At such low price china fibreT indeed has a high margin of safety.. But for it to become a multi bagger one has to be patient. I follow this counter for quite some time and was an ex investor. Some points for investors to take note:
1)A Hugh bulk of the cash is a result of the unutilsation of IPO proceed.
2) Earning peak at 2008, shortly after it's IPO then after it has been on a downhill.
3) when the textile sector was languishing, it was among the first few listed companies to make a loss, and when the sector turns around" the last few to have profits improve( uncompetitive)
4) next few quarters would most probably be challenging as the textile industry is hit by poor exports to European countries.
5) poor coporate governance in terms of manpower deployment, behave like a wholly family business when it is a listed entity.
Well, worth a try... If the sector rebound strongly soon and the company survives till then, u Got a gem. But the longer this economy downturn drags, the closer this company will be towards arrmagedon but burning cash. Admin, can help with paragraphing ?
With the London Olympic 2012 and EURO 2012 coming in the next few months , fabric companies should be getting more orders.
China Fibretech is already trading at such low price after its disappointing full year result for 2011 .
But its balance sheet is still very strong . Share price is undervalued .
NAV : 22.1c
Cash and bank balances increased from RMB353.0 million as at 31 December 2010 to RMB439.4 million as at 31 December 2011 due mainly to cash flow generated from operations.
I invested already. will look to buy more at 3.0-3.3 cents. what about Fujian Zhenyun? anyone interested? also got more cash per share than shareprice. very illiquid as there is only 110M shares but more tha half owned by directors.
Got sucked into this stock last week as 3.3 cts too cheap to ignore. Its cash/share is abt 20 cts LOL. Looks like investors not interested in S-Chips anymore as many have hardly moved yet.
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