UBS reports: After 10 weeks of rally, China spot steel price rolled over in Nov as expected. We expect spot prices to fall until spring.


2013 likely to be another one of those years

We expect China spot prices to recover in early spring but peak again in 2Q13 as supply response and
weak sentiment outweigh better demand from investment and liquidity. We believe it difficult for regional mills to meaningfully raise prices as 79%
global utilization rate in 2013E is not enough to support steel market. Still, we expect 2013E margin to improve modestly YoY given low base and
falling cost.

Number of China companies listed on SGX falls to 146
By Linette Lim | Posted: 06 November 2012 2234 hrs

 SINGAPORE : The number of China companies currently listed in Singapore has dwindled to 146 as of October this year from almost 160 two years ago.

Over the same period, the market capitalisation of primary-listed China companies on the mainboard of the Singapore Exchange (SGX) fell by a third to just over S$35 billion.

Analysts say this is a sign of how the once-popular S-chips asset class has fallen out of favour. 

Terence Wong, Executive Director, DMG & Partners Research, said: "There is a fall in the number of S-chips being covered. Definitely if you were to compare against the heady days in 2006, 2007, where every research house would have a very good coverage, it's very different today. Many houses do not have a specific analyst to look at the S-chip sector."

Frozen food maker Synear Food is the latest S-chip preparing to exit the SGX. 

The former market favourite is proposing to delist the stock at a third of its IPO price of 54 cents in 2006.

The stock hit a high of S$2.48 in 2007, but plunged 80 percent after net profit fell by more than half in the following year.

Terence Wong, Executive Director, DMG & Partners Research, said: "Many of these investors were really excited about the growth prospects of these small Chinese companies - many of them are seen to be able to grow in excess of 20 to 30 percent per annum. But once there was a break to that growth, or once they realise that there was really no growth, that really took the wind out of many of these investors."

Although Synear's exit price is 18.6 cents, which is its highest trading price in over a year, a recent report by independent research house NRA Capital puts the stock's fair value at 37 cents per share.

Channel NewsAsia understands that the company's minority investors, which include some hedge funds, are trying to accumulate a 10 percent stake to vote against the delisting. 

David Gerald, President & CEO, SIAS, said: "Singapore is the only country that has got this exit offer requirement in the listing rules. No other jurisdiction has this. In Singapore there is no legal recourse if you're not happy, you can't challenge the decision of the board on the exit offer. But if minority shareholders get together, they can put some pressure on the board, discuss with the company on the reasonableness and fairness of the offer, they can make some progress."

S-chips were virtually non-existent about a decade ago.

After a meteoric rise between 2005 and 2007, S-chips crashed in the couple of years that followed, undone by a number of accounting fraud cases.

Mr Gerald said this does not mean all S-chips are bad, adding that out of all the listed S-chips, only 13 have had problems.

But confidence in S-chips never quite recovered, perhaps a point underscored by the fact that investors did not even bat an eyelid when Synear announced its intention to delist last month. <contradicting the previous highlighted para >

Synear's board has appointed Ernst & Young Corporate Finance as its independent financial advisor to give its opinion on the exit offer, and shareholders will be asked to vote on the delisting in due time.

- CNA/ch

Friends, I have stepped into SINO GRANDNESS. wish me luck that this stock is 'clean' in which case its solid profit growth in the past 2 years maks it an irresistibly attractive sexy cheap stock. As more outlets & supermarkets distribute their beverages, the company is on the way to become the Coca Cola of China. 47.5 cents vested. 

Looks like Sinopipe is going to be ok. The CEO has stepped down and is replaed by Dr Pu Weidong, who used to be CFO of Sinomem Tech. The important thing is Dr Pu is also a subst. shareholder of Sinopipe.  Now, when will it resume trading?

