The FA of the company appear to be TOO good to make people nervous with the current share price especially it is a S-chip. When come Nov18 for the briefing could have been too late IF the Q3 is disappointing as there will be many who already knew. Also the director's 32m share could have been selling to those short seller in Apr/May and simply buy back to square the position off.
A simple question to ask yourself : If you are the director and (surely) you know the Q3 and future looks promising and bright as described by above writer would you SELL all your share at 0.138 ??? If 8cents earning is coming that will bring the cash /share surpass 25cents hence WHY unload at such a CHEAP price ????
The other issue is about the bond issue. Although it had some explain but that does not convince at all. first of all WHY need to issue such bond with such high interest cost ? Second why the deposit of the share (value at 0.138) is WAY below the bond value and with the share price crash down 50% did not see any top of the share deposit by the chairman ?
Why the bond issuer can accept such as LOW deposit value ?
greenrookie wrote: fundamental analysis does not just involved numbers purely, it is important to look at the numbers with the qualitative aspects of the company.
I shall not dwell on the red flags, much have been said about that.
Going forward, their plans are:
1) moving up the value chain, building a "luxury brand" -> number to look at, margins
2) Increase distributors -> announcements if any, as newbiestock seem to say that management will announce new distributors by this year.
3) gain a solid foothold in shanghai as a platform for other things.
Assuming you are BLIND to all red flags, you will need to decide if they can execute their plans, and their track records.
I have no future numbers, that is for investors to look at. But looking at track records, and if you see the following, you may say that company is delivering but market are FOOLS
1) 40 % margin for accessories is highly respectable, they have that for years. Shanghai business should further improve margin. If shanghai is too small and margin is diluted, they can give a segmented results to show that, it will be A-class, disclosure and you can claim they are delivering.
2) Show increase in distributors, with SIGNIFICANT increase in orderbook, since stocking up for opening required far more stock than simply repleshing orders.
You cannot take away the expansion execution in your calculation as the cost of it is too high to be ignored, they have issue bonds for it and also cancel receivables to offset renovation subsidy for brand building.
The longer they take to CONFIRM distribution and INCREASED ORDERBOOK,the clearer the path to troubles. If they show increase distributors and orderbook increase this year, then there is something going for it.
8 cents is a super steal if they delivered, get ready to have a multibaggers.
IF there is no new distributors for 2014, get ready for value trap for a long long time. And that is not the worst scernario
Cause the market price is trading around 12-14 cents that time. ye sanzhi overall still make a profit when he bought at 12 cents in 2009. if ye sanzhi really need the money to cash out, as long as gt profits, i guess it doesn't matter whether it is sold at cash/share or at NAV value.
look at Q2 2012 result -> apparel trade deposit for Q3 and Q4 are RMB 129.8 million
look at Q2 2014 result -> apparel trade deposit for Q3 and Q4 grows to RMB 155.9 million (a 20% increase from RMB129.8 mil)
from there, one can estimate the 2H revenue... the trade deposit number won't lie.
Eratat Q1 is always stronger than Q2 and the Q3 is always stronger than Q4. The combined Q3 & Q4 shld be stronger than combined Q1 and Q2.
historically, Q4 is always the strongest period for China and s-chip rally tends to start end of the year n end in early jan/feb.
i would think this is the best chance now to scoop it cheap n wait for the year end rally to come.
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