China Animal

After 2 weeks of consolidation (and a bad market), China Animal has firmed up. I think it has a chance to rise to 30 cents again. Worth re-reading DBS Vickers' report:
[url=http://www.nextinsight.net
/story-archive-mainmenu-60/912-2011/4520-china-animal-delisting-offer-to-be-attractive-]CAH delisting offer to be 'attractive'[/url]

Friday's price action looked like a fake breakout / bbs rolling to me. pump up the price, attract momentum traders and unload to them for a profit.  the buying Q disappeared once they finished selling or traders stopped bidding up the stock.  Support around 25c.

When it's quiet, it's spooky quiet! Like a ghost town

Avg PE for s-chip is 8 and many are even below 4. CAH's PE is 17 and isn't overpriced at this moment. Risk is high if delisting does not go thru...

gangho: u r using last year's EPS, so u get 17X PE. The current year -- in first 9 months the EPS already was 10.8 rmb cents. Annualised, the EPS becomes 14.4 rmb cents, which is about 9X PE if you buy the stock today at 25 cents.

Kim Eng has worked it out, u can see their PE is 7.6 assuming you buy shares at 22.5 cents.
[url=http://www.nextinsight.net
/story-archive-mainmenu-60/912-2011/4405-kim-engs-privatisation-list-why-flee-from-china-minzhong-]Kim Eng's privatisation list [/url]

Apart from being a quality business, China Animal is a buy if you are pretty sure that it would be delisted via an offer price that is much higher than current 25 cents. Under widespread market speculation, the management has openly said it would like to delist. The caveat is, there is no guarantee. I think that 's good enough reason for me to buy some shares ...... spare money .... and even if the delist doesnt happen, CAH is a quality biz, as I have said, with top notch investors. So I am going for the ride. If you missed what management said in announcement to SGX, here it is:
“By way of clarification, the Company wishes to inform shareholders that, as part of its constant evaluation of corporate options which may be beneficial to the Company, the Company is currently contemplating and assessing a potential delisting from the SGX-ST whilst continuing to maintain its primary listing on the SEHK.
The Company would emphasize that:
(a) this announcement is made to clarify speculation which the Company considers could otherwise undesirably affect the orderly trading of the Company's shares to the detriment of its shareholders. The  Company would, given a choice, have preferred to make this announcement only after the Company had  considered and assessed all relevant factors (including consultations with all relevant governmental authorities and regulations) and determined to proceed with a definitive proposal (which it currently has not)."