China Sunsine Chemicals

Although the share price has risen to 26.5 cents, there still seems to be a lot reservation from the market.

Is this just another S-chip out to con investors?
Why didn't the company buy back its own shares recently, if it deems that the prospect will improve tremendously going forward?

A lot of questions still remain.

Already borrowing more to fund business expansion...will be unwise to spend in share buy back...

potatolover: I think most Chinese management don't think like us, re suggestion to buy back shares. Sunsine could be at a juncture where there is great opportunity to acquire smaller players in order to further enhance its dominance in its industry. This is the Genghis Khan conquer-and-dominate strategy.

Did some rough calculations. Taking RMB43 m as net profit in 2Q, and RMB50 m in 3Q and 4Q .... add that to RMB23 m already booked in 1Q => 7.1 sgd cents per share.

The PE would be 3.8 on current traded price of the shares (27 cents).

We can peg the fair value at 8X earnings, thus the target price would be 56.8 cents.

Given Sunsine's dominance in its industry, perhaps 10x PE would be more appropriate. Thus, the target price would be 71 cents. :woohoo:

What do you all think?

I think the Nextinsight Team has made it clear that the estimated 2Q profit of RMB 43m does not take into account of a number of factors.

I will be quite happy if 2Q profit turns out to be RMB 36m, a 75% increase year-on-year.

Sunsine's second insoluble sulphur factory and central heating company are likely to incur startup costs and require working capitals.

Sunsine is also likely to have stepped up accelerator production, which requires higher working capital.

Ipo @ 39c few years ago. Pay dividend ever year, never raise fund from shareholders....business a lot stronger than ipo ...think it is undervalued.