BY ALLEN T. CHENG
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Hedge fund vets: V-Nee Yeh (top) and Cheah Cheng Hye, co-founders of Value Partners (Photographs by Philipp Engelhorn) |
GOME ELECTRICAL APPLIANCES Holdings, one of China’s largest electronics retailers, has fallen a long way since its heyday in 2007, when the stock traded at about HK$20 ($2.56) per share. The company’s chairman, Huang Guangyu, was arrested in 2008 and sent to prison for stock market manipulation in 2010. Although the scandal is now safely behind Gome, the company’s stock has yet to recover, falling to HK$1.45 on April 11 of this year — its lowest level since 2009. But to value investor Cheah Cheng Hye, the retailer is starting to look interesting.
The company, which already holds a leading position in China’s first-tier cities, is expanding into other markets where demand is high...