The PE current year will be v low at around 2, based on current know info & normalized expectations. Cheap PE is not enough. What will it's AR situation be? And its cash flow? The upcoming quarterly result will recalibrate investors' valuation of this stock. Amazingly, for a S chip which is micro cap, and which is in a very competitive industry, this stock has a wide following among retail investors
Hope I am wrong, but I'd guess that the sales for rest of year will be lower than last year as they did not bother to announce their orders for April 2012 autumn/winter trade fair. Their sales are no longer visible as before.
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[Eratat 29-09-2012]:
The up coming quarter result should be a very solid one unless eratat gives another rude surprise!
Their orderbook is made up of apparel and shoes, so you should not just look at 1 number for the orderbook. I believe the apparel is going up while shoes are going down. Now, apparel is high margin but not shoes. In that case, the gross profit will still look good and even grow. The gross margin will also grow in such a scenario.
A: You can take last year's figure as a guide, it's pretty close at RMB490 million for Eratat products. Same distributors and same number of shops. The product mix will be more of apparel and less of footwear.
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