Qingmei

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12 years 7 months ago #6972 by ethan999
Replied by ethan999 on topic Re:Qingmei
Qingmei's performance today and the fact that it has fallen relatively less compared to many other s-chips in August illustrates to me the importance of dividend yield to share prices of current s-chips. A dividend yield of 10%-12% depending on what price you bought it is very handsome indeed.
Qingmei pays 30% of net profits as dividends. Logically speaking an investor shouldn't really consider this very good because 30% is quite huge and you would hope that the company wants to retain more cash to expand further and grow shareholders' equity even more, particularly for relatively small-cap companies like Qingmei which are still in the growth phase with lots of room to expand and become a big player. I'm not saying that Qingmei shouldn't pay dividends, but you would hope they want to retain a bit more profits for growth. 
Yet this is viewed as very positive in current market conditions because high dividends guarantees investors' cash flows in an uncertain volatile market plus because there is so much distrust of s-chips, the ability to pay high dividends proves the authenticity of their balance sheets, an effective but arguably expensive way to hold up the share price. That this is an effective way to keep the share price strong shows how 'short-termist' many shareholders are, valuing immediate returns over long term growth. 
It looks like the increased capacity has worked mainly to counter decreasing average selling prices which suggests that the market is getting ever more competitive, while in 1-2 years time their tax breaks from the government will expire. The company has good cashflow and there is a lot of cash available for growth but will the management give a clearer picture of how this growth will be achieved in a very competitive market?
Regardless, there's no way a company producing such healthy profits and riding on the back of the very promising PRC consumption growth story deserves such a low valuation, as is the case with Sino Grandness and Eratat.
 
 
 
 
 

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12 years 7 months ago #6978 by greenrookie
Replied by greenrookie on topic Re:Qingmei
Dear Forummers,
Thank you for your invaluable insights.
PengHOck, I am kinda of spooked by your comments, since the price run up so quickly, I decide to contra to take profits off the table. I am still holding half of it for long term gains.
I feel that QIngmei low bottomline is not actually that weak. First, I feel that 50% utlisation of capacity that is just recently brought online is actually very strong demand. The earnings is kinda of "diluted" by the 3 quarters of constrained capacity. Hence there is no way QIngmei can report an earning like sino grandness even if they hit 100% capacity in this quarter. Howver, going forward, the results will have more room for pleasant surprises (I hoped)
The cost of sales is rather stable from previous quarters, meaning that wages and raw materials didn't really impact the bottom line that much,
The research expense is the large item, which i think might not be recurring at such high levels every quarters. Its the "other expenses" that is eating away the margins for net profits besides the falling ASP.
Observer2, just curious, how did you know about BuzhiBA? where did you get those "insider" news??
 

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12 years 7 months ago #6982 by observer2
Replied by observer2 on topic Re:Qingmei
Hi, Greenrookie,
In response to your query regarding Buzhiba, I have to say that I was rather troubled when someone told me about a news report in China that Qingmei could have been involved in a failed business venture involving Buzhiba. As this was a rather serious matter, I decided to do some investigation. Fortunately, these news reports were also available over the Internet and they were not what I feared most – another S-chip scandal!

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12 years 7 months ago #6994 by penghock
Replied by penghock on topic Re:Qingmei
hi greenrookie et al,
For Buzhiba news, you can do a baidu (Chinese version of Google) and can see alot of news and comments.
I think many people inc distributors, suppliers and etc mistaken Qingmei and Buzhiba as same company.
Initially there is news that Qingmei is going to "buy" Buzhiba last years, but denied by both Buzhiba and Qingmei bosses.
However, in early this year, Su setup another company called XiboDeng to buy over Buzhiba business as well as the debts.
Su had different ideas such as setting his own branch retails shops instead of franchise to third party. The problem comes when Su executed this ideas, where many franchise not happy with this arrangement, and some heard Su is clearing the stock in factory at cheap price. Thus many franchise are not happy and also started to sell at huge discount. I think many franchise owners probably still owe Buzhiba some $$. By closing down, I am not sure if Buzhiba can recover those receivable.
There are some panics, when raw material suppliers of Buzhiba cannot get back their money and started to ask for $$, some even go to Qingmei and ask for $$, but was rejected by officers there.
However a news broke out, and clarify that Qingmei and Buzhiba are 2 different entities. Su is helping ex-Buzhiba boss's Tan but instead get into this mess. (Buzhiba boss (Chen) helped Su secure some loan before. I think I read it in Qingmei Annual Report. So I think Chen and Su are good friend.)
I think the Buzhiba business is mediated by local Govt office trying to solve the problem for all parties. It will not be easy. Thus we didn't see any business from Buzhiba (my guess) but most importantly we got all $$ back from Buzhiba. (heheee..)

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12 years 7 months ago #7042 by greenrookie
Replied by greenrookie on topic Re:Qingmei
Some interesting findings to share. Penghock, regarding your post on the highly negative report by an fund, I have researched and find that it's imply that qingmei is cooking it's books due to headcount should be totally baseless. First of all, if u look at output per worker per hour, it's a low 42 soles per hour based on 9 hrs week and 5.5 work days. However, qingmei derive it's max capacity by 23 hrs day and 29 day a month operating. Then per hour output should be lower than 20. More importantly, I found that Tai Ya shoes, which is listed in CHnet Shenzhen exchange also produce EVA soles, and best of all, in it's prospectus, they have figure of number of workers producing EVA shoes. After tabulating that with the final packing and assembly process, they have about 880 workers producing 18 million soles annually. They are even more super workers than qingmei. Qingmei only produce EVA shoes, and they have 3000 producing 44 million. U do your own Maths. I also look at the per output per hour of the mould Injecting machine by surfing the net, these machines are capable of producing hundreds of soles in 1 hour. So, unless both companies are cooking their books, the headcount should not be an issue. I however was shocked to find out that tai ya has many overlapping substantial customers with qingmei. While qingmei has no customers contribute more than 10% to revenue, the overlapped customers like Xtep, kangta, 361 and hong xin contribute more than 50% to taiya revenue in 2010. I think qingmei share from these renowned brands are smaller than I thought. However, in taiya prospectus, qingmei was ranked second after tai ya in terms of sales in 2009. Anyway, to play safe, I have sold off all my holdings, I will buy them back when their books can audited and cleared, if the price cheong during this period. Then too bad. Wish the rest of forummers all the best in qingmei

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12 years 7 months ago #7045 by gangho
Replied by gangho on topic Re:Re:Qingmei
Is rumour a good tactic to press a price down? have been observing that there cd be accumulation since it annouced the result.

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