CIMB has a technical buy for Eratat. Expect to retest 0.145-0.15, a breakout above this will send price to 0.169-0.18
Read from many articles from the CTEI website that many consumers in China are complaining about the sky high prices of fashion clothings and accessories. Many local PRC brands are priced almost the same as reputable overseas brand. A check with colleagues from CHINA told me that prices are indeed high and they actually find shopping in Singapore to be a more pleasurable experince (due to lower prices)!!
Well, at least Eratat will not be undercutted by other brands in pricing, but the flipside of the coin seems to be there are too many companies trying to move up the value chain by just repackaging their products to look more westernised and giving their brand an ENglish name, sound very much like an wolf in sheep clothings. Eratat seems to be seriously and cautiously trying to move up the value chain but improving not just their products but also services, but might not have any first mover advantage.
That their suppliers command a prenium might not be such an bad idea after all, at least it means those suppliers have better quality control such that customers are returning. I read from another article that many smaller manufacturers in DOngguan has problems getting orders and are in danger of closing down.
The order book for the spring/ summer series will tell us a lot about how Eratat is coping in this highly competitive environment. It has been almost 6 weeks since the last trade fair. The announcement should come anytime soon, and if the order book can grow further, it should be the catalyst to move price higher and coincide with the technicial analysis
All it needs is show us a good Q3 result, with a good book order for next year and a good positive cashflow, and it shld be able to fly high again to at least 18 cents. HUAT.
Basing on 1H2011 results plus the Rmb550 million orders to be delivered in 2H2011, the EPS this yr is expected to be 8 cts. Beats me why the share price closed at 12.7 cts ? Is there another SGX counter trading at a lower PE?
Eratat needs some boutique funds to 'play' the stock. Or some big boys to play the stock. Move it up fast and let others chase it and get excited about it. Otherwise, left to individual retail investors, it's difficult to run. Just a bunch of believers and value investors, who pray the day will come when the stock gets a decent valuation --- like 25 cents.
joes, i am sure bb will come, so long as eratat keeps delivering the results. 25 cents is still cheap, at around 3x PE. Shld trade at least 35-40 cents at 5x PE. greenrockie, can u share with us the link of the CIMB report that u mention? tks.
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