ZIWO

Phillips Securities is so conservative, pegging its target price at just 5X for a stock that it is expecting net profit growth of 20% this year.


++++ We are still optimistic in the growth of the company, as we feel that the positioning of the
company’s products as import substitution products will stand it in good stead to compete
against its competitors. Like we said, raw material cost increases may eat into profit margin,
however the counter argument is that it affects all industry players. The company may even be
able to benefit from this as its products are generally cheaper than its overseas competitors and
also, it being one of the larger producers in China has an efficiency edge over the smaller
producers. We have adjusted our FY2011E earnings estimates. We raised our revenue forecast
by 3.7%, however we have lowered our net profit forecast by 1.3% as we assume higher raw
material cost. We are also lowering our valuation peg to 5x earnings to better reflect the change
in current market sentiment. Our target price remains at $0.47 and we maintain our buy
recommendation.

Long time Ziwo has shown no action - just trading hentak kaki.

Analysts went up a few days ago, with UOB KH issuing report after that and a buy call.
Still hentak kaki at 33 cents.

Market sentiment was good yesterday cos signals of strength from US market. Now, take profit?

Dont forget  tomorrow Friday is a public holiday. 

Ziwo is a pretty good business but it has its challenges , especially in the short term as 1Q is seasonally a slow period due to CNY.

This time Ziwo also has to deal with high raw material costs of rubber & PET chips.

Phillip Securities yesterday maintained buy with target price of $0.45

Ziwo looks clean!
The board of directors of the Company (the “Board”) would like to announce that our internal auditor, BDO Consultants Pte Ltd (“BDO”), had completed their scheduled audit and an internal audit report has been issued on 24 May 2011 (the “Report”). This is the third year that the Company had engaged BDO to perform this internal control audit.
The Report contained findings and recommendations in the areas of interested persons transactions, inventory management and costing, payroll management, capital expenditure on plant, machinery and equipments, follow up of previous audit issues and cash and bank balances validation. None of these findings constitute material, price sensitive internal
controls weaknesses.

 
The Report was reviewed and discussed by our Audit Committee with BDO and the Audit Committee has obtained confirmation from management of their agreement to take appropriate action to address the recommendations by BDO.
By Order of the Board
Ting Chun Yuen
Executive Chairman and Chief Executive Officer
13 June 2011

High volume this morning. Why?
Now 22.5 cents, still a long way from target price.

Ziwo is 24 cents now on 8.7 m shares. Bounced off 52-week low of 21 cents.