11 www.taipanonline.com JULY 2004 to waste because of BioShield’s great potential.        Vical has significant cash reserves (about US$94
million) that are continually increasing, aided by the
sale in March of over 3 million shares of common
stock for US$5.50 per share. After testing highs in
the US$8 range last year, VICL has fallen back
around the US$5 mark.        Insider buying has been light but steady since
last summer. Institutions are steadily increasing
their stakes, and VICL has been added to many pop-
ular funds like Merrill Lynch’s Small-Cap Value and
Evergreen’s Health Care Fund.        Don’t expect Vical to skyrocket overnight.
Another pop may occur when Bush puts his John
Hancock on BioShield, but we’re looking for longer-
term growth here. Remember, the US$5.6 billion is
to be funded over 10 years, not 10 months.
According to analyst Scott Greiper, “The govern-
ment is slow—  they’re dealing with a huge amount
of dollars and the process can go on for several
years. There’s very little visibility on who’s going to
be the ultimate winner.” But keep in mind that the bioterrorism threat is being taken so seriously that a 99-0 vote in the
Senate has directed billions of dollars to this nation-
al problem. That’s zero  opposition, folks. We should
take this as advance notice to get into affordable
players like Vical now.        Vical could become a prime takeover candidate
as trials progress and big pharmas begin to shop.
But this potential lies a ways down the line, and
Vical has already taken precautions to ensue top
value for shares if M&A talk becomes a reality.
When the time comes, share prices could be driven
up further on rumors and speculation.        And remember the clause mentioned earlier—
some of Vical’s products could be released even
without FDA approval in the case of a national
emergency.        Buy shares of Vical Incorporated (VICL:NASDAQ)
under US$7.00. This is a speculative play and could
experience periods of high volatility. Contact: Vical
Inc., 10390 Pacific Center Court, San Diego, CA
92121, tel. 858-646-1100, fax 858-646-1157, mail
aengbring@vical.com, website www.vical.com.        I’ve had several discussions with
a colleague about today’s and
tomorrow’s economic powers.
Without a doubt, the US remains the
economic powerhouse behind the
world economy. Let’s face it, if it
wasn’t for the US backing Taiwan’s
independence, Taiwan would be
under the rule of China now. China
relies on the US for many of its
exports and its most-favored-nation
status.        Today everyone is looking for the next economic
power. China is in the running and that’s why we
saw a bidding war over Chinese stocks in 2003 and
early 2004. The Chinese economy was growing at a
pace that many economists deemed unsustainable.
And that’s why we’ve now seen a pullback in
Chinese stocks in 2004.        The Chinese government has already taken steps
to slow China’s growth and prevent it from over-
heating. After extreme growth, whether it be a com-
pany or country, there are periods of slowdown
before the growth continues. Let’s recap our China plays. China Yuchai International Limited (CYD:NYSE) has been a strong player in the Taipan portfolio. We
first bought this back in December 2002, before the
Wall Street fat cats or anyone else knew about the
stock. That gave us the chance to buy it under
US$4.50 a share. We sold half our position nine
months later for a 289% gain!        Since then, CYD has traded as high as US$37.24,
but has recently pulled back. If you followed
Taipan’s 20% trailing stop rule, you could have sold
at US$29.79 for a 562% gain. But if you didn’t sell,
CYD could be a long-term winner. The company In order to devote more of our limited print space to bringing you profitable news and information, we are moving the  Taipan  classified ads to our website, www.taipanonline.com. If you are interested in advertising with us, please      email Sara Nunnally at
snunnally@agora-inc.com. Taipan'sClassifieds Next, page… The next great economic empire… Siu-Yee Ng