sino grandness - undervalued stock

SWN
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10 years 4 months ago #18488 by SWN

Replied by SWN on topic sino grandness - undervalued stock

Did you take into account of the share split of 2 for 1 in Sep 2013? Those who bought at 72 cents per share in May 2013 have now got 2 shares in hand.

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BNN
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10 years 4 months ago #18492 by BNN

Replied by BNN on topic sino grandness - undervalued stock

SWN, the absolute stock price in May 2013 was around $1.45.
Due to the stock split in Sept 2013, the charts (Bloomberg, Yahoo) have since displayed the post-split prices. That is, in May 2013, the stock price is now shown on the charts as 72 cents. Today, the stock price closed at 72 cents -- all the past 7 months of holding the stock made no difference!

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Diversity
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10 years 4 months ago - 10 years 4 months ago #18493 by Diversity

Replied by Diversity on topic sino grandness - undervalued stock

BNN
The market may have under-estimated the performance of Garden Fresh in 2013.
As a listed entity, Garden Fresh will garner a better valuation than the privately-held canned product business segment. Therefore a unit of profit from Garden Fresh has a greater impact on the intrinsic value of Sino Grandness.
Sino Grandness discloses the profits of its two business segments in its annual report only. In 2012, net margin of Garden Fresh was 19.1%, two percentage points higher than canned product segment.
Quarterly results do not have profit breakdown. Sino only says that Garden Fresh is more lucrative, with a net profit margin between 18% and 20%.
The market has adopted 18% as the net margin of Garden Fresh. It has overlooked the group's 3Q net margin of 22.5% as well as 9-month net margin of 20%.
As Garden Fresh is more lucrative, its 3Q net margin ought to be higher than the group margin of 22.5%. If it were 23%, Garden Fresh would have earned RMB100m in 3Q. Similarly, the profit of Garden Fresh would have been RMB214m in the first 9 months if its net margin were 21% (as against the group margin of 20%).
Unless Garden Fresh suffered major reversals in 4Q, it would have easily earned RMB300m in 2013.
Brokerages are still holding on to their target prices of around $1. They may prefer sticking to their original 2013 profit forecast of RMB250m for Garden Fresh, and wait a while to see whether the strong 3Q performance can be sustained.
If Hong Kong investors value Garden Fresh at 15 times 2013 profit of RMB300m, Sino’s residual 75.3% stake in Garden Fresh will be worth RMB3,389m, or $1.19 per Sino share. The intrinsic value of Sino Grandness share is $1.43 after adding the value of the canned product segment (24c per Sino share).

Last edit: 10 years 4 months ago by Diversity. Reason: typo error

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pine
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10 years 3 months ago #18952 by pine

Replied by pine on topic sino grandness - undervalued stock

Sino Grandness is really cheap at 67 cents which is back to the Oct 2013 level when Fidelity became a substantial shareholder. www.nextinsight.net/index.php/component/...-on-garden-fresh-ipo

It's already Feb, and I guess the IPO process for Garden Fresh has gone some way. The time is coming when the company will go all out to woo investors in HK (mainly). Will the stock price turn magic?

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Masterinvestor
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10 years 3 months ago #18954 by Masterinvestor

Replied by Masterinvestor on topic sino grandness - undervalued stock

Another S-chip just defaulted on its bonds - Eratat.
The very same Eratat that has been named one of the most transparent Chinese company on SGX haha.

What makes everyone so certain that Sino will honour its obligations when they are due... just imagine if IPO will not go ahead, or it will get valuation of only 8 to 10 times forward earnings. Then remember China Minzhong back in August 2013. Lot of unknown variables, bad S-chip sentiment, etc. - price may well drop further.

Even if there is absolutely no fraud, Garden Fresh is a very young brand that requires a lot of investment. Competition will also emerge at some stage. The company has been investing from borrowed funds not own (it even does not have the capability of paying dividend) - too much depends on the IPO route and its pricing to keep the company going.

For me, the price 67 is about fair now, or even bit too expensive.

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pine
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10 years 3 months ago #18961 by pine

Replied by pine on topic sino grandness - undervalued stock

masterinvestor, it all depends on your risk appetite and the due diligence you have done. This stock could well be a big % gainer in the next 6 months. Doesn't have to be a big % in one's portfolio unless one is very sure. Just a little % to add spice to the overall portfolio return. Asdew is in, Fidelity is in, Goldman Sachs is in. There's company.

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