lmao000, you started this thread a year ago when the stock was 33 cents. Now, even after a sharp recovery in the last 2 months, the stock is at 18 cents. Maybe the latest half-year result can bring it up some more.
Qingmei records best ever half-year performance
ï· Revenue for the quarter rises 9.0% to RMB331.2 million
ï· This latest quarter performance lifts half-year revenue and earnings 14.5% and 16.3%
higher respectively
Any guys invested in this gem?
QINGMEI GROUP is a S-chip which has attracted the buying of an Australian fund. Qingmei is a manufacturer of high-end sports shoe soles, and is based in Jinjiang City in Fujian Province. It listed on the Singapore Exchange in March 2010 at 31 cents a share. Australian fund Hunter Hall Investment Management Limited has just emerged as a new substantial shareholder with the purchase of 9 million shares at 34.02 cents apiece on Jan 19. It now holds 40 million shares, or a 6.25% stake.[/i]
Low pe of 4.3 now at current price 0.33
Amazing financial results and share price hike by Qingmei. One of the best S-chips around. It pays unbelievable dividends and has great ROE, profit margin, free cash flow and it is still cheap
James, it's yet to be seen if Qingmei will keep up its dividend payout for the current FY.
And I don't like the smell of this announcement (today):
Mr. Su Qing Yuan ( “Mr. Su”), being the controlling shareholder, Executive Chairman and Chief Executive Officer of the Company, and High Crown Limited (“High Crown”), which is wholly-owned by Mr. Su, that they have entered into separate sale and purchase agreements (the “Sale Agreements”) with certain investors (the “Purchasers”) on 15 February 2012 (the “Disposal”), pursuant to which Mr. Su and High Crown agreed to dispose of an aggregate of 114,320,000 shares of S$0.10 each, representing approximately 16.8161% of the total issued share capital of the Company, at prices ranging from S$0.16 to S$0.17 for each share .
The Disposal was arranged by UOB Kay Hian (Hong Kong) Limited. The Purchasers are investors who are not related to the Company and its directors and/or substantial shareholders.
I really don't get this. The financial figures are so good, and the dividend yield is so high. Why is chairman Su selling if he's confident of sustaining this dividend yield?
Given his cost price, the dividend yield he must be getting on his shares should be quite incredible, even much more than the 14% that retail investors would be getting on the current price. So why would he sell? If his cost price was about 10 cents his current dividend yield would be almost 30%. Is he confident of finding a better yield anywhere else? Why would anybody in his right mind sell shares that were yielding annual cash flow returns of 30%?
Is there more to it than meets the eye?
I never like it when I see major shareholders, and this case the chairman himself, cash in post-IPO. Increasing liquidity for the stock is always given as the excuse, but that's just a euphemism to me. In the stock market, people are motivated primarily by self interests and I'm pretty sure the chairman would be buying more shares instead of cashing in if he felt that the company had good prospects and sustainable yields in the long run.
I don't like the smell of it either. 16.82% share sales is quite substantial.
Qingmei only promised to pay 30% of its nett profits as dividends for the first 2 years. Chairman Su was non-committal when he was asked at the last AGM whether Qingmei would continue paying the same rate of dividends after the second year. With the implementation of the script dividend and with Qingmei’s share price at such low level, it is rather obvious that Qingmei cannot continue to pay high dividends without rapidly diluting its EPS unless its share price is at a much higher level. Chairman Su himself would be well aware of this.
Chairman Su would still hold 50% of Qingmei’s share after his latest divestment. Qingmei is still a “cash cow” for him. My guess is that he could be saddled with personal cash flow problems following the huge business failure of his private sport shoe chain. It is certainly inconceivable for any good businessman to be divesting his shares at the rock bottom end, when the smart thing to do should be for him to accumulate more instead of divesting .. unless the company is in “bad shape” that the public is unaware of or the seller needs cash desperately. Is Qingmei in bad shape or having some sort of serious problems that other shareholders are completely unaware of? For example, accounts & reports are all fake; cash not there; factory expansion never took place; etc. Malpractices cannot be concealed indefinitely and are more likely to be exposed in an economic or business downturn.
Among all the S-chips, I still consider Qingmei as one of the best S-chips to take a calculated bet notwithstanding Chairman Su’s latest paring down of his stake. However, I would be very concerned if the Chairman’s divestment took place when the share price was at the high end (or being ramped up) or the company was not doing well or had huge borrowings or its business outlook was bleak.
Qingmei’s latest result shows that that it is still able to maintain its profitability despite a slowdown for the demand of its product. It reported a record first half EPS of 25 cts(RMB) or about 5 cts(S) – Estimated forward FY12 PE of about 2x at 20 cts. It now has a Cash & Cash Equivalents of RMB 437 million and ZERO BORROWINGS that not many S-chips can boast of; and its second expansion capacity, completed & ready to ramp up production on short notice. If a company is in trouble, it does not make sense for it to pay up all its borrowings. I see no reason to believe that Qingmei’s account is fake, or its cash pile is really not there, or its large cash dividend payments for the past 2 years were also fake.
I tend to agree with observer2. Owners sell shares for various personal reasons. He may have an urgent need for cash: eg: to buy a new house or to send his children to Harvard. Only time will tell. As pointed out, Su still has 50% of shares so there's really no need for panic. I'll continue to hold. Even if no dividends will be given out, it's eps and free cash flow are still very attractive and I believe it's share price will continue to rise above $0.20. Then things will get more interesting. Still one of the best China penny stocks in Sgx
