Dukang

if you notice, Dukang stock is good to trade in medium term. The next time, it goes below 0.4, then take position. When it raises to 0.5, sell.

Reck wrote: A good positive is that Dukang collects cash on delivery for its Dukang baijiu. It helps to explain why the cash pile in Dukang is so high. But it's hard to understand why no dividend has been paid out!

Where did u get the information that Dukang collect cash on delivery? As far as I know, the bajiu industry is experiencing over-capacity, increasing receivables and declining profits. I would be very impressed if Dukang is able to sell on cash on delivery.

Hi Azza: Dukang indeed collects cash for its delivery of Dukang baijiu (tho not the Siwu baijiu).

U can refer to:

1. www.nextinsight.biz/index.php/story-arch...-at-rmb-3104-million

See the response to the question Q: How much inventory is held by distributors?

One way we manage inventory levels is to sell only on cash terms for Dukang brand of products. As they have to pay cash upfront, distributors only place orders with us when there is genuine demand in the market.

2. research.osk188.com/attachments/83/osk-r...63851419ef161279.pdf

pg 1 of OSK report says: "Distributors pay for products upfront in cash hence receivables are low. The receivables on the balance sheet are attributed to sales of Siwu, a weaker brand."

3. research.uobkayhian.com/content_download...b1082ea49820353f14ab

UOB KH report pg 13 says: Dukang products are sold based on cash terms with payments made two weeks before actual delivery. For Siwu products, customers pay a 30% down payment and the remainder 60 days after delivery.

Cash business ? Wow!

That explains why the trade receivables as at end-June was only/merely RMB33.5 million (SGD6.4 m), down from RMB77m a year earlier.

Clearly, it's amazingly low when compared with the sales for FY13 at RMB2.4 billion.

Thanks Reck. Duakng is impressive against the industry backdrop of declining sales and increasing receivables. But having worked in China for more than 10 years, I always take any deviation from market practice with a pinch of salt.

Shareholders of Dukang may like to read the report – “Who Is Behind Purchase Of (Dukang’s) 43% Stake?” – in the link below –

sg.finance.yahoo.com/news/dukang-distill...ehind-080000217.html

The questions highlighted in the report should be of great interests to many investors.