Sunac Investment Calculated Risk, Not Gamble

What many people don't understand about investment is that investment is not a game of till death do us apart. Take Sunac (1918) as an example, there is no denying that Sun Hongbin is a gambler. That he was sentenced to jail once and went broke another time offer ample evidence of that. Still, that shouldn't deter one from investing in and prospering with Sunac.

The perception that Sunac is risky, due to its high leverage, conveniently overlooks its very strong property sales and undemanding valuation. July is likely the first time Sunac will sell CNY30 billion property in a single month. Damn that's a lot of money.

I am in on Sunac but that doesn't mean I will stick with the company no matter what. Sun's super aggressive approach my backfire some day, so the important thing is to have an exit mechanism. The company is actually very transparent as it releases monthly property sales.

Sunac shares have tripled from its low in 2016 yet its market cap is merely HK$60 billion. I am pretty confident it will become one of mainland's four largest property developer in a few years time. Sun Hong Kai properties, mostly just operate in one city - Hong Kong, has a market cap of more than HK$300 billion. The math part is easy,  the hard part is to embrace and manage risks.