kisuke: I expect Gaoxian stock to stay near the 40.5 cent level for the rest of the week. The stock is consolidating as a number of investors want to get out as they feel the stock is fairly valued or the stock upside is not going to be beyond 50 cents.
Logically, the market has no reason to push the stock up now - this is the time for consolidation and for all to 'line up at the starting line' - meaning, the stock price in Spore shld be the same as Korea fixed price at 40.5 cents.
On Tuesday, the real action starts. Let's see if the funds in Korea will pay more for Gaoxian and then the Spore market will hv to follow.
A lot of people are not considering that Gaoxian is likely to report a good set of 4Q profit . If it happens, this will be a big catalyst for the stock price in both korea and spore. According to news reports, Gaoxian's new machinery was operating in 4Q.
Great Thought.... Believe that we will see a good 4th Qtr result. One interesting thing to note is that from the table of comparison, there are also a handful of counters which are trading from 3.1 - 7x PE.
Harlequin, I think Fuxing is going at a very attractive price now....
The market price has yet to take into consideration the new acquisition which is going to add to their bottomline. Cash which has been laying in the bank with low return is going to be put to work.
Coupled with the pick up in order, the new plants are going to be profitable operationally.... also the higher margin super durable zip is going to improve their profit margin.
Gaoxian has more or less stabilised at 27-28 cents. The re-rating is likely when the results come out next week, if the results are hot.
I now think the recent selldown is becos of over-buying by retail investors who were mesmerised by the first korean dual listing and the incredibly low PE of Gaoxian at that time. It now is incredibly low at 5X for a company that makes S$80 million a year in profit.
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