China Gaoxian has received approval for listing!!!
Dont be surprised if the stock flies above 30 cents tomorrow. (last closing price was 28 cts)
Mr. Moon Sung Hyung, the Managing Director of IPO Division of Daewoo Securities Corp,
being underwriter to the Company, said “As a leading producer of
differentiated polyester yarn and fabrics used for a wide range of, amongst others,
sports and casual clothing, interior furnishing, and automotive decoration in the PRC,
China Gaoxian provides an attractive investment opportunity and avenue for Korean
investors keen to leverage on the strong PRC domestic demand and economic growth.
We expect China Gaoxian to be an especially interesting IPO play, being the largest
Chemical Fibre & Textile Company listed on the KRX in terms of revenue and
profitability, with a compelling sell story and an impressive track record.”
Mr. Cao Xiangbin, the Executive Chairman and CEO of the Company, said “We
are targeting to complete our KRX dual listing in early 2011, and are confident that it
will provide a different perspective to our valuation and benefit our Singapore
investors.
With With more than 20 peers listed there, Korean investors know our industry and
business well. Our interactions to-date with Korean investors, authorities and
professionals have also been very positive, and have made us even more convinced
that we have made the right choice in choosing to list our KDRs on the KRX."
The Company's peers on the KRX are currently traded at average P/E valuation of
approximately 16 times.1 Upon the successful listing of KDRs on the KRX, shareholders will
be able to switch from trading on the SGX to KRX through a conversion process which may
take up to three business days and vice versa. Shareholders will therefore be able to
mutually access SGX and KRX.
Li Heng should learn a few lessons from Big Brother China Gaoxian.
Li Heng is down 4 cents since the start of 2010 from 27 cent sto 23 cents.
What a fish!
Gaoxian going KDR is the catalyst for its stock price - and last night it announced 0.5 cent dividend for shareholders of its Singapore-listed shares. Very clever! and thank you!
It also benefits the chairman (major shareholder) of course!
a) The valuation of Gaoxian is still dirt-cheap, and it should fairly be valued about 60+ cents.
b) My working: Gaoxian’s EPS for 9 months is 21.22 cts(RMB) or 4.2 cts(S).
Using UOB KH's forecast full year EPS of 6 cts(S), the EPS would be adjusted down to 4.2 cts on dilution of earnings following the dual listing.
c) Gaoxian said that its peers average in Korea is 16X PE.
Gaoxian should trade up to at least 16X PE after a while in Korea. Then its share price would be about 67 cents.
d) In an optimistic scenario, Gaoxian trades up higher as it would be the biggest textile player in Korea. Price 80 cents?????
