Sino Grandness is an associate company of Thoresen Thai Agencies, as the latter owns a strategic stake.
After the release of 3Q results of Sino Grandness, TTA revealed its take on Sino Grandness' near-term earnings outlook.
TTA:
"Sino Grandness contributed a profit of THB43.9 million to TTA, a slight reduction from the previous quarter due to increased advertising expense to expand the sales network, and as it focused more on building and increasing its own-branded product sales in domestic markets where it enjoys higher margins. Sino Grandness’ performance is expected to improve, and the company is expected to continue to make positive profit contribution to TTA in the next quarter."
It's been more than 2 months since the Thais bought shares of Sino Grandness. Why?
Possible reasons:
1) Enough liao.
2) Money no enough.
3) Insider knowledge of impending corporate action.
If it's 1 & or 2, then the share price will languish at current levels or even go below 30.
If it's 3, the share price could jump above 40 cents (1st resistance level). Only great news on convertible bonds and/or breakthrough in progress of IPO of Garden Fresh qualify.
TTA is no midget. It is a giant with more than enough money to take over the convertible bonds, let alone buying some Sino Grandness shares at depressed price.
Here is its financial position as at 30 Sep 2015:
..............................THB million....S$ million Cash............:..................7,456.............291 Short term investments.....6,502 Cash + near cash...........13,959
Short term borrowings.......4,350 Long term borrowings......10,224 Borrowings.....................14,574
Group equity...................43,041..........1,630
A mere 5% of cash, S$ 14.5m, would buy 47 m Sino shares.
TTA's net gearing is almost zero. Gross gearing is also low, at 33%.
If I remember correctly, the company is to pay out at least 10% of its earnings in dividends when it reports its FY15 full-yr results.
Annualising its 9m15 earnings one gets 61.3 rmb yuan per share = 13.6 sgd cents.
@ 10%, the dividend will be 1.36 sgd cents, or a yield of 4.1% assuming 33 cents share prx.
In SGD, the total will be $9.2 million, which Sino Grandness can afford to pay out from its cash balance of RMB320 m as at 30Sept2015.
All the hard work since end-2013 till now.... Sino Grandness looks ready to file for a listing of its Garden Fresh subsidiary. +4 cents now, to 38 cents.
Will 50 cents be reached post-CNY hols and post-EGM?
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