Qingmei

Qingmei reported recently an EPS of 43.1 cts(RMB) and declared a dividend of 12.92 cts(RMB) for FY2011. With the strengthening of RMB against the Sing$, this will now translate into EPS of around 8.5 cts(S) and a dividend of around 2.55 cts(S) using the Currency Converter of OANDA - www.oanda.com/currency/converter/ - Exchange Rate: One RMB = S$ 0.197
If the exchange rate remains at the current level, shareholders can expect the dividend yield to come to 13% (based on a share price of 19.5 cts), or an annualized yield of 13% x 4 = 52% p.a.-[For those who buy now and able to sell after xd and within 3 months, without suffering any capital loss].
 

yes, observer2, this is a most ridiculously cheap stock. to those who have not met management, can you tell us if you have any contact with them and do u think we can reliably accept their financial statements?

You are absolutely correct to say that this is a most ridiculously cheap stock, Reck.
There are actually others in the same boat. For example, Eratat is selling at PE of 2x at 14 cts; Fujian Zhenyun, a cash-rich profitable company with EPS of over 12 cts(S) every year ever since its IPO in August 2007 (at a price of 62 cts) & paying yearly dividends, is now selling at only 20 cts cum-interim dividend of 2.31 cts(RMB) – that is one-fifth of Its NAV of RMB 5.38 (S$1.05)! The accounts and cash position of these penny stocks have all been checked and verified with nothing found amiss thus far. It is no longer a case of “accounting problems or poor corporate governance with S-chips”, it is now more a case of “mindset or mental problems” with Singapore investors. When Malaysian shares were freely traded on the Singapore bourse years ago, there was a time when Malaysian plantation stocks were out-of-favour with investors with many trading at prices far below their NTAs and true worth. Many astute investors bought into them and reaped up to 10-fold returns later when the “herd” realized their value and started buying into them. Similar scenario may well occur with the S-chips.
I attended Qingmei’s AGM last year and have gone through all their quarterly results. I have no reason to doubt their financial statements. Since the Chairman has a 64% interest in Qingmei and receives around RMB 50 million a year in dividends, he can be expected to do his part to safe guard his “cash cow” especially when the share price is at such low valuation. When Qingmei’s second expansion plan is completed next year, it may well be time to get out of this stock.

perhaps QingMei shd do buyback some shares or market itself to pension funds...

Today, 1S$ =4.96 RMB, divident RMB0.1292=S$0.026, divident yield is 13.33%!!!!.
It is likely Qingmei will buyback share soon, just buy share and hold the share and waiting.

Hi Observer2,
Agree with you that if might be prudent to take some profits off the table when they complete their second instatements of expansions.
Qingmei competitors are expanding capacity too, if demand does not hold up, there might be overcapacity and cut throat competition for the sector. Also, the preferntial tax rate would end soon.
Given your strategy to double your gains or take profits at PE 10, it seems highly unlikely that qingmei can meet your targets(Even if you bought qingmei at the low of 17cents, your target of 34 cents within next year seems rather ambitious), is there any other reasons why you are bailing out so soon?
I have sold my shares but waiting to buy back my shares when company announce their AGM, so as to take advantage of the high dividends. so far price languishing below my selling price, so should be able to get it back without risking loss of entire capital if the auditing issues (Which i dun foresee but nonetheless have to guard against) crop up.