyeballs pop out.

Case in point: During my last trip, I completely turned my schedule upside down after visiting one really exciting company. Today, I want to tell you about it …

How a One-Hour Meeting Turned into a Full Two Days of Tire Kicking and Fact Checking

I rescheduled my entire South China itinerary because of what should have been a brief meeting. I was so blown away by what I heard that I put everything else on hold just to dig deeper into one single company.

I'm talking about Man Sang Holdings, the largest wholesale supplier of pearls in the world. The company primarily sells to jewelry manufacturers, wholesale distributors, and mass jewelry merchandisers in the U.S., Europe, and Asia. For example, QVC — the TV shopping channel — is a customer.

All told, Man Sang accounts for half of the world's freshwater pearl sales each year! 

This isn't a fly-by-night business. The company has been operating for decades … and it's been extremely profitable over the years!

After just a short time listening to my host at Man Sang, Sonny Hung, I knew that I had either found one of the cheapest, most undervalued stocks of my career or one of the best liars I've ever met.

My host at Man Sang, Sonny Hung, gave me a lot of valuable insight into the company.

I just had to figure out which it was. Fortunately, the answer was the former …

Five Reasons Why This Is One of the Biggest Bargains I've Ever Seen!

Look, I've been doing this for 23 years, so I know a good bargain when I see one. And I think Man Sang Holdings (AMEX: MHJ) is an easy double from its current price.

And best of all, I don't think you'll have to wait more than 18 to 24 months to see it happen. Here's why:

Reason #1: Zhuji is the center of the pearl universe.

Most of the world's jewelry is actually made in China, but that's especially true for pearls. China produces more than 95% of the world's freshwater pearls.

The city of Zhuji alone produces over 70% of China's freshwater pearls … and it is China's largest base for cultivating, processing and grading them.

Here's the really important part: The city is the home of a monster real estate development project that is going to turn Man Sang into one of the most powerful (and profitable) jewelry companies in the world.

Zhuji is the pearl capital of the world!

Reason #2: A king's ransom in real estate riches.

Man Sang is sitting on two juicy pieces of real estate that are worth much more than the market realizes.

The first is Man Sang Industrial City , a 26-block industrial facility. It's got about 550,000 square feet of commercial property in the Gong Ming Zhen district of Shenzhen. It occupies roughly 20% and leases out the rest for a nice steady piece of income.

And get this — Shenzhen has grown so rapidly that this property is now smack dab in the middle of the growth path. The local government wants to acquire it so badly that it is offering to swap it for several pieces of super-prime property in other parts of the city!

The second is China Pearl and Jewelry City , which is the ambitious real estate development project I mentioned a moment ago.

Called "Pearl City" for short, this is Man Sang's massive international pearl and jewelry marketplace. It will accommodate more than 2,000 pearl wholesalers, manufacturers, and retailers, along with exhibit halls, hotels, offices, stores, and even residential apartments.

Man Sang recently purchased an additional 6% of Pearl City from one of its partners, bringing its ownership stake to 55%. Man Sang didn't buy this additional stake because the project is going poorly … sales are happening faster and at higher prices than initially projected.

I couldn't pry any hard numbers from Man Sang, but Mr. Hung told me everything I needed to know when he told me, "The profit from Pearl City will be significant. VERY, VERY significant!"

Pearl City won't open for business until the middle of 2008, but once investors see how successful the project is, the stock should rocket higher.

These real estate assets are a real sleeper! See, Man Sang carries the properties at their original cost basis and doesn't include the huge appreciation. Chinese real estate has skyrocketed in recent years so this vast value doesn't show up on Man Sang's financial statements.

It's hard to gauge the value with any certainty, but some sources say the real estate will ultimately be worth $80 million, and perhaps as much as $160 million, when Pearl City is completed. That works out to somewhere between $12 and $24 a share in value.

Reason #3: Man Sang is sitting on a mountain of cash.

The company has $40.7 million in cash. That may not sound like much money at first … but it works out to a staggering $6.37 per share! So you're getting $12 to $24 of hidden real estate and a very profitable jewelry business for a couple bucks a share. Talk about a steal!

Not only is Man Sang sitting on piles of pearls, it's also got valuable real estate, and plenty of cash on its books.

The rest of the balance sheet is just as pretty, by the way. Man Sang has absolutely ZERO debt so it is prepared to ride out any short-term storm. The company even paid out a per-share cash dividend of $0.25 on August 8.

Reason #4: Small float + strong hands = big leverage.

Roughly 55% of the "float" — the public shares that are regularly traded — is owned by three large U.S. institutional investors. That leaves only 2.9 million shares left. In other words, Man Sang is just one large investor away from skyrocketing in value.

And don't worry — I don't think those other three institutional investors are going to sell anytime soon. They see the same tremendous value that I do. In fact, I know from personal conversations that they are very, very long-term investors.

How's this for a cherry on top? There isn't one stinking analyst that follows Man Sang Holding. That's right … not one!

Maybe it's too small for them to care about, or maybe they just don't know about the hidden real estate assets buried in the books. Heck, I bet very few of the suits on Wall Street could even point out Shenzhen on a map, let alone have actually visited it.

Reason #5: Don't forget about the pearl business.

It is pretty easy to get caught up in the Zhuji real estate treasure and the $6.37 per share of cash. But never forget that Man Sang also has a well-established and profitable pearl business.

Year Sales Net Income
Source: Morningstar

At current prices, Man Sang's stock is trading for just 15 times trailing earnings. Even if you exclude the other items, that's a reasonable valuation just for the pearl business.

There Are Plenty of Undiscovered Investment Gems Waiting to Shine

I hope you can now see why I dropped everything and concentrated on Man Sang once I scratched the surface of this undiscovered gem. And you can also see why I quickly recommended it to my Asia Stock Alert subscribers.

Am I guilty of "talking up my own book" by telling you about this stock today? I suppose so.

But let me be clear … I'm not suggesting that you just rush out and buy Man Sang immediately. With an average daily volume of just 36,000 shares, you have to carefully pick your entry point. And as always, you need to do your own homework before you invest.

Still, I think this company is a great example of the kind of bargains you can find in Asia. And when you find them, it pays to drop whatever else you're doing to investigate. After all, great deals don't wait around and they don't last forever!

Best wishes,

by Tony Sagami

P.S. If you're interested in learning about more of my favorite hidden Asian gems, I urge you to read this special report .

This investment news is brought to you by Money and Markets . Money and Markets is a free daily investment newsletter from Martin D. Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Dr. Weiss is a leader in the fields of investing, interest rates, financial safety and economic forecasting. To view archives or subscribe, visit .

Money and Markets Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules