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Americans make big money off China

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US_flag April 7, 2010 (Chinavestor) We all know headlines that American companies have been shipping millions of jobs overseas, notably to China and India, but it is less known that China is becoming a profit center for a large number of Fortune 500 companies. General Electric (NYSE:GE) derives most of its revenues from overseas with an increasingly significant portion coming from China but it was a shocking revelation to many, including myself, that General Motors has been selling more cars in China than at home!

 

According to the latest statistics, General Motors sold 230,048 vehicles in China in March 2010. GM has a 34 percent stake in SAIC-GM-Wuling and a 50 percent stake in Shanghai-General Motors. Saic Motor (SHA:600104) is the largest Chinese auto maker, a company that reported a ten fold increase in net profit from last year. But as the following chart suggests, impressive results are partially due to a record low base in 2008... Just for the record: SAIC Motor (SHA:600104) reported 2009 FY revenues of RMB139.6 billion ($20.432 billion) and net profits or RMB6.591 billion ($965 million).

 

SAIC_2009Q4_revearnings

Another example of making money in China is Warren Buffet. The American billionaire held a 10% stake in Petrochina Co. Ltd. (HKG:0857) (NYSE:PTR), the largest Chinese oil producer, up until October 2007 when he dumped it all. Talking about knowing when to quit. The stock has never been that high ever since. And if you missed it: Petrochina (NYSE:PTR) made history in November 2007 after her maiden IPO in Shanghai: market capitalization of the company surpassed $1 trillion, the first and only company ever to do that, following the IPO. It's everybody's guess how much Warren Buffet made on Petrochina...

PTR_2000-2010

Another smart move by Omaha's best known man was investing in BYD Co. (HKG:1211), an electric car maker. MidAmerican Energy Holdings, a Buffet controlled entity, bought a 10% stake of the company on September 27, 2008 and the stock price has risen over eight fold!!!



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