China Gaoxian and DMX

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13 years 9 months ago #4953 by Dongdaemun
Replied by Dongdaemun on topic Re:China Gaoxian and DMX
Mr. Kim Hyeon Young, the Managing Director of the Capital Market Division of Daewoo
Securities Corp, being the underwriter of China Gaoxian’s KDRs listing, said

“We believe there is strong potential for price appreciation in China Gaoxian's equity post-KDR issuance. China Gaoxian’s KDRs will be issued at 9 times PE ratio, whereas the
average PE valuation of its more than 20 Korean listed peers in 2010 is 18.5 times.
Investors will come to recognize China Gaoxian's value as they become more familiar
with the Group and its stable financial results as well as proxy position to China’s
strong domestic consumption and the growth of its domestic economy.”

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13 years 9 months ago #4954 by greenrookie
Well, the price of 40.5 cents is a disappointment. Although the plus point is that the company managed to attract several prominent institutional investor. Before 25 Jan , there should be some short term selling, I expect the price to hover around 39 cents in the near term. Let's hope the koreAn investors chase the price up and push Gaoxian to greater heights

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13 years 9 months ago #4955 by pine
Replied by pine on topic Re:China Gaoxian and DMX
In any big share placement, the buyers will buy at a discount to the market price. The pricing for Korea listing is no surprise at all as it is at a discount (about 8%) to the Spore price before trading was halted.


The discount is a given - dont know why people seem surprised.

The upside is there  beyond 50 cents cos PE valuation is still too cheap for this market leader which made S$80 million in the past 4 quarters .....

Just wait for good contribution from the expanded production capacity and for growth this year.

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13 years 9 months ago - 13 years 9 months ago #4956 by erelation
Interesting to note that the listing price of $0.405 per share is already at a PE of 9x where average industry peers are trading at 18x.
While Gaoxian is a good company and still trading at a reasonable price, I will prefer to allocate large fund to China Taisan based on valuation basis. While Taisan is smaller in price as compare to Gaoxian, its 9 month Net Profit is a cool 170mil RMB which is roughly $33.4 mil SGD. Annualized it will give us a good $44 million annual profit.
Note the following information in the 3qtr result.
1) 9mth EPS is 3.51 cents (SGD) Annualized to 4.68 cents with a forward PE of 4.16x FY2010 (19.5cents). This is half as compare to the current valuation of Gaoxian at more than PE 9x (40.5 cents)
2) The Group has launched two new products, namely thermal microfiber performance fabric and cotton-feel nylon spandex, towards the end of 3Q2010. These two new products, which are the latest contribution from the Group’s collaboration with Wuhan Textile University, took up 5% of the sales revenue in 3Q2010 and commanded gross margins above 30%. Higher Margin product and high utilisation is expected to give us a good 4th Qtr result which is expected to be announced end Feb 2011.
3) Pick up in Sales Volume have FORCED the management to immediately announce capital expenditure of over 200mil RMB to bring in much needed capacity instead of waiting for the approval land right use for new plant.
 
Simple calculation, for Taisan to trade at Gaoxian PE will means a share price of close to 40 cents. CIMB target price of 35 cents look good. Brought more in the market today and holding till release of 4th Qtr result.... .
Last edit: 13 years 9 months ago by erelation.

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13 years 9 months ago #4957 by zzang8488
Replied by zzang8488 on topic Timewatch
Watch out  for the this stock movement next week,chart look bullish.

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13 years 9 months ago - 13 years 9 months ago #4960 by Kisuke
Replied by Kisuke on topic Re:Timewatch
China Gaoxian was pushed above 40.5cents to 42.5cents and closed at 42cents despite the korea shares to be valued at 40.5cents ipo.
I have an inkling that the prominent subscribers behind the korea shares do not want gaoxian to fall below 40.5 cents because they are vested at that level. It is akin to a call warrant that has been exercised at 40.5 cents.
Disclosure: I am vested at 44cents. It closed 42cents.
Last edit: 13 years 9 months ago by Kisuke.

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