People say it is a good business, but why the substantial shareholder, CMIA, is selling down?
From LIM & TAN note to clients:
CMIA continued to reduce their stake in China Minzhong with the latest sale reducing their stake
from 10.78% to 9.96% at $1.39 each. Between 9 Nov ’10 till 26 Nov ’10 they sold 25,398,357 shares
from low of $1.14 to high of $1.32, with an average price of $1.20. During the IPO in Apr ’10, they
sold 13,748,000 shares at $1.20 each. While continued share sales by CMIA may likely dampen the
short term share price performance, we note that during the month of Nov ’10 when CMIA was
actively selling shares, China Minzhong’s share price had actually strengthened from $1.23 to $1.40.
Good entry point at 99.5 cents now? GIC has a 17% stake in China Minzhong and one of its guys on the board of directors.
JP Morgan last week had reduced Price Target to only S$1.10 (target forward P/E of 3.5x), which looks excessively unfair. I read that Chaoda scandal has caused China agri sector to be re-rated. Investors have fear of accounting problems again. Sigh.
I don’t know about you guys, but it is rather strange to me that a major company like China Minzhong doesn’t have a Big 4 auditing firm audit its books. Minzhong’s auditor is Crowe Horwath First Trust.
I mean, how much more does it cost to get a Big Four auditor? Compare the cost with the investor confidence that is generated!
This is a time when the stupid Chinese agri companies like Chaoda have raised concerns over corporate governance. How to expect Minzhong price to rally strongly ?
Minzhong has added another 5 cents today. Very solid performance . thinking of taking profit but the stock is still so cheap in valuation. U know what level it was at previously? FRom Jan to May 2011, it was around S$1.50. Now at $1.09 doesn't look so expensive. It has been a victim of eurozone rubbish and the Chaoda rubbish.
Macquarie has a 12-month price target of S$2.35 in this report[url=http://www.nextinsight.net
/story-archive-mainmenu-60/912-2011/4405-kim-engs-privatisation-list-why-flee-from-china-minzhong-] CHINA MINZHONG is deep value [/url]
