Want Want vs Coca Cola

Want Want’s PE is 32 vs Coca Cola 20.

Want Want LT Growth Rate (%) forcast is between 26%-32.81% / annum. Operating Margin is 18.94.

Coca Cola LT Growth Rate (%) forcast is 8%-12% / annum. Operating Margin is 25.

Want Want has higher PE because of its higher earning growth forcast, because it is in China. However its long earning history record is not readily available. Therefore forcast is not reliable. Coca Cola’s growth rate of 8-12% is moderate but is based on many years of past record and is very reliable.

When I was in China during the Beijing Olympic torch relay I notice Coca Cola has a huge advertising compagne for the Olympic. In fact it is the leading advertiser during the torch relay. Want Want does not have such advertisement compagne. In a Chinese supermarket, Coca Cola are staked up occupying a lot of space and sales. Want Want’s shelf space is very small.

Coca Cola is huge in China and will do much better than Want Want. I am not sure Want Want deserve the high PE. Having said that China is only one of many countries Coca Cola operates in.

Warren Buffet owns much of Coca Cola, Kraft, Johnson & Johnson and Wrigley. I can’t help to notice that all these companies are huge and leaders in China in their respective products.