Synear Food is up for privatisation at just 18.6 cents -- which is v cheap compared to its NAV of 46+ cents. Looks like S-chips are tired of Singapore investors not valuing them higher. It's the reason why I am looking for gems. Whether they get privatised or not eventually is beyond anyone to be sure of. Just Buy & Keep cos they are cheap and good! 

joy-this 4 s-chip r eg-from dif sectors n dif value .sino-making money n on hope of g-fresh listing.sunsine 2nd big chemical-co behind germany-co.sapphire small but intr-value ab 30 cts.   p-food loaded with cash-true or not i also do not know-i can;t check the acc but it;s named co with armour'.hope u like my postings ....

Isn't it better to buy these stocks now as they are cheap and below IPO price. Need to selectively pick and need good goverance too. Or do you want the price to run up before you invest? That's the difference betw value investor and follower, and esp so if Joy can hold long term. Good luck.   

Yes ..same everywhere .. every country have good stock and bad.. Pick the better ones and you will be rewarded when China recovers .. the recovery is long overdue and thus most S-chip are at super low valuation .

Yes there are risk ..since they are negected .. well higher risk higher return! your choice Joy .

The reason why most (not all) s-chips are trading below their IPO prices is because the Shanghai Composite and Chinese stocks all around the world are now trading at a 3.5 year low - at comparable levels to end 2008-early 2009. 

Few Chinese stocks will want to IPO at these kind of prices which is why no s-chips have listed in Singapore since end 2010 (Yamada Green) - it's just like how few to zero Singapore companies would want to IPO in Singapore if the STI was at 1500. You wouldn't get good value for money selling shares to the public when sentiment is so bad. Did any companies IPO in Singapore between December 2008 and March 2009? 

Chinese stocks are undergoing a deep bear market. Few stocks list when valuations are at basement levels - it makes little sense to. This is why it is not statistically surprising that during a deep bear market, many stocks are trading below their IPO valuations, because the majority of stocks list during a bull market. 

One s-chip that has gone up significantly since IPO however is Sino Grandness. Sino Grandness listed in November 2009 at 29 cents - it is now more than 50% higher at 46.5 cents. The fact that in November 2009 the Shanghai Composite was about 60% higher (>3300) than it is now makes this even more commendable. Sino Grandness raised $16.9 million in their IPO - in the last quarter alone they made close to that amount - in just a single quarter. Make of it what you will. 

Well, these were good advices and serves the purpose of this blog. Better than asking one not to ask questions. Think Joy and some of us would have learnt something here. It all depends on one's risk level, which is proportional to the return it gets. For S-chips, always look for good governance, eg.GIC is a major shareholder in CMZ and its oversight in corporate governance. Midas is run by reputable Singaporean executives, though the business is in China. I do believe in the China story. Your choice.

Only BBs and handfull of professionals/seasoned players consistently make money in S-Chips. Almost all retail investors have lost money or sitting on huge paper loss. I dare say almost all S-Chips are now trading at below their IPO prices, and the total paper loss is staggerrig. Yes you can make money here, but you can't just be a follower.

There are about 150 S-Chips, why only pick these 4 ? If you can't analyse and pick your own counters, you are not ready to play this sector. Stick to blue chips.

"Don't ask your barber if you need a haircut" W Buffett

Joy, you should add ChinaMinzhong n Midas into your portfolio. Something cooking in CMZ this week, its share went up nearly 10%, it's making $ throughout and high TP. Midas, you shld know it will not go out of business. If you're long, this is a "must-have" stock into China's transport system, just look at japan, uk and europe in their past developments in their transport needs - important infrastructure and big movers!. I'm vested. Good luck. 

Thank you Benson! I see you listed: sino grandness, sapphire, china sunsine, people food.

I am somewhat familiar with the business, and I will rank them as follows in my order of luv:

1. Sino Grandness. 

2. China Sunsine.

3. Sapphire.

4. People's Food.

What do you think?

joy-u may check-up this s-chip n see which is more u comfortable--sino grandness sapphire 

china sunsine people food n.....s chip r quite high risks-take care ....

Many s-chips have touched lowest points in 52-week range? Can anyone recommend good ones to pick up? I can hold long long, so long as there is fantastic intrinsic value in them.