1. I invested HK$ 2,061,000 (S$ 349,000) in 4 China stocks that shows a big discount to the prices in Shanghai. The average discount is 60%. The price in Shanghai is 2.5X of the price in Hong Kong.
2. Based on the current prices, my investment shows a loss of $618,000 or 29% from my cost.
3. The average price earning ratio of these stocks is 8.26 times and the average dividend yield is 3.85%.
4. I am holding these stocks because I expect that they will move closer to the price in Shanghai. If the discount is reduced to 30%, the prices should move up by 75% from the current level. This will give me a 20% gain over my cost (instead of a loss of 29%).
Note - I am sharing an observation, i.e. not giving investment advise.
Tan Kin Lian