DMG issued a non-rated note after a recent plant visit and stock price has reacted positively today a quite glance at the short note says that sino grandness is trading around 3x PE with projected dividend yield of 5%, may be one of the cheapest F&B stock around will keep track on sino grandness and see how they perform when they release 1H10 earnings
since my first post on 15june, sino grandness has been rising steadily from 21c to 31.5c today on the back of buy calls from DMG and Phillip securities (i suppose if it is cheap enough, sooner or later someone will take notice) based on chart, near term resistance is at 32c which is why i think it failed to move higher for the time being despite phillip buy call report company will presenting at the following brokers\' offices between 12-22july: AmFraser Securities Pte. Ltd. CIMB Securities (Singapore) Pte. Ltd. DMG & Partners Securities Pte. Ltd. Lim & Tan Securities Pte. Ltd. Phillip Securities Pte. Ltd. UOB Kay Hian Private Limited let\'s see if the 32c resistance can be taken out by then cheers streamyx88
Hi Harlequin Just to share my thoughts with you : Although some investors have stopped looking at s-chips since the blew ups of some china companies, I believe not all of them are bad and if you do proper homework, the potential reward is still quite good. Here are my selection criteria for s-chips :
1. I prefer to look for recently listed company since new company is less prone to run into problems within 12 to 24 months of listing, sino grand was listed in nov 2009 so that is good for me
2. profit base not too big : I prefer company whereby profit base not too big so they can deliver more sustainable growth for 1 to 2 years at least. Sino grand profit was RMB66m in FY09. If we add back ipo expenses of 16m, that will be about RMB82m. I think that is a nice base to growth at least 20% per year for next 2 years.
3. PE low . market forecast (DMG and Phillip) sino grand profit for 2010 is about RMB90m so the eps is about 7.5c sing. When it was 20c, the PE is only 2.67 times! To me that is like investing in pre-ipo deal where pe is usually less between 2to3x, definitely cheap enough for me.
4. earnings growth potential : sino grand new beverage business only started in 2H2009. So when they report 1H2010 results in august, we should expect pretty good performance because 1H2009 has no beverage business so the base is lower.
5. Investor friendly management : I also prefer company that is more open or willing to communicate with investors regularly. As I shared with you that sino grand has an internal investor relations officer plus they have been actively meeting investors to profile the company, that is also a plus point. In fact the recent roadshow is one of the most active roadshows that I have seen for a company, presenting to 6-7 brokers all within 8 days shows that the company is generating good interests.
6. sector : I personally like F&B sector, especially the potential of china market. Sino grand only recently started to launch in-house brands of canned food and drinks for the china market. Since the base is low for this new business, it means upside potential should be quite good.
7. chart : this is the last and most important point for me. When I highlighted the stock, the short term signal started turning up and the mid term indicators also turned bullish for me when it closed above 24c, so Mr Chart also agrees it is attractive then of course investing comes with risks but if we are prepared to take some risks (always remember to set cut loss point) and do some homework, there are still some good picks out there once in awhile that's all I have to say, hope you enjoy reading my 2c comments happy trading
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Thank you streamyx88 for your most enlightening post. I agree with your investing approach .... that\'s how we can unearth bargains which can turn into multi-baggers. Now that Sino Grand has run up more than 50%, isnt it time for it to consolidate and correct? As such, I will prepare to buy in if it falls . by the way there are good stocks at valuation of 3 or 4X too, such as China Eratat and Sinotel. (Not so sure about Sinotel as its growth prospects seem to hv weakened as a result of an increase in tax and a change in the equipment procurement system in China.) Good luck...
sino grandness has been rising more than 20 days and i last commented that there was some resistance around 32c when it broke through momentarily past few day, there is potential for it to go higher technically speaking but once it close back below 32c, it means the technical breakout has failed, as such near term correction is expected i expect trading interests to pick up again when we move closer to the reporting season where most small caps tend to release results during first or second week of august cheers