Thoughts on Star Pharmarceutical Limited

josephyeo
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9 years 4 months ago - 9 years 4 months ago #21429 by josephyeo

Thoughts on Star Pharmarceutical Limited was created by josephyeo

Thoughts on Star Pharmaceutical Limited

Company was listed on the 15 Feb 2005 at 35 cts per share.
It registered losses in year 2011 n 2012 and turnaround with a small profit of S$770k in 2013. The company began to show improved profits in the next 3 quarters in year 2014, with S$1.0 mil for 1st qt, S$6.8 mil for 2nd qt and S$681k for 3rd qt. Profit for 9 months for year 2014 reached a high of S$8.6 mil.

Below are some reasons why I am interested n vested in this company:

1. turnaround company

after losses in 2011 n 2012, the company turnaround in 2013

2. improved quarterly profits for fy 2014

1st qt profits was S$1.0 mil, 2nd qt S$6.8 mil n 3rd qt S$681k. Profit for 9 mths is S$8.6 mil. This S$8.6 mil include an one off gain of S$6.1 mil from disposal of subsidiaries.

3. impressive profits at 9 mths

profits for first 9 mths of fy2014 is S$8.6 mil inclusive of a one off gain of S$6.1 mil from the disposals of subsidiaries.

4. company has no debts

5. huge cash pile

company has cash n cash equivalent of S$11.8 mil

6. low capitalisation - under valued.

company is capitalised at only S$15.2 mil based on closing
price of 6.5 cts per share on 12 dec. This is grossly under valued considering the fact that the company has a cash horde of S$11.8 mil and a 9 mths profits of S$8.6 mil.

7. small number of shares

it has a small number of shares … 234 mil shares

8. trading below nav

it's nav is 12.2 against closing price of 6.5 cts as of 12 dec '14

9 low forward p/e

forward p/e is less than 2 based on current 9 mths earning.

Above are just my thoughts on the company. There are other
good reasons why I am vested. If time permits, will share details.

Pls note .. What I expressed are just my thoughts/perceptions and they can be right/wrong. Take care n all the best!

Last edit: 9 years 4 months ago by josephyeo. Reason: correct some figures

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josephyeo
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9 years 3 months ago #21528 by josephyeo

Replied by josephyeo on topic Thoughts on Star Pharmarceutical Limited

Date of posting 6.5 cts. Today traded at a high of 9.9cts. At time of this post it is trading at 9.5 cts. A gain of 46.1 5 at 9.5 cts and 52.3 % at 9.9 cts.

Hope some of you following the post have bought into it.

All the best!

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josephyeo
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9 years 3 weeks ago - 9 years 3 weeks ago #21939 by josephyeo

Replied by josephyeo on topic Thoughts on Star Pharmarceutical Limited

Update on Star Pharmaceutical

Capitalisation S$13.8 mil

As at the date of this post the company is capitalised at S$13.8 mil based on closing price of 5.9 cts on 20 mar 2015.

Net Profit after tax S$10.6 mil (include one-off gain from disposal of subsidiaries)

Star Pharm closed the year w a net profit of S$10.6. This is almost 77% of its capitalisation. And gives the company a p/e (price earning ratio) of only 1.3 times.

Net profit after tax S$3.9 (exclude profit from gain from disposal of subsidiaries)

If we exclude the one-off gain of approximately S$6.7 from the disposal of its subsidiaries the net profit is S$3.9 which imply a p/e of 3.5 times.

Cash n cash equivalent S$12 mil

Company has a cash n cash equivalent of S$12.

No debt

Company has no debts. All debts were cleared by the end of the 3Q last financial year... 2013.

Healthy revenue and profit trend in RMB See below
period revenue profit
2013 - 1Q 20214 1851
2013 - 2Q 20453 -1211
2013 - 3Q 20502 383
2013 - 4Q 27198 2889
2014 - 1Q 22409 4603
2014 - 2Q 23437 32923
2014 - 3Q 24096 3245
2014 - 4Q 27628 9108

Healthy cash trend in RMB See below

period cash debts
2013 - 1Q 18379 20000
2013 - 2Q 14445 10000
2013 - 3Q 16386 10200
2013 - 4Q 20807
2014 - 1Q 18435
2014 - 2Q 40754
2014 - 3Q 56062
2014 - 4Q 56329

Last edit: 9 years 3 weeks ago by josephyeo. Reason: correct some figures

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josephyeo
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9 years 3 weeks ago - 9 years 3 weeks ago #21947 by josephyeo

Replied by josephyeo on topic Thoughts on Star Pharmarceutical Limited

Star Pharm in a nutshell:

Capitalisation - S$13.8 (on closing price of 5.9cts)
Profits (include one-off gain) - S$10.5 mil
Profits (exclude one-off gains) - S$3.5 mil
Cash n cash equivalents - S$11.8 mil
Company has no debts
Nta 13.8 cts
P/E - 1.3x (include profits from one-off gains)
P/E - 3.5x (exclude profits from one-off gains)
Revenue trend - positive
Profits trend - positive
Management closing comment - "The group will continue to drive revenue expansion and operational efficiency".

Note: Stock highly illiquid and wide gap between buy n sell bids. Punting in this type of stock risky.

Last edit: 9 years 3 weeks ago by josephyeo. Reason: add in a short note

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Mel
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9 years 2 weeks ago #22011 by Mel

Replied by Mel on topic Thoughts on Star Pharmarceutical Limited

everything beautiful -- except no dividend. Shocking, actually.

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josephyeo
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9 years 2 weeks ago - 9 years 2 weeks ago #22016 by josephyeo

Replied by josephyeo on topic Thoughts on Star Pharmarceutical Limited

Hi Mel,for your info, I had written to the company to consider giving some dividends. Not sure how they will respond.

Just for sharing. Most of my investment are in highly illiquid stocks. Stocks like Kian Ann, SMB, Juken and even Valuetronics were all illiquid at the point of my entry. Subsequently the market discovered that they were truly under valued stocks. Within a short period these same stocks became "hot stocks". Stocks which have good fundamentals but are neglected by the investment community are good stocks. By the time its appreciated its always too late. Patience, faith in your own research and belief are needed.

Key to Star Pharmaceutical is whether it can hold and improve on its revenue n earnings. If they can, eventually the market will come to appreciate it. Its a game of patient n faith. However if the earnings should falter then its a different story and actions need to be taken. Lets look forward to the next reporting season.

Last edit: 9 years 2 weeks ago by josephyeo. Reason: grammar

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