Just do a share buyback and all the shareholders will be happy.
If u trace back to 2010, the dividend was RMB 0.0466 lol as opposed to the upcoming RMB 0.025.
at 14.9-15c, share price is too cheap to do any placement, should the company needs cash for expansion. If u recall, the placement done at 2011 was around 20 c. And at the peak, Eratat went to as high as 26 c. The fundamental still remain unchanged as earnings are consistent, except now have higher cash.
By taking advantage of the low interest rates now, i hope they will utilise part of their funds from the bond issue to do some sharebuyback and keep some for expansion.
1) The PE is 7.3X while Eratat is 2X.
The valuation of Eratat is clearly too cheap. Will consider loading up on the shares on Monday.
2) The dividend yield of Evergreen is 7.3% while Eratat's is 3.4%.
The way to interpret the 2 points above is: Evergreen pays a lot more in dividends!
Put another way, if Eratat were to be re-rated to 7X PE, the dividend yield would be minimal, kacang puteh!
Eratat should take note that this is a key reason the stock is trading at 15 cents instead of 30 cents. By failing to provide a higher dividend return, the stock is getting punished to some extent.
I checked another peer, China Lilang. This one is a Big Fish, earnings about S$159 million. PE is the same as Evergreen at 7.1X. The dividend yield is also about the same at 6.8%.
China Lilang is an attractive stock among the 3 menswear play on China market for its decent yield. However, Eratat Lifestyle, constrained by its working capital needs, could offer higher capital gain because its PE has a higher chance of re-rating from just 2X.