Profit taking! Stock needs a rest at 33 maybe for a week before it can rise further. No doubt the Korea listing will catalyse the stockprice but it's all still a hope - no guarantee of performance.
What is sad is that at 18 - 20 cents, v few people had the guts to accumulate even tho the PE was only 3X. Now at 33 cents, they are wishing it would go up some more in order to make a profit.
One stock few people are looking at now is Action Asia - also PE of 3, with sterling 9 months of profit this year. Yet at 20 cents, nobody dares to accumulate....
China Gaoxian is taking a breather awaiting trading performance in KDX. While Li Heng seems to be on a selling mood, don't know why? XiRen is solid and gaining strength, more gain is expected. Overall ST Index has today reflected away from psycological level of 3,150 pts and below. Interesting counter Contel to follow, a major RTO and turnaround for the counter?
Gaoxian said in an article in BT this morning that it could price the shares in KOrea IPO at a premium to Spore price.
I can think of 2 broad scenarios:
1) Let's say they price it at 45 cents while Spore price is trading at 41 cents.
In that case, there will be a lot of accumulation of Spore shares to sell in Korea, assuming that the Korea side will hold up at 45 cents and above upon listing.
Scenario 2: If Spore price continues to go up like now, then the Korea IPO price could be at a discount. In that case, the Spore run-up would stop - it could even reverse to match the IPO price.
After listing, if the Korea price shoots up, then the Spore price will follow suit. Vice versa.
I think scenario 1 will be more likely.
Reason1, they will definitely look at the existing price at Singapore before they start they boo building.
Reason 2, looking at the companies that went TDR, most companies enjoy a robust 1st day trading will prices going up, so if the price at korea goes up,singapore will follow.
With shares fungible, the most likely scenario is that prices will trade within a very narrow gap, like the companies that dual list in hong kong. so the most important consideration will be
1) the fundemental of the company and
2) the valuation of the company.
I believe Gaoxian has both the fundemental(Good future earnings) and the valuation (Low PE compared to the peers), and most importantly, its has the winds (timing) behind it now. Its definietly one of the hot and sexy stock in the SGX now, so I feel that even there is some minor corrections, there is still good potential upside in the stock as it appeared on investors' radar.
After reading the company presentation, I understand the company better and has even more faith in the company.
Although I have already made more than 100% gain from this counter, I will still holding on to it, at least until they follow through with the KDRs plans In Jan- Feb
Who is laughing all the way to the bank now that Gaoxian is 44.5 cents and everybody's darling ? It's amazing!
just think that at 18 - 20 cents, everybody was scared of this S chip.
